By Kirsten Foster, Executive Director of Strategy, EMEA, Landor
It's been a busy few months in merger circles. Last month's news that data giant Markit and IHS are to tie the knot followed announcements from Shell that it is to buy BG Group, and AB Inbev's purchase of SAB Miller.
The directors of these companies, plus their assorted advisers, may be burning the midnight oil for many months to come tying up the financial and legal details of the deals. But if anything, the toughest work is still to come, as they attempt to stitch together the organizations' brands into one coherent story.
We have learned from the many merger, acquisition and corporate restructuring projects we have worked on that weaving together two corporate identities is a process that requires careful planning and even more careful execution. The new organisation will have a wide range of stakeholders and they all need to be persuaded that the brand narrative that emerges from the merger is a convincing one that they can support by creating an inspiring representation of the new business strategy.
First among equals of these stakeholders are the employees – nothing can progress if this group isn't sufficiently on board. To begin to plan this communications task it is worth trying to understand how this process can feel from their perspective.
It can be destabilising for staff to watch as their corporate 'parent' suddenly disappears or changes identity, so it is essential that the new story makes sense and offers them all a credible, exciting future. They need to feel pride at being part of this development; the brand is an expression of and promise for this new combined future.
But be aware of breaking the promise the new brand makes. To see how important this is, you only have to look at the experience of the Sprint/Nextel merger in 2005 in the US. The deal made so much sense on paper, bringing together a mobile phone firm with one that specialised in infrastructure. There was excitement and a brand promise that spoke of an equal share in a visionary new company. But the former Nextel staff left in their droves, claiming that the brand promise of a new, joined culture wasn’t kept, that the culture and brand of Sprint was imposed on everyone.
Secondly, a new brand in a merger situation, should avoid tapping only into the expertise and heritage of the former organizations, but must present a tangible step into the future, justifying the huge change. If you make the brand only reflective of an area that the company seems comfortable in, this is a clear sign that it has a sell-by date. Take advantage of the spotlight by challenging your people to move beyond what they have always done, and create a brand that exemplifies this revolution.
This is what we helped to create when we worked on the identity for DNV GL – the combination of certification companies DNV and GL. Both had a strong heritage, centred around their maritime origins. But we focused on the broader vision of the sum of their parts – what the new organisation can do that no rival can.
Covestro is another example of how a compelling new brand story communicated the vision of a new company during a corporate restructure. This newly formed organisation, created out of an IPO instigated by parent company, Bayer AG, came together in a brand that represented a global innovation company and a compelling vision of the future. This inspired employees as much as it did investors.
The salutary warning in terms of merging brand narratives is of course AOL Time Warner. Like Sprint/Nextel, it was promising in theory, but fell apart because the two companies' cultures proved incompatible. There was no brand narrative that guided the two organizations into the future.
The merged organisation was not sufficiently forward-looking in its ambition and the incoherent actions of the two firms swiftly dated the brand.
It's all about making the former companies add up to far more than the sum of their parts in the merged operation, offering stakeholders a future-proofed brand narrative that feels both relevant and exciting.