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Primp my brand: How to prepare your company for a M&A or an IPO

Reasons for undertaking a major re-branding and repositioning are many: adjustments to market shifts, competitive advantage, change management, M&As, IPOs.  “Wait, M&As and IPOs?” you ask?  “Hold on,” you say: “How ever could branding and positioning help drive such major, strategic transformations and advances as M&As or IPOs in the life of a business? No way.”  Way.

While some people may still think of their brand as their logo and corporate identity, others fully understand their brand is pure business strategy. And so it is that some forward-thinking, enlightened companies planning M&As and IPOs have opted to use their brand to sharpen their profiles, advance their competitive differentiation and rise up to stand out from the rest. They had “primping their brand” in mind from the get-go, knowing full well the rich, multi-valent values a powerful, empowering brand can bring to an offering; can make of that offering.

I offer proof that companies use their brands to seek M&As and to launch successful IPOs from my personal experience. All three cases below feature international companies that followed their business-critical branding projects with IPOs and M&As within 18 months of their completed branding projects. The proprietary nature of these projects and business transactions requires that I can profile these companies, but not reveal their identities.

Case A: a national telecom bought for a “record price”

The company in this case was a state-owned, national telecom that for the first time in its history faced fierce new competition from an international rival, Vodaphone, that had recently arrived on their shores. By its own admission, the company had taken its century-old status in the country for granted, posting low market esteem scores (seen as “slow” and “inflexible”) and experiencing a divided work force (“old” vs. “new.”) They had weathered a failed IPO four years before the branding project and they wanted to go for an IPO for a second time.

Convinced they needed to raise their brand profile if this IPO were to be successful, management embraced a classic Brand Octagon project. Management was keenly committed to the process throughout, wherein we gave shape, focus and purpose to the entire company and its presence in the country. The project involved over 100 people within the company, over three months, in bespoke, highly designed, and fully integrated phases: individual, management team depth-interviews, « Rising Star » workshops with middle management (invaluable, worth their weight in gold), and market checks among consumers and business audiences to ratify results. Following final ratification with the management team, we also took results through the entire organization in formal training programs to effect true culture change. As the CMO put it, “I want to get the brand in their souls.” In parallel, management re-launched their brand to their external audiences with a new advertising campaign, a new logo and new retail stores re-designed to reflect their new brand personality.

Within 18 months, this national telecom was bought by their current parent company for a record stock price. Management credited the “branding” in the purchase process for raising their corporate profile in national opinion polls (acknowledged to be a “better company”) and for elevating internally their “great place to work” scores; the financial press deemed the purchase “well worth the purchase price”, with the IPO “exceeding expectations.” Most rewarding, management presented their Brand Octagon in their pitch to their new owners to explain the new organization. The project is detailed in full in an Ivy League university business school case.

Case B: A sell-off/sell-back delivers on a new business strategy

This case focuses on a major division of a national energy company. The product of multiple mergers over many years, the division was suffering from internal morale at an all-time low, which was attributed to “warring factions” left over from the mergers. The CEO and the Management Team understood this was having a serious impact on internal productivity and external competitiveness. While they believed the “bad reputation” of the company was unwarranted, they were concerned about losing ground to the market leaders, ABB and Siemens. The CEO sought to fix their “competitive image” through a “culture of success” and so he and his team embraced a Brand Octagon process to create this culture.

The process they chose was noteworthy and far from standard, as they wanted the organization to create their own Brand Octagon from the ground up; only a Brand Octagon emerging entirely from middle management ranks, without senior management “interference,” would be accepted. And so it was that we created this company’s Brand Octagon in three hours in one afternoon, with 320 global managers gathered together for their annual meeting. However swiftly expedited that hot, July afternoon, the totally non-standard format required the greater part of 12 weeks of preparation, with a presentation to the Management Team every Monday morning during this time for their approvals. At each management meeting, we shared with them the modules and exercises we were proposing to conduct during the afternoon session, including the entirely bespoke video clips, role plays and interactive challenges we created to meet the demanding objectives and brutal timing. In parallel, we trained 10 moderators to work in pairs, dividing the 320 people into five groups of 65, so that each group could deliver either Vision, Mission, Positioning, Personality or Promises to the final Octagon.

