Overcoming key risks to capture the full value of an M&A-driven energy rebrand

Overcoming key risks to capture the full value of an M&A-driven energy rebrand

Share

Tuesday, September 8, 2020 | Philip Guiliano, Adrea Fink

If your energy company is headed toward a merger or acquisition, then you know a rebrand is almost certainly on the horizon. Any rebrand represents a major undertaking. But the usual rebranding playbook simply doesn’t account for all the complexities and potential stumbling blocks found in an M&A-driven energy rebrand.

From regulatory requirements and safety guidelines to decentralized operations, you have a lot to consider. Getting it right will require careful, informed planning — and an understanding of the enterprise brand value you can deliver by seeing your rebrand through to completion.

Fully implementing your M&A-driven energy rebrand requires an investment of time and resources. But you can create a compelling business case demonstrating that your investment will improve the success of the merger, lead to money-saving operational efficiencies, increase employee engagement — and improve your business stature and company value. For all of these reasons, it’s clear that fully executing your M&A-driven energy rebrand is the strategically sound way to go.

The top challenges of implementing an energy M&A rebrand — and how to navigate them

M&A-driven energy rebrands involve a list of unique challenges. These include:

1. Stringent regulatory requirements

We don’t have to tell you how tightly regulated the oil and gas industry is. So it shouldn’t come as a surprise that your rebrand is sure to involve a host of regulatory, legal, and financial complexities. Navigating all of those details with appropriate planning and a realistic timeline is sure to be one of the biggest challenges of your energy M&A rebrand.

If you want to ensure a smooth rebrand, you must first comb through the regulatory requirements and make sure you understand the implications for your rebrand. Engage your legal team as early as possible in the rebrand planning process. They can help you understand the timelines, requirements, legal functions, parameters, and boundaries that must be followed in order to avoid jeopardizing your entire business operations.

Finally, remember that regulatory and compliance requirements may impact your rebranding project timeline in a major way. You may have to hit pause on your rebranding activities as you wait for certain regulatory approvals to come through. Alternately, your timeline for converting certain branded assets (such as pipeline markers) may be extraordinarily condensed because of a low legal tolerance for brand misrepresentation.

2. Safety considerations

Safety considerations and logistics are a major concern for energy companies — and that extends to your M&A-driven rebrand, too. As you make plans to convert branded assets, you’ll need to account for (and make plans to satisfy) the many safety requirements governing individual assets and work orders.

For example, workwear typically needs to be fire-resistant. And signage installation plans at a refining plant may involve a host of safety protocols that your signage installer will need to be made aware of.

All the appliable safety requirements that are unique to the oil and gas industry need to be integrated into the timeline and addressed appropriately with potential vendors. in order to avoid costly mistakes and stop work orders that can jeopardize achieving key milestones.

3. Decentralized operational structures

Oil and gas companies tend to organize themselves based on product or service business units (such as logistics and refining). Because of their decentralized business structure, institutional knowledge of the various branded asset categories is typically distributed throughout the organization. This makes the task of rebranding consistently, cost effectively , and cohesively that much more challenging.

To start, you must put together a centralized rebranding team to plan, manage, and orchestrate your rebrand. Be sure to include representatives from each cross-functional team. Your goals? Break down silos, identify the full range of interdependencies, and create a unified rebranding plan — one that gives each business unit a strong understanding of the role they will play and their exact responsibilities.

4. A lack of marketing representation at the rebrand planning table

The marketing function in many energy companies is relatively small. As a result, energy companies often plan and implement M&A rebrands without the direct input of any marketing staff. Instead, the integration management office (IMO) becomes the de facto branded asset conversion management team for the integration. Or, often, the marketing team is looped in late in the game resulting in wasted resources and sub-optimal results.

As a marketing executive, you must make a case for marketing to have a seat at the rebrand planning table from the earliest stages. By doing so, you can ensure a seamless, more efficient rebrand — one that results in a consistent, cohesive brand and a greater return on investment.

5. A longer-than-average M&A process

No M&A integration happens overnight. But complications such as land and mineral rights antitrust concerns and other regulatory matters, energy M&A’s can be particularly protracted. The longer timeline can make it difficult to build momentum and focus for the rebrand. This can result in little or no proacting pre-planning for the rebrand, followed by a huge push in a short timeframe once the deal finally received the green light.

The best approach while waiting for deal approval is to have the most likely scenarios scoped and costed, with high level milestones and interdependencies identified. This will position the organization to move quickly and efficiently when it is time to implement the rebrand.

In an industry in which M&A deals proliferate, your ability to sidestep the risks of an energy rebrand is critical. Not only will it enable you to properly support your energy company’s growth goals — but it will also help you to spend less, achieve more and build a better brand.

Related Insights