M&A activity is picking up.
According to a Deloitte survey conducted in late 2020, 42% of executives expect M&A deals to reach pre-pandemic levels during 2021. In a more recent report, Morgan Stanley projects not just a rebound in M&A, but an acceleration spurred by strategic consolidations and cross-border activity, and a surge in deal-making for COVID-affected sectors. Intralinks’ Deal Flow Predictor recently reported that early-stage deal flow in North America was the highest seen in the trailing eight quarters. And globally, the value of M&A transactions announced in February 2021 was the highest ever in February since Refinitiv started tracking data back in the 1970s.
There are lots of good reasons to believe this forecast. For one, companies are looking to expand—the avalanche of tech mergers are prime examples of this, as is the recent announcement of the $7B M&T Bank/People’s United Bank combination. Other companies are striving to boost their competitive stance and achieve economies of scale: take the recent spate of mergers in the computer chip sector, exemplified by the recent Qualcomm/Nuvia announcement. Still other companies are pursuing strategic consolidations or acquisitions, especially those in hard-hit industries such as energy and transportation.
Right now, senior marketers at firms across sectors are more likely than ever before to find themselves adding a rebrand implementation to their growing list of priorities.
Even as industry sectors recover, however, it’s not yet business as usual. And that applies to how rebrands get done. As a result, marketers managing rebrands due to M&A and divestiture activity need to address changing circumstances and expectations around how rebrands are planned, budgeted for, and brought to life. Over the past year, new risks and challenges to rebranding have emerged—along with some innovative approaches that will likely stick.
This all adds up to an increase in the complexity of an M&A rebrand—a project that many marketing executives may only encounter once in a career. And even if this is your second time around, you’ll soon find that right now, both expectations and practical realities have changed. Here are some examples:
How expectations of an M&A rebrand are different in 2021
Expectation #1: Lean harder into brand as a way to define culture and unify employees
For decades, this has been true: Most M&As don’t actually deliver the results they are designed to achieve. Failing to integrate the merging organizations properly is a frequently cited reason for this shortfall. The lack of a shared culture shouldering a huge share of the blame. This is especially worrisome now, as over the past many months, even long-time co-workers have trouble feeling connected to their companies given that many continue to work remotely. As a result, uniting two organizations behind shared purpose and values has only gotten harder.
The M&A integration process always works best when it starts early and includes top executives from across the organizations. As IESE Business School professor Nuno Fernandes writing for Harvard Business Review stated: “Not being aware of or planning for those differences is the real value killer. During a well-managed M&A, the majority of cultural issues will be identified – and solutions prepared – before the deal closes.” That’s why senior marketing and brand executives have always needed a seat at this table. What’s new is the even more critical role that employee brand understanding and brand experiences can play in bringing two organizations together in a largely virtual world.
Done well, a strong brand serves as the foundation of the new entity. Much more than a logo, brand defines a shared vision to unify the stakeholders of the soon-to-be combined organizations. Brand isn’t just about visual identity—it can and should define the new company’s reason for being.
In practical terms when it comes to launch and roll-out, executing an M&A rebrand now requires you to design new ways to communicate brand and purpose to employees. Business-as-usual physical events and branded internal environments aren’t useful options right now given the extent of remote work. For some of our clients, that’s meant mailing brand launch celebration kits to every employee’s home, expanding the scope and audience for brand education, and finding creative ways to infuse brand into virtual gatherings.
Expectation #2: Lead with digital as some physical places of business are not fully open
Traditionally, getting signage right has been the first priority in a rebrand. Nothing broadcasts that we’re now one company as visibly as new branded exterior signs. Employees and customers both see these signs on a daily basis. But with many worksites still shuttered and business being conducted online, some rebrands have become digital-first affairs. While companies still usually need to rebrand signage at primary corporate sites, some marketers are waiting to transition signage at secondary sites– gaining the benefit of stretching out the timing of the investment without affecting brand impact. There the emphasis is on digital-first.
But what does “digital first” mean in practical terms? In our experience, the first step is doing the work to get your digital branded assets in order so that you understand exactly which assets each company uses, and which will need be carried forward under the new brand. Get help if needed to do a timely, thorough inventory of digital assets then analyze how these can be rationalized. This activity alone can vastly improve brand impact—and will reduce the costs of brand and marketing operations during initial transition and for years to come. As part of this effort, don’t forget to get your digital brand governance processes in order. That’s essential to ensuring your brand is consistently and effectively expressed across all digital channels.
Expectation #3: Bring more agility to M&A rebrands
M&A rebrands have always required marketers to operate on tight timetables driven by deal requirements. But for the foreseeable future, the concept of agility applies in a host of new ways. Here are a few of them:
Work around lingering supply chain issues
Even if your company chooses to lead with digital first, you’ll likely still need to rebrand some physical assets in the near term. Exactly which ones vary by industry—they may include products and packaging, signage, fleet vehicles, promotional items, and brand launch materials. Because pandemic-induced supply chain issues linger in some areas, you’ll need to create a plan that enables you to address priorities and hit key deadlines. For example, our rebranding experts anticipated a shortage of acrylic and LED products, so we engineered some clients’ signage using alternate components, avoiding those materials in short supply altogether. For other companies, we’re using multi-vendor strategies to ensure there’s an adequate supply of key materials and personnel to rebrand fleet vehicles within given timelines.
Manage intense budget pressures
Many companies—especially those merging due to industry downturns—are scrutinizing every expense involved with merger integration. And while brand has taken on elevated importance, rebrand budgets aren’t necessarily expanding in proportion. So, marketers are doubling down on tactics to manage spend. The most important move to make is scenario planning. By gathering the right data up front and modelling out the possibilities, you’ll be able to pinpoint the cost of brand change; present accurate options to senior management; and uncover opportunities to manage spending by adjusting scope, quality, timing, and other factors. Pair that with savvy specifications and vendor sourcing approaches, and you’ll be able to deliver an efficient, timely rebrand—without compromising your intended outcomes.
Execute rebranding activities with a largely remote work force
Many companies have experienced reductions in force, and lots of employees are still working remotely. This resource strain can complicate the execution of even the most well-designed rebrand implementation plan. Factor in the tsunami of activity required to integrate an M&A deal in normal times, and getting the work done well and on time may seem out of reach.
But it’s not. There’s no magic fix—you just need a solid plan to be able to understand what you’re facing. That means identifying the dependencies, risks and specific processes you will use and mapping out how best to use available internal and external resources. With this information in hand, you’ll be able to align management expectations accordingly.
Here are a couple of situations we’re encountered during this era of COVID and remote work, and the solutions we’ve devised:
Issue: Need to inventory branded assets such as fleet vehicles on-site, but the facility isn’t open to vendors due to COVID
Solution: Equip facility or fleet managers with mobile survey technology to enable easy data collection and quick analysis
Issue: Need to get approval for new designs for signage but everyone is working remotely and can’t visit vendors to see prototypes
Solution: Create virtual or 3D models prototypes of key signs to ensure internal alignment and high-quality outcomes
With M&A activity at an all-time high, the incidence of rebranding is spiking. A successful M+A related rebrand requires a solid understanding of the issues, a good plan to address them, a bit of creativity—and for many companies—the right rebrand implementation partner. Interested in learning more about how BrandActive can help your organization navigate an M&A rebrand? We’d love to connect.