After a 30-minute review of results with the Management Team, with minimal emendations, the CEO proudly presented the results back to the entire group at the meeting’s close. The energy, pride and passion the entire group felt was palpable. The risky Octagon format had proved entirely worth it. To the CEO’s credit, he understood that it was the brand that would energize his staff, improve their relations with customers, and bolster morale; and it was this brand, created entirely by the staff, that did bridge these strategic needs. The goal, internal and external alignment, grounded in the Brand Octagon, was documented in significant improvements in employee and customer satisfaction and in new contracts vs. their major competition. Better morale, better alignment, a better company: the division was bought (back) by original owners within two years of this project, the purchase being Management’s goal from the start.

Case C: A small, SME software provider becomes a staple of a Fortune 15 company

The company in this case began as a European-based, small enterprise software provider, and evolved mightily in three branding and positioning waves over three years. It is by far the richest, most multivalent of the branding-based M&A/IPO cases in my experience, and one that we’ll elaborate here in more detail. Findings from these cases revealed some of the most amazing surprises about branding itself that I’ve ever encountered. And that we continue to use in our practice.

First collaboration: “The Way to Grow”

We started our collaboration with this company, barely 10-years old at the time, with a Brand Octagon positioning project. Their management, 30-something owner-founders and software creators, was looking to raise their profile and sharpen their image to gain competitive advantage in a very crowded field that included SAP. Rare for a technology company, they believed as much in their corporate brand as they did in their one software product.

Through a rigorous branding project involving management interviews, “Rising Star,” middle management workshops, and market “reality checks”, we helped this software company find their insight-based differentiation: all SMEs share a common, passionate quest to grow. While all competitors’ software, this company’s included, produced invoices and inventory registers for SMEs, true differentiation and relevance would source not just from excellent technology, but from the benefits, rational and emotional, that their software offered SMEs, viz., the ability to manage their own businesses more efficiently; to outdo their competition; and to better pursue their quests to prosper and grow their businesses in line with their greatest aspirations. The resultant tagline, “The Way to Grow,” captured the hearts and minds of this company as much as it did their SME customers’. The company fully understood that by providing “The Way to Grow,” helping SMEs in their quest to grow, they could become an integral partner in their SME-customers’ business success globally.

Management vigorously adopted “The Way to Grow” as their positioning in the marketplace and as their corporate signature. They made it the basis of their first advertising campaign and prominently announced it in their annual report. They painted it on the front door and put it on everyone’s business cards.

We trained up a team of 10 senior managers to take the brand story, two by two, to all of the company’s 30+ offices around the world. We accompanied them on their journey to the US and witnessed for ourselves the excitement the new brand positioning engendered in staff. The management’s goals were clear: everyone in the organization, from the receptionist to the CEO, every office, needed to be able to articulate the importance of “The Way to Grow” and express the brand’s Vision and Mission. Everyone needed to live its new Core Values. We created a brand book in support of the training.

A surprise development!

While we did not know this at the time, the company was looking to attract buyers with their newly burnished brand and were hopeful of launching a successful IPO; which eventually happened. Before this, however, just shortly after they had launched their new brand to their global audiences, to the surprise of many, ourselves included, they merged with their arch-rival! Located just down the road, this previously formidable competitor, that also offered only one major, highly similar product, was now part of the family. Perhaps predictably, merging proved a lot more difficult than anyone had anticipated. Staff was confused and a bit in shock as the cultures of the two rivals were very different; in an attempt to bring the companies together, the new management combined the names of the two companies into one new name – for a total of 15 letters! — which only added to confusion. Beyond the name, however, the financial community entered the fray and was quick to ask, What is the value for this merger? What is the use of two products in the same house when they both do the same things and monitor the same SME functions? Customers could reasonably ask, Which one should I buy? The sales force could reasonably ask, Which one should I sell?

Second collaboration: What’s the value for this merger?

We were called back to conduct a second Brand Octagon project, this one focusing on positioning and differentiating the two product brands within the new combined house. Success, in a word, meant sorting the overlaps in the new brand portfolio and rationalizing the M&A for the financial community. The format we recommended was a week-long workshop with five to six representatives each from the newly combined companies. We were genuinely uncertain what we would find, especially as the only product differences they could provide us were “simplicity” vs. “scalability.” This was backed up with impenetrable technical summaries and scary product specs: C/SIDE, SIFT, MS SQL, Oracle RDBMS.

