This article was first published in ‘Future CEO’ by Raconteur in The Times on 26 January 2022. To download a full copy of the publication visit Raconteur
M&A volumes are on the rise
Amid a blazing hot M&A climate, CEOs have a responsibility to ensure their brand remains one of their most valuable assets during – and after – the acquisition process. So, smart marketing management, underpinned by technology, must be high on the agenda.
2021 was an historic year for mergers and acquisions activity with global M&A volume hitting $5.9tn, shattering pre-vious records. So far, 2022 looks to be just as robust. The red-hot market brings with it a host of challenges for the C-suite– from driving value for stakeholders to ensuring cultural compatibility internally. However, in the midst of navigating the M&A maze CEOs can often lose sight of the most critical factor in ensuring success: the value of their brand.
The value of brand in the M&A process and beyond
A target company’s brand is often a key consideration of attractive-ness to management, shareholders and investors. In a post-Covid-19 world, brand is ubiquitous. It touches everything within a business. There’s also the prevailing theory that ongoing brand investment is the only way to weather economic storms. As per the Institute of Practitioners in Advertising (IPA), brands that invested in growing excess share of voice by 8% during the 2008-9 downturn grew their market share by an average of over four times more during the recovery phase.
'Amid a blazing hot M&A climate, CEOs have a responsibility to ensure their brand remains one of their most valuable assets during – and after – the acquisition process. So, smart marketing management, underpinned by technology, must be high on the agenda.'
To rebrand or not to rebrand?
With Bain and Company predicting that M&A is expected to spur 45% of revenue growth over the next three years (up from 30% over the past three years) modern CEOs must learn to balance the needs of commercial success alongside long-term brand building and management. Effective and efficient brand management, by those who understand all aspects of it during these transitions, should not be underestimated.
The CEO brand challenge
Decisions relating to a merger or acquisition can be very complex; one huge one is to rebrand or not to rebrand.
For Ross Haxton, Commercial Director at GLIMMA, a full-service global brand management agency, this means brand and business strategy are inseparable, with the future success of any union reliant upon selecting an appropriate model for managing the brand’s key M&A objectives.
Haxton says that in M&A situations it is vital that brand is considered early in the integration process. “This will help to speed and smooth the acquisition process, protecting the value of investment.” He argues that when the branding and corporate values of so many take-over targets are developed quickly in “startup mode,” there is risk that buyers are working with “inherently flawed” brand blueprints.
“CEOs often need to bring it back to basics, audit their new purchase to establish the core brand offering and key positioning. From that, they can develop marketing and physical branding that will drive success.” The CEO, he states, is the driving figure in this whole process, working with HR and the marketing department to involve the whole business in an internal brand engagement programme.
'Effective and efficient brand management, by those who understand all aspects of it during these transitions, should not be underestimated.'
Brand Guardianship Index 2022
According to Annie Brown, Associate at Brand Finance, “good CEOs are those who nurture relations with all stakeholders, and enhance the reputation of their brands as a result”. This is evident in the recent results of the 2022 Brand Guardianship Index, the annual report on the world’s top 100 CEOs.
Emerging on top for 2022 is Satya Nadella from Microsoft, who has been credited with the successful acquisition and integration of major brands including LinkedIn. Since joining the business he has also instilled a growth mindset, evolving the brand’s purpose from “putting a computer on every desk and in every home” to “empowering every person and organisation on the planet to achieve more. The CEO plays an increasingly important role in managing brand amid an M&A, with Haxton seeing it as their duty to steer two marrying companies through any potential “cultural clashes”.
“CEOs need insights to understand the ‘successful elements’ from each brand, but they also need to navigate the politics of how brands are taken forward into the new scenario.” Seamlessly integrating brand into the M&A process.
So, how do CEOs seamlessly integrate brand into the process? The answer lies in smart brand management, underpinned by technology. GLIMMA works with clients such as FedEx and Delta to make this a real-ity, offering end-to-end solutions which combine brand consultancy with on-the-ground implementa-tion. Their team of consultants offer digital solutions that help CEOs rollout brands efficiently and cost-effectively. “What we’re seeing is that, especially when they’ve just undergone an M&A, many companies don’t fully understand the assets they have – whether that’s digital or physical. We can audit brands and provide a single gateway to all their brand data.” “We integrate systems which can standardise products and processes and deliver high volumes of data that allow them to clearly understand their assets and govern their brand more easily.”
'The CEO plays an increasingly important role in managing brand amid an M&A, with Haxton seeing it as their duty to steer two marrying companies through any potential “cultural clashes”.'
For some clients, this can yield a 20 to 30% saving in efficiency. By switching from manual to automated processes, introducing global specifications and seamless ordering and payments, GLIMMA can work quickly and with large volumes, significantly reducing the costs and even the environmental impact typically associated with global brand management.
When it comes to branding and rebranding post M&A, Haxton says companies often need additional support and specialist expertise, as well as resource, to effectively manage their brand. Failure to do so carries a huge risk to the success of not only the union, but the business too. “The brand is the North Star for the full organisation, led by the CEO. We can help CEOs work top-down and create impetus for a big brand push or rebrand, but also bottom-up – using data to inform key decisions and drive success.”
'Good CEOs are those who nurture relations with all stakeholders, and enhance the rep-utation of their brands as a result.
Most commonly it’s the financial value of the business in question. An M&A decision is generally commercially driven: be it to gain market share, eliminate a competitor, take hold in a new market or simply diversify.
In merger and acquisition situations, there is a union of different organisations with distinct brands. It’s vital that brand is considered early in the integration process. This will help to speed and smooth the acquisition process, protecting the value of your investment.
In part one we looked at Five Rebrand Strategies. In part two we dived into the Creative Process of developing a new brand.