Mergers and acquisitions are rife within the healthcare sector. Total transaction value in the first half of 2016 rose by 72% over the previous six months – from £7.8 billion to £13.47 billion, according to the Berkery Noyes’ industry trend report.
Huge deals, including the multi-billion pound merger of healthcare information and tech services company IMS Health with Quintiles Transnational Holdings, will shine a spotlight on the operational issues of M&A activity. But many of the M&A deals that don’t realize the potential envisioned for them cite ‘soft’ issues as the cause of failure; they are legally and financially sound, but culturally fractured or without direction. CEOs and leadership teams therefore would be wise to consider the emotional journeys of the management, employees, customers and partners and use the brand as a lever in smoothing the journey.
All too often, brand is seen as graphical, peripheral or a marketing tool — something of an afterthought and delegated to marketing and communications — not, as can be the case, the central organizing thought, answering the question of why the company exists.
A select group of companies has shown that this is a tremendous mistake. The brand-savvy leaders of GE, IBM, 3M and Nokia, to name a few, put brand in the centre of their integration decision-making. They use brand as a bigger force to successfully bring firms together, united under a single idea and thereby deliver meaningful and enduring impact for the new entity.
Used as a touchstone for setting the integration agenda, brand can separate winning deals from disappointing mash-ups. More specifically, brand can:
Create a shared purpose
One of the biggest challenges in a merger is melding two distinct cultures, each of which is strongly bought into the culture they already have. But brand is a great unifier. A shared brand purpose, built from key cultural legacies of each firm, can galvanize teams under a new and better idea.
Great brand purposes don’t just align cultures and values; they tell a compelling story about why the company does what it does and the value it brings to customers and stakeholders.
Use design to signal a new vision
The name and identity of a combined organization send a strong signal that positions the company for the future.
The company name, just like any other asset, merits a rigorous, fact-based assessment that carefully considers the business vision for the merger and what best encapsulates the combined company’s strategy.
Bringing methodological rigor to such questions will not only help determine brand changes, an analytical approach can also temper defensiveness and ego involvement among corporate colleagues, thereby boosting critical internal support during the change process.
Think of a visual refresh — be it a new visual system with an existing logo, a merging of the equities of the two companies, or a complete reinvention – as a unique chance to add new emotion and energy to the company, helping to convey the new company’s dynamic aspirations. In this sense, simplicity and beauty delivered through design can be transformational — imparting to all stakeholders a sense of a new beginning and shared ownership in the new enterprise.
In short if brand — emotion to a purpose — is put at the heart of the change, as Delta did when it acquired Northwest, then the merger has a higher chance of success. Exxon’s merger with Mobil was equally brand driven as was Sprint combining with Nextel, and, in pharma, Watson combining with Actavis. And there is no doubt that Bank of America’s design refresh after the acquisition of Countrywide and Merrill Lynch created a strong, inescapable signal of a new ambition.
Prioritise the employee team
Employees typically face significant uncertainty as they move from their legacy company into a merged company. Bringing them into the process early is mission critical.
Employees want to find a sense of belonging in the new organization and be part of something that’s bigger than themselves — something that embodies the DNA, culture and capabilities of the new firm. That “something” is brand.
Merger integration is a time when teams are paying attention, ready for involvement and eager for communication and direction. So the best companies rush into this opportunity with multifaceted brand-engagement programs that are exciting, participative and inclusive — and set the tone for how to communicate values and attributes associated with the new identity.
Embrace brand as a strategic compass
When brand issues are addressed too late in the integration process, brand decisions tend to focus on what is easiest to execute quickly as opposed to what will create lasting value.
At each stage of the deal process, the brand steering committee or team responsible for overseeing the rebranding effort needs to define what has to be done, who will be involved and how developments and findings will be reported. Then progress can be tracked when it comes time to forge consensus on key decisions.
Leaders who see brand’s full potential — well beyond name and logo — gain a significant leg up on the challenges of uniting companies and cultures. Viewed in the broadest strategic sense, rather than as a name-and-logo exercise, brand becomes a compass or lever for synchronizing the company’s internal culture with the face and values it presents to the outside world.
Article originally published in Global Health & Pharma on October 27, 2016.