What Happens to Your Brand After a Merger?

“We have a mission statement posted in the lobby, but who knows what our vision is now.”

Shaking Hands with Text "Now What?"Ernest Auerbach knows his way around the corporate world, including the carnage that often follows after a merger. As a corporate general manager with a global portfolio of senior positions from Xerox and CIGNA to New York Life and AIG, he has seen the ugly when “mergers trumpeted as made in heaven end up in hell.”

He warns that mergers sometimes fail because the hard work isn’t done after the announcement confetti is swept up and everyone files back to their office (or collects their severance check).

“Some mergers work well, but it takes good strategic work at the front end and excellent post-merger work afterwards,” Auerbach recently wrote in Texas Enterprise.

Let me add two cents from the brand corner of the room.

I’ve made good money off of troubled mergers, aiding worried executive teams trying to figure out how to wrangle their company culture and their external brand in the weeks and months after a merger. You only have to think about the nature of a good brand to understand why.

Consider five simple points about what a brand position should be:

  • Based on the truth; consistent with your strategy and organizational realities
  • Something of value to your customers
  • Something your staff and stakeholders can believe in and support
  • A profitable market position you can own
  • A single idea (not a laundry list of attributes)

Can you think of anything about a merger that will mess with the karma of this simple list? Yeah, just about everything. Strategy, customers, company culture, market position…it’s all up for grabs, and the politically charged air that fills the corridors after a merger makes it very difficult for executives and staff to talk calmly, honestly and without fear about these critical issues.

I’ve seen post-merger employees so traumatized and confused by what has happened that they don’t know what they are supposed to believe, or who they are supposed to be. During a brand audit in Houston I asked one corporate HR director about their company vision, and she replied glumly, “We have a mission statement posted in the lobby, but who knows what our vision is now.”

It isn’t laziness or poor management that leads to much of this stress. Post-merger executive teams are flying full speed ahead, with a good deal of flex in their moment-to-moment priorities, demands and understanding of what is required to keep the new company from rolling off the end of the table after a merger.

A simple exercise to gain agreement on brand.

In this environment, a clear-headed and objective brand discussion can often serve as a catharsis. The process of getting everyone’s brand thinking in alignment forces a newly merged executive team to come to terms with issues that have been simmering just below the surface. A technique as simple as a Forced Relationship Brainstorm can get the ball rolling, gently forcing the team to recognize and openly discuss unaddressed disagreements about customer segments, product strategies, pricing, etc. Is our company a Ferrari or a Chevy Impala?

Frankly, these discussions can be painful, but then again a slow rot causing limbs to fall off isn’t much fun either, and that’s what often results from ignoring fundamental questions of post merger brand coherence.

Gaining clarity early after a merger is bound to pay dividends for the new organization, and may salvage a few careers in the process. I’ll never forget the newly minted company president in Houston who called me into his office to relate how instrumental our branding process had been, then saying, “Because of it, I’ve decided to resign. I’m not the right person to lead us where we need to go.”

That’s a true story.

Follow Ernest Auerbach and other professionals and researchers who are contributing business insights and opinions to Texas Enterprise, Big Ideas in Business from The University of Texas at Austin

Mergers Trumpeted as “Made in Heaven” Often End Up in Hell

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One thought on “What Happens to Your Brand After a Merger?”

  1. Mergers and acquisitions always take two companies and merge them into one. In a directly merging, the companies are often identical in dimension and durability, while products usually include bigger companies buying small ones. However the partnership is made, the simple truth continues to be that two brands must learn to stay as one. This often needs re-branding after mergers and products, and it’s a great way to recognize your new company and display customers that you are dedicated to the new products and services that you will provide.

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