Beating the clock: rebranding a split-off on a legal deadline

Beating the clock: rebranding a split-off on a legal deadline

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Tuesday, January 21, 2020 | Marie Greatrix

Rebranding as a result of a split-off divestiture presents a number of challenges that make it different (and a good bit trickier) than other types of rebrands. Of course, all rebrands are executed on a timeline, with deadlines that must be met. However, in the case of a split-off, the deadlines for completing brand change are often legally mandated. This means that the newly split-off entity may face penalties or fees for noncompliance if they don’t manage to complete the rebrand on time. With so many details to tend to, even the most diligent marketers may find it challenging to fully execute a split-off rebrand without missing a legal deadline.

If your company is planning to rebrand as a result of a split-off, now is the time to start planning for a smooth — and timely — transition.

The challenges of rebranding a split-off with a legal deadline

Split-off rebrands involve many of the same logistics as any other rebrand, but with a few added twists. To begin with, there is usually at least some initial confusion around the specifics of the split, including who will work for which company and how assets will be divvied up. Pair that with a hard legal deadline for transitioning the new entity’s brand, and you have a recipe for confusion and chaos.

In many ways, it’s a bit like a divorce. The old and newly split-off entities have to work together to figure out how best to divide assets, including everything from office space and vendor contracts to the marketing tech stack (including the digital asset management system, or DAM) and licensed artistic materials (such as promotional photography). In addition, they must agree on a timeline to complete this division.

Due to these factors, a split-off rebrand produces the following risks and logistical difficulties that must be properly managed:

  • The risk of fees or penalties if the split-off entity doesn’t rebrand in time. Typically, split-off contracts only apply penalties and fees to external-facing branded assets. Internal assets that customers won’t see, such as HR paperwork or order forms, are often immune. However, the specifics of what is required vary from deal to deal and should be clearly delineated in your contract. When organizations rebrand without a legal deadline, they are free to prioritize the order in which they convert branded assets based on the larger goals of the rebrand. But Iin the case of a split-off with legal deadlines, organizations must proactively prioritize any assets that could potentially incur a fee or penalty, and potentially weigh them ahead of other strategic imperatives. (In some cases, the strategic value might justifty the cost of paying a penalty.)
  • The risk of overspending to meet the legal deadline. Unless an organization puts together a rock-solid plan to execute its split-off rebrand, the likelihood is high that it will overspend in an effort to finalize the transition before the legal deadline.
  • Lack of clarity about how assets will be divided. Until both organizations are clear about exactly how their shared assets will be divided among them, the newly split-off entity will be unable to properly plan for the transition of its own branded assets. With a legal deadline looming, both parties must come together as early as possible to work through these details quickly and efficiently. Depending on who gets what, the split-off company may need to negotiate new contracts with existing agency partners, obtain new licenses for artistic materials, before the brand can be fully transitioned, and address other areas of potential overlap.
  • Interdependencies are harder to anticipate. Understanding interdependencies — or the many ways each individual rebrand activity or detail impacts those around it — is a critical part of successful rebrand implementation planning. Many organizations find they need assistance identifying and planning for all the interdependencies that exist within their rebranding plan in order to implement the rebrand smoothly. When it comes to a split-off, identifying and planning for interdependencies is all the more challenging. The process of breaking one entity into two is just that—a process. It’s a bit like pulling apart a piece of taffy; it’s a slow separation, not a clean break. Rarely is it possible to plan a split-off rebrand with every detail and interdependency known from the start. When we work with clients preparing for a split-off rebrand, we lead the way in anticipating and identifying interdependencies as they emerge.
  • Roles and responsibilities aren’t always clear right away. Seamless execution depends on the existence of clearly defined roles and responsibilities—both within an organization’s internal team and any agencies they work with. Early on, it’s not uncommon to have some fuzziness about job titles, staffing, and agency relationships for the newly split-off entity. This makes it more challenging to effectively plan for the rebrand, since it may be unclear who exactly will be responsible for what.

Planning proactively for a split-off rebrand’s legal deadline

If your company is planning a split-off that will necessitate a rebrand, consider the following tips to get your planning started on the right foot:

1. Get your legal and regulatory teams involved right away. This one almost goes without saying. When it comes to a split-off rebrand, you must consult your legal and regulatory teams immediately to come up with a fair contractual agreement to guide the split. In addition, check to be certain your legal team has begun the application to register the split-off organization’s new name, mark, and tagline, including conducting a full search (don’t rely solely on your branding agency to perform the search).

2. Make sure marketing has a seat at the table. Your newly split-off organization’s marketing team (and your rebrand implementation partner, if you have one) should seek a seat at the table to discuss the terms of the rebranding agreement as it is being written. Your organization needs marketing’s input to come up with a realistic timeline for transitioning the brand based on your company’s specific situation. In our work with clients, we often consult on the timing and feasibility of various rebranding scenarios. When a legal deadline is at play, this perspective is even more critical.

3. Map the legal requirements to affected assets and interdependencies. Once you know the legal requirements, you must map them to all the affected branded assets in all areas of your organization. For example, this might include things like signage, products and packaging, and digital collateral. Next, you’ll need to proactively document any interdependencies related to those assets in order to formulate a comprehensive plan. When BrandActive partners with clients in the process of a split-off rebrand, we take the lead in mapping these relationships and building a plan to account for every detail.

4. Communicate the plan internally. Much of the confusion around a split-off rebrand can be headed off with good internal communication. Both companies must have an understanding of what is happening, how things are changing, and when they can expect various changes to take place. This is especially true as the two entities first start to separate, when confusion is liable to be at an all-time high. Consider implementing a help desk with up-to-date FAQs to keep everyone on the same page.

A split-off rebrand with a legal deadline can be daunting. But with the right planning and execution, it’s possible to transition your newly split-off company without a hitch. Want help thinking through the particulars of your split-off rebrand? Drop us a line.

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