Ingoing, we assure you, these terms meant absolutely nothing to us, humble brand consultants. We provide here a little more detail how we cracked the problem, in spite of ourselves.  It remains the clearest, most powerful example in my experience of how branding facilitates M&As and IPOs, and how branding is pure business strategy, point final.

How the solution emerged: Brand personality to the rescue

During the five-day workshop, the vibe was clearly one of “them” vs. “us.” Representatives of the two products sat on opposite sides of the table; they could agree to absolutely nothing. A breakthrough came only about mid-week, following a tense few days, and amazingly had nothing to do with technology; rather, it came down to brand personality exercises, mood boards, colors and metaphors. The two teams had gathered in separate rooms to create mood boards for their products –and what emerged spoke volumes. One product’s board was in landscape, with shades of blue and calm images of golf and boating. The other product’s board was in portrait, with reds and oranges and dominant images of bungee jumping, mountain climbing and racing across the desert. One product was cool and in control, the other was hot, fiery and uncontrolled. Needless to say, the two teams were genuinely surprised, even gob-smacked by these results. For the first time, and by total chance, these results, that were obtained completely independently and naturally, pointed to the real product differences: their brand personalities.

We were keen to explore these results further, using for the first time in this context a schema called 4Cs, or Cross-Cultural Consumer Characterizations.

This is a global psychographic segmentation scheme based on the goals, motivations and values of seven types of consumers in the world. (Based on this case, we have since come to apply 4Cs to all portfolio issues, with great success.) In terms of 4Cs segments, we found the two product brands to be entirely different. One was a classic Succeeder, a product about control, ease and simplicity whose users would appreciate this kind of simple, uncomplicated software. By comparison, the other product was an Explorer, a product about options, individuality and change, whose users would appreciate variety and hands-on problem solving. While both products produced invoices and in-stock tallies, we used these insights to clearly differentiate the products in ways that technology had not been able to do.

Net takeaway:

Far from frivolous, brand personality and psychographics are serious business. While all SME customers share a common quest to grow, they differ in how they appreciate the business software that will deliver this success: some want a simpler version their employees can easily, routinely access without deep training; others want a more involved version their employees can alter and tailor to their specific needs. The company’s original product is about streamlining processes and taking control while the new member of the family is about pursuing individual ambitions and exploring opportunities. Finally, they offer hugely different options to achieve the same results.

Another surprise development—and a further complication!

Just as the new company was about to launch this new brand, and its new, rationalized product brand portfolio, they were bought by a Fortune 15 company! Management openly credited the Brand Octagon projects for driving the purchase by helping raise their value above many other contenders. Proof positive: their brand positioning and their product portfolio were fully clear to the most discerning investors and buyers alike, and fully differentiated vs. a complicated and still highly competitive landscape. The products remain to this day within the Fortune 15. Perhaps predictably, however, this acquisition proved more complicated than had originally been anticipated. At issue: The new Fortune 15 owner already had two similar, SME-software products in its portfolio. So, little surprise, analysts were again quick to ask, What’s the value for this merger? If we know the two products from the original branding are different, how are they different from the current portfolio? And how are these two Fortune 15s different from one another? Is there room and value for all four?

Third collaboration: What’s the value for this M&A?

We were called back a third time in three years, this time by the Fortune 15 parent, to position all four products within the portfolio and to differentiate each from one another. The positioning and brand architecture that we proposed remain in use to this day.

We recommended the same 5-day workshop format, this time with five to six international representatives from the Fortune 15’s first two products as well as representatives of our original workshop. Although both products had been in the Fortune 15’s portfolio for some time, just as we had experienced in the first workshop, there was still palpable tension between the teams as it was again unclear what we would find. Would there be space and room sufficient for all four products? Ingoing, as before, we had no idea.

