Maintaining a Strong Brand Through M&A: Part II

In Part I of this series, we explored how important it is to manage your brand as you go through a merger or acquisition. We shared how getting your brand strategy right as you go through M&A pays outsized dividends:

• This McKinsey study shows that companies that get this right can achieve up to 60% higher revenue than those that do not;

• Managing employee engagement will significantly reduce attrition and will engage partners and stakeholders to ensure everyone is focused on the newly formed company’s success; 

• Aligning brand and culture ensure faster integration, maintains focus, and ensures customer experiences are not negatively impacted

In Part II, we dive into the important role communication plays in your M&A brand strategy.

Intentional Communication

There’s a common saying that you have to deliver a piece of information seven times before an audience can truly absorb it. As much as we’d like to believe that our audience will fully comprehend our message the first time we share it, this is not the case. Numerous behavioral biases (such as confirmation bias) are at play and will distort the intended message. This, added to the general noise of the day, means we are fighting a myriad of distractions and distortions to get through to our audience. 

It’s essential that during a merger we do not assume any level of comprehension or shared knowledge. Reiterate and define clearly the plans for the new entity, the evolution of the brand, and the implications for the future. 

Communication should occur across a variety of modalities: emails, webinars, online chat forums, and in-person discussion groups. This ensures that each person is met where they best consume information and provides them with opportunities to ask questions. 

Intentionally establishing two-way communication channels is essential and will create a strong sense of psychological safety across the organization. However, ensuring those channels don’t remain silent is key. Employees need to feel free to ask any question, free of judgement or repercussion. 

Internal Communication – Retain & Excite Employees

A merger is always a time of uncertainty. Team members that you would think fully understand the value of their contribution and their security in the company can become distracted, nervous, and unfocused.  

Organizations that manage this well often take Maslow’s hierarchy of needs into consideration. Your stakeholders are likely to immediately focus on their basic needs and fears:  

• Will they keep their job? 

• Will their pay and benefits change?  

• Will their team or leadership change? 

By addressing these fears early and clearly, you give employees the mental energy required to hear the bigger messages, such as those related to the acquisition itself and what it means for the business. Failure to address their immediate concerns may mean they will turn a deaf ear to you and your efforts will be wasted. 

There are three primary elements to your communication plan that can be used to ease the concerns and create excitement about the future: 

The Why – explicit communications that explain the rationale for the deal are critical. Don’t create the space for assumptions and rumors to fill. Your stakeholders need to know why this transaction is being executed. Is it the coming together of similar businesses to expand your customer footprint? Or the coming together of complimentary offerings to deepen existing customer relationships? Or is it a completely new business line creating diversification? Or any one of the other myriad reasons for an acquisition or merger.  

Explaining the reason why helps your stakeholders understand, buy-in and therefore support the coming together. 

The employee value proposition – Explain to you your employees what this means for them. Does it open up new opportunities for leadership, for travel, for skills expansion, or otherwise. Why should they be excited about the change. 

The journey ahead – Articulate a clear vision for the future as NewCo. Illuminate the path that will be traveled to unlock the value of the merger. Give your teams the visibility into the journey they are on, make sure they know the challenges ahead. If they can anticipate them and know they are transitory, a necessary evil to get to the other side, then they are far more bearable.  

A shared understanding of the journey and the envisioned destination gives a team the resilience and excitement to attack the obstacles and drive towards the vision. 

This is a time for elevated communication. It may feel excessive or redundant at times, but repetition and consistency will pay dividends: increased retention of key team members, elevated engagement, and increased productivity as evidenced by this McKinsey report. 

External Communication

Internal communications are just one aspect. As soon as we start to consider our wider stakeholder community we realize the breadth and complexity of the communication needs. Among these stakeholders are customers, suppliers, distributers, investors, analysts, and the press to name just a few. 

Communication with all stakeholders is critical at this time. Intentionality and clarity need to be carried through to this audience. As we mentioned above for employees, we can expect other stakeholders to operate from their own perspective founded on a needs model similar to Maslow’s hierarchy. They will be similarly focused on their fears and concerns before anything else: loss of support, changing agreements, increased prices, etc. 

Investors will want to understand the rationale for the acquisition. They will need to be assured that the risks are understood, mitigated and outweighed by the benefits of this action. Ensuring the understand the potential upside and that their personal risk has been minimized is key to gaining their support and advocacy. 

Suppliers and Distributors will immediately be concerned about losing business, “does this merger create duplication and redundancy in your supplier or distributor network?” What assurances can you provide, or if adjustments are needed, what is your plan to communicate the changes quickly and clearly so that transitions can be managed smoothly. 

Analysts and the press will be watching and assessing. Is this merger a positive move? They will decide how they talk about the merger. If you don’t bring them along with your narrative, your reason why, and your change journey, then they will create their own… and it may not be complementary. 

Give all these stakeholders the gift of clarity, and in turn they can be ardent supporters and advocates for your future growth.

In Conclusion

Planning and executing a merger of brands with intentionality separates the mighty from the mediocre and can be the difference between flourishing and failing. Integrating a brand and its associated culture quickly and intentionally mitigates many of the risks and builds a resilient and successful organization of the future.  

Regardless of who you are communicating with, remember that at the end of the day, you’re dealing with people, with all the complexities of human emotion, especially when impacted by the insecurity that can come with change.  

By building an intentional communication plan, that shares your reason why, the value proposition of the merger or acquisition, and the journey ahead to realize the increased value for your customers, community and employees, you can help ensure the support you need for a successful outcome. 

Align the culture and the brand; engage employees; and communicate, communicate, communicate—because at the end of the day, a merger of two companies is the coming together of human beings—people—to work together, to serve their customers, and collaborate with their partners. People interacting with people.  

And people always excel when excited and engaged in the pursuit of something greater than their individual contribution.