So how do you execute M&A well? In our experience guiding c-suite leaders as they navigate the process, we've noticed there is no one-size-fits-all solution. But there are several critical questions that make the difference between a purposeful implementation or a floundering one. Addressing these seven issues with confidence will allow you to lead effectively in the wake of an acquisition and ensure your newly expanded organization can thrive.
1. Why did you acquire the other company?
One of the best ways to help internal and external audiences understand your vision is simple: explain it clearly. How will you tell the story of the acquisition, its purpose and how it moves the company forward toward its business goals? Maybe it fulfills a need for additional manufacturing capacity, fills a gap in your product offerings or expands your reach to a new territory or vertical. Whatever it is, clearly articulating the rationale behind the move will strengthen your business by undergirding the work for the broader team. (And it will need to be repeated frequently, as we’ll explore below.)
2. How will you tackle the triggered emotions?
Change almost always inspires feelings of resistance among internal and external stakeholders—fear and anxiety chief among them. In one conversation with a contractor during acquisition research for a brand, his biggest concern was whether the brand he’d long been loyal to would remain consistently loyal to him in return. What he needed in order to let go of how things used to be was a compelling vision to move toward. When you engage people in the creation of this “different but better” future, you turn potential critics into advocates. While emotion is never the sole driver of the brand architecture solution, an effective leadership team should be aware of how internal and external stakeholders are feeling and accurately manage the new emotional landscape with good communication and pre-emptive training.
3. How soon will you communicate about the acquisition?
The thing we most often hear from the c-suite is “We’re not ready to communicate our vision yet.” Yes, you likely don’t have the whole story. But by the time you have it, it will be too late. If you don’t start communicating, your competitors, customers and industry will tell your story for you, and it may not work in your favor. You don’t need all the answers. Start with your intentions—your overall goal and vision for the company—as soon as the acquisition is announced. It can be a high-level story to start, so long as it helps people understand how they may fit into the next steps for the company. As things develop, you can beef up your communication, up to and including detailed and holistic training for everyone involved. Communication is crucial. Don’t delay it, don’t delegate it and never neglect it.
4. How will you control the conversation?
Clear, proactive communication from leadership fosters trust. It also helps mitigate misunderstandings, gossip and rumors that can negatively affect morale. That’s why major customers should hear the acquisition or merger news from you first. Without preemptive communication, you leave it up to your sales team to craft and tell this story, putting your company at the whim of their fears about losing business. Unconsciously, it may motivate them to share something in a different way than you intended. Note that when you do communicate, it should never be as simple as “here’s the acquisition we just made.” It needs to be framed in terms of what your audience is gaining, not what’s being taken away.
5. What’s the equity of the acquired brand?
As part of any M&A strategy, you need to understand what built-in equity or baggage came along with the acquisition. A good place to start is any VOC (Voice of Customer) or brand equity studies that can inform you of the perception of the acquired brand in the market. Leverage the research to clearly understand where customer loyalty resides—is it in the overall brand, product, technology and/or sales team? Once you understand the company’s differentiators, you can begin to formulate the brand integration recommendations. It’s an opportunity to capitalize on the brand equity you already have on your side—and most importantly, avoid unintentionally letting an advantage go.
6. What is the new dynamic between the existing and acquired companies—and what are the trade-offs of the new brand architecture?
Do a deep dive to understand the relative strengths and weaknesses of each brand. You’ll have to weigh how different visions for the architecture of this new company may impact internal and external audiences. Who will become the lead brand, what brand/product names stay and which sunset, what will you do with crossover product portfolios or branded technologies, how will you cohesively blend teams and cultures—there will be tradeoffs to weigh at every juncture. But doing so helps you devise a plan to make a stronger, more profitable company post-acquisition.
7. What is your future acquisition strategy?
When evolving your brand architecture, think about your long-term business goals. Will you be adding more brands in the same category? Expanding to bring in other related products or reach new markets? The “home” you’ve built for your brands should be able to accommodate change without jeopardizing the entire structure. The clearer your vision, the better able you are to create a flexible brand framework that can easily accommodate new acquisitions logically and efficiently without upsetting the existing structure, creating confusion or requiring excessive rework.
The final word
When the ecosystem of a major brand is disturbed, there’s a ripple effect across the organization. Handled improperly, that can lead to confusion, lost productivity, lower morale and lost customers. On the flip side, a well-executed acquisition can lay the foundation for exponential growth through enhancements to the company’s brand, reach and sales over time.
It can feel like a tightrope walk. But by assessing and planning for pain points with an accurate eye, you're better able to earn customers’ confidence to stick with you through the speed bumps. Doing so ensures you maintain and build strong partnerships, so that all your stakeholders can support the transition with the knowledge that while change can be hard, it will have long-term benefits.
For an example of a successfully branded acquisition, see a breakdown of how we helped MI Windows and Doors become MITER Brands.