We replicated this workshop as much as possible, based on the first workshop of only about 17 months previous. Technology took us little forward and it was, happily, again, mood boards, metaphors and images that broke the code. We learned that the first of the Fortune 15’s products was “vanilla ice cream”, as straightforward and mainstream as the middle-west where it hails from and as open and transparent as the Great Plains for which it was named. The second product was named for Solomon the Wise, whose founders had created a company called TLB, standing for The Lord’s Business. This product proved to be more complicated: “an older BMW that runs well, but needs tinkering.” (Still in operation, but scheduled to be retired in 2024 after a long run, this product was always the least performant of the four, something we had clearly discerned through mood boards and metaphors, apart from its technological profile.) And how did participants see these products, “vanilla ice cream” and the ”BMW,” lining up against the first two software products? They clearly identified one as a “game of golf”, the other, “a wild stallion.” So, with relief, we could begin to see light between all four of them.

We continued to probe these metaphors with applications of 4Cs and psychographics. The “vanilla ice cream” is a classic Mainstreamer, the ultimate in simple, “plug and play” technology. The “older BMW” answers to a Reformer that, like its founders, is filled with integrity and good will, but requires individual commitment and resolve to deliver a final, fully authentic result. This leaves wide berth for the Succeeder and the Explorer product brands we originally discovered in the first workshop. All four products are different, all have a place and a role, to play in the portfolio, as they all still do in the Fortune 15, where they are referred to by the initials of their original names. What if we had uncovered, e.g., two Succeeders or two Mainstreamers in our workshop exploratories? As we did not, we are glad not to have to say, although doubtless, serious portfolio rationalizations and/or product-feature combinations would have been required.

Product brand personalities: further, deeper reflections post workshops

In hindsight, and upon further reflection, we began to understand there were even more powerful connections of brand personalities along the entire chain: products, their inventors, their buyers and their audiences. These connections are nothing short of amazing and blazing with insight. I’ve not seen these kinds of connections documented anywhere else.

Surely the first step in personality and psychographics is the inventor himself. (They were all men.) All young, the “wild stallion” inventor is an Explorer himself, while the team behind “the golf game” were themselves golf-playing Succeeders. “Vanilla ice cream,” as noted, is a mainline Mainstreamer from the middle of the US, while the “BMW” is the product of Reformers, who named their company for their strongly held religious beliefs and created a product that requires a certain intrinsic belief in it, and dedication and commitment to it.

While they were all looking to create software and technology that effectively deliver the same results, their personalities surely naturally shape what and how they will create. In other words, their personalities inform and stamp their creations. (Think artists or musicians, occupying similar milieux and yet providing totally different takes on same.) Then, there are the owner founders of SMEs, who have psychographic profiles of their own, and whose personalities tend to inform the cultures of the businesses they found. (Charles Handy has written extensively on this topic, see e.g., Gods of Management.) This includes their relationship with technology and the experience they want their employees to have in daily interface with technology.

So, there is a clear fil rouge from tech creator through their tech product to the tech buyer and finally to their tech users, based on personalities and psychographics, and the corporate cultures of the companies who choose one technology over the other. This leaves little doubt: brand personality is, and continues to be, serious business. It is high time these insights – amazing and blazing, indeed — be more broadly understood and applied.

Conclusions: What are the key takeaways?

To be perfectly frank, all three of these Cases we call A, B and C for strategic and proprietary reasons, came as a surprise to us. As we detailed, one company had tried and failed to find partners or buyers and sought to do so a second time with a stronger brand; which they accomplished for a “record purchase price.” Another needed to hone its portfolio to fit new business strategies and successfully (re-)sold its division back to original owners, also for a record price. Still a third was finding its way forward and endeavoured on three occasions in three years to “get it right.” The company, in all its iterations, remains a staple of its Fortune 15 parent, along with the three other product brands in the portfolio, all fully and further differentiated today, all still going gangbusters.

While all representing entirely different companies, markets and categories, the successes we detail share these things in common:

  • All required total buy-in of management to their brand, starting at the top, right from the start.
  • All required staying the course through the time it took to complete the branding projects–about three months for each, start to finish.
  • All committed to applying the results in their business, marketing, communications, and culture, their Brand Octagons hanging on their walls as inspiration, aspiration and validation of their efforts.
  • Well begun is half done. All credited their brands with delivering what they wanted and needed for their business to move forward: Vision, Mission, Positioning, Personality, Core Values; internal culture change, competitive clarity and differentiation; reputations for “best brand” vs. all others, head above the rest; get noticed, get liked, get bought.

It’s not just your products! It’s the emotional feel, connections, personalities, all entirely intangible, all the things we’ve been saying for all these years, folks. Believe us!

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