Consider three lenses when building your go-forward brand

According to the Harvard Business Review, most mergers fail to achieve their ideal outcomes. The stats are even worse in the professional services and tech sectors, where as many as 90% of mergers can be considered failures.

There are two reasons why this is the case. First, poor due diligence combined with inadequate strategic and tactical planning are to blame, ultimately impeding success. Second, it’s a matter of execution failures due to weak branding and communications and insufficient cultural integration and customer engagement, all of which create unforeseen barriers that inhibit the realization of the merger’s objectives.

In my experience, it’s the latter that businesses need to be most wary of — an iceberg of sorts. While only one piece may be visible at a time, it can sink your ship, fast. Navigating around and through these impediments will have a dramatically positive impact on merger success. And by closely examining these “possible points of failure,” we can address them and avoid them altogether.

To do that, you must consider everything related to your merger via three progressive lenses.

Editor’s note: This is part one of a two part series from David Martin. Here’s part 2.

Lens 1: Business strategy

When companies come together, there’s no shortage of consultants poised and ready to provide counsel. Unfortunately, most will inherently focus on supply-side issues like structure, cost synergies, and talent rationalization. Few concentrate on the demand side of the equation, which is one of the most critical points of failure.

Through this first lens, leadership must understand where demand-side synergies exist. Identifying and understanding vertical synergies — that is, the benefits of linking business units to a new, ideally more powerful parent — is always step No. 1. But the real value comes from understanding the horizontal synergies — that is, what happens if we bring together business unit A with business unit B? What possible opportunities might there be to bring new capabilities to market that help clients/consumers do things they’ve otherwise never been able to do before? Or how does the integration of units A and B open the door to creating a truly end-to-end solution that might turn the market to our advantage?

The voice of the customer interviews is as versatile as it is helpful in this case, and by talking to friendly clients, you can get a clear sense of the opportunities they expect the merged entity to deliver that neither partner alone could have. These also create a distinct opportunity for businesses to engage with their current clients as partners and weave them into the integration in a productive way. I’ve seen firsthand how customers can shift their allegiances during this stage as they feel they have a stake in the new firm’s future and feel invested in its success.

By focusing on the business strategy first, you can capture inputs and insights on what the newly merged brand must enable, including how the product and service portfolio must be organized to realize demand synergies.

Just as importantly, it also reveals the story that must be told — that your business must take action to ensure that internal and external targets understand what the merged company will deliver, why it’s committed to this, and how it will credibly make it happen.

Lens 2: Brand strategy

The new, merged brand must enable its broader business strategy, engaging internal and external audiences by defining and expressing the new company’s purpose, values, and promise. The essential first step is to determine the role your business plays in the lives of the customers/clients you serve and compare that with the opportunity to expand that role to provide even more value.

The key to the effort will be to understand core equities, ideally uncovering the role of existing brands in the portfolio and determining the type of brand structure required to distinguish the new company and call attention to its value.

Major mistakes were made over the years in the name of realizing cost savings by moving too quickly to unveil a new merged brand without carefully migrating existing brand equities. Just consider the world of American Money Center banks. Each big bankrolled its significant acquisitions into monolithic brands without successfully migrating the acquired brand equities into the new one. The result? Big brands with muddy positioning. They have the scale but need clear relevance for essential banking market segments. The brands they acquired had relevance, but the rush to consolidate diluted that relevance, such that today, these merged brands stand for nothing meaningful in the eyes of the market. They’re pure utility brands.

Lens 3: Experience strategy

A wise client once explained that an engaging promise is only good once it’s fulfilled. The proof is always in the experience — while building the merged brand was necessary, it is only a tiny portion of the ultimate value. Engaging without fulfilling provides no value and, in fact, it may detract.

That’s because value is only generated when the brand promise is fulfilled through a compelling experience, which requires two key initiatives. First, as part of the ongoing voice of the customer assessment, the current customer experience being delivered by each company must be mapped and evaluated. How well are we fulfilling our role? What are the hallmarks? What are the pain points? Where are the opportunities for differentiation?

Second, we can then determine the degree to which these experiences can be blended to make the overall experience better. How can we better fulfill our role? What strengths should we adopt? What should we do more of? What should we stop doing? What should we start doing?

We can then test this with customers to gauge their reactions. What works for them? What requires refinement? What needs new development?

Then it’s back to the drawing board to develop 2.0 — to refine and improve the forever goal.

Once the ideal experience has been identified, you can begin efforts to transform and unite the company’s culture around delivering this new experience. This often requires workshopping to identify a shared sense of purpose, values, attitudes, and behaviors that best reflect someone equipped to fulfill the role and deliver this experience. Together, we model this and then work with high-potential employees as peer influencers to cascade these throughout the company.

Once this cultural transformation has been shaped and shared, we must build a plan to ensure accountability remains the priority. This involves establishing an ongoing assessment process and building KPIs and dashboards to monitor the integration and continued health of the culture.

Editor’s note: This is part one of a two part series from David Martin. The second part will be published tomorrow, November 28.