Mergers and acquisitions (M&A) are frequent events in modern business. Closing M&A deals might seem like the culmination of months or years of work, but it’s only getting started for learning leaders. Often, there’s a change in branding, and brand training can mean the difference between success and failure post-M&A.
Some Hard Statistics
Over 75% of US industries have become more consolidated.
Since 1990, over 75% of US industries have become more consolidated, resulting in higher market concentrations and profits. So, the question is how to ensure an M&A is successful when it happens, not if it happens. But even if it’s almost inevitable, successfully merging two brands can prove difficult.
A Deloitte report found that $10 trillion was spent on M&A in the previous 7 years, but 46% of respondents said less than half of the deals from the previous two years generated expected return on investment (ROI). In addition, voluntary turnover increased by about 12% before or after M&A. In PwC’s 2017 M&A Integration Survey , it was found that 42% of organizations failed to fully integrate the involved companies, and 58% reported it was difficult to integrate.
The conversation around M&A is almost all financial or data-driven, but let’s not forget the human element. Significant organizational and behavioral change is required to maintain performance. Unfortunately, brand training is frequently neglected during this transformation.
Brand Mergers in the News
42% of organizations failed to fully integrate
The Walt Disney Company recently acquired 21 st Century Fox for almost $72 billion. Everyone in the world could probably articulate the Disney brand. We’d talk about Mickey Mouse, Disneyland, animated films, or princesses. But 21 st Century Fox, with a long and varied film history, had obvious brand compatibility issues. Could the Simpsons exist alongside Mickey and Minnie? Could the Alien franchise find a home in Cinderella’s castle? Fox’s sub-brands like Fox Searchlight were known for independent cinema: a far cry from Disney’s box office giants and four-quadrant crowd-pleasers.
Disney set about swallowing up the 21 st Century Fox brand and discarding what didn’t fit. It also meant job loss and a more homogenized box office. Disney, with the stronger brand, found ways to successfully communicate the changes privately and publicly like the 2019 launch of streaming service Disney Plus. After only 3 months, Disney Plus had 28.6 million subscribers , all of whom can log into the service and see Homer Simpson and his family right alongside Mickey Mouse and friends. But, while this was a branding home run for Disney, many of the unique aspects of 21 st Century Fox have fallen away.
Post-M&A Brand Training Tips
Though much of the rebranding initiative for Disney was externally facing, many of their internal brand training efforts went unnoticed. So, we’ve gathered a few brand training tips that will surely help in an M&A:
- Transparent communication that is early, often, and detailed will go a long way toward easing employees’ fears. Without the context of why changes are happening, employees will probably assume the worst. Some employees might start looking for new jobs rather than stay and risk negative changes.
- Developing a framework to identify and measure the indicators of successful integration will show how your company is responding to the transition. Consider an extensive needs analysis to determine the training your company needs and how to implement it.
- Reshaping business processes that align departments won’t happen without buy-in from the bottom up. Brand training can help employees understand why the change is necessary and relevant to them. When training is not specific, it’s not effective. It’s also important that successful ideas from both companies are integrated into training. If one company simply cannibalizes the other, the cost is often human, and employee morale will decline.
- Roll out training in phases so employees don’t get overwhelmed. Mergers and acquisitions can lead to moving offices, downsizing, or a host of other practical problems. Employees already have enough on their plates.
Of course, brand training has to shape a new identity and values, but that content is easy enough to design. What’s most important is that you prepare employees for the transition by increasing buy-in and engagement.
Investing in Change
The stakes are high in today’s increasingly-consolidated market. When billions of dollars are invested in M&A, billions of dollars have to be earned. Otherwise, the narrative can easily turn into failure. Because of this pressure, it’s easy to overlook the human aspects of M&A that can lead to success.
Brand training that’s specific and personal to the employees involved is an investment in the people behind the change . When communication and training combine, employees will be invested in the change, too. The fear of the unknown is replaced with excitement to tackle the new challenges post-M&A.