Brand reputation is everything to a business. Your brand is what everyone thinks when they hear your business name. It’s not only what they think, but also how they feel and, perhaps most importantly, what they do in reaction to your name and everything it embodies. Brand reputation is sacred, and a business’s actions must constantly strive to protect, enhance and develop it in line with a company’s ethos and core values. There are many internal and external factors that can influence and impact upon a brand, which must remain consistent and authentic to truly be, and remain, successful. One of those factors is the role a merger and acquisition (M&A) can play in brand reputation and the effect it can have on a company’s brand.
M&As are not new to the life sciences industry. In fact, some companies focus their entire business strategy on the preposition of buying a company to acquire new capabilities rather than building out from their existing business. Indeed, 2021 has proven to be a busy year when it comes to consolidation in the Clinical Research Organization (CRO) industry. For example, ICON plc acquired PRA Health Sciences, Inc., Veristat completed its SQN Clinical acquisition, and ERT and Bioclinica sealed the deal on a merger (recently announcing the new brand ‘Clario’). Meanwhile, IQVIA completed its acquisition of Q2 Diagnostics, and the dMed and Clinipace merger completed to create a differentiated mid-size CRO, to name but a few.
These are milestone shifts within the industry that are likely to cause some ripples as the market looks on to see how the companies will change. One of the burning questions on most people’s lips is what the respective business and brand will look like after an acquisition and/or merger, and how this impacts its position in the market.
The importance of brand authenticity
Perhaps the most fundamental aspect to get right during an M&A is a razor-sharp focus on ensuring your company story is established, from respecting its history and legacy, to reflecting future ambitions. It is then about bringing this story to life through a strong brand identity and personality that means as much to your customers as it does to your investors and employees. Brand is so much more than just the logo or expertly designed letterheads; all the individual elements of building a brand are hugely important.
Crafting your brand is not something to be taken lightly. There are multiple ways that brand architecture can be handled when going through M&A activity. The acquired company may be rolled into the existing company, losing its name, logo and potentially brand equity. There’s also the branded house strategy, which would see the new company and its capabilities being recognized as one brand, but with sub-brands using a logo or descriptor that is consistent yet nuanced. For the house of brands strategy, each sub-brand continues to operate independently and maintains their name, logo and brand equity, whilst sitting under a parent company (which may or may not be stated on their logo). A hybrid strategy combines both and has sub-brands sitting independently under a parent company whilst also leveraging the flagship brand. A merger between two companies could see an entirely new brand being launched.
Whatever the details of the M&A or resulting brand, authenticity remains critical. When deciding on brand architecture and brand impact during an M&A, the best way to move through this process is by conducting stakeholder research that creates a strong insights-led foundation. Qualitative research that captures internal and external perspectives, which is complemented by additional market research, such as competitor analysis, plays a fundamental role in not just establishing the new brand but embedding it too.
When it comes to creating a new or refreshed brand identity, personality and positioning, it’s important to remember that the company will need to stick with the decision for the long haul. So, the leadership team, guided by the marketing team, who make the decision must be able to stand by its post-M&A brand, defend it and truly believe in it. Shakespeare once said, “What’s in a name? That which we call a rose by any other name would smell as sweet.” By that, he meant that what matters is what something is, not what it is called. When applying that to the impact of an M&A on a brand, I would disagree. Following an M&A, the name of the new company is vital and will lay the foundation of the new brand and everything it stands for alongside its purpose and values. If I were to provide three recommendations for brand name creation it would be to make it meaningful, memorable and distinctive (it should be different from other companies that already exist in the space).
Brand culture – the role of employees
The role employees play in building the brand is essential following an M&A. When we think about the internal perspective of an M&A and the respective insights that can be gained, the employee role in brand building is vital for several reasons. Firstly, it ensures that the team creating the brand strategy understands the opinions of key stakeholders across all the legacy businesses. Secondly, it allows key stakeholders to have their say and feel like they are valued and being taken on the journey through change. It makes the journey about the employees as much as it is about the leadership, investors and customers.
Despite all stakeholders holding an equally important role in M&A branding, internal buy-in can be the difference between success and failure. Every employee within a business has the ability to build the brand or damage it. The new brand needs to be something that all employees truly believe in, something that motivates them to get out of bed and deliver their very best every single day. Brand values bring this to life – they should be meaningful, memorable and actionable (you may notice a trend emerging!). They need to be values that can be lived each day. They should be the bar that every employee must be able to jump over. If your employees can’t recite the company values by heart, and know how they personally act on them, there is a misalignment. Own them, live them, mean them. Culture is the key. There are various tools that you can use to ensure a successful internal activation and adaptation of a new brand as part of the brand launch following an M&A. Ultimately, if a new brand isn’t truly adopted and embraced internally, it will fall short externally.
Successful brand management during an M&A
In the pharmaceutical and life sciences industry specifically, we have seen varying levels of successful brand management over the years following an M&A. One of the first large mergers to occur in pharma took place in 2000 between Glaxo Wellcome plc and SmithKline Beecham, which resulted in the newly formed GlaxoSmithKline that gave a nod to both legacy companies. One instance of a novel name came more recently in October 2016, when IMS Health merged with Quintiles to form QuintilesIMS, which was subsequently renamed IQVIA. I worked for Quintiles at the time of the M&A and, for me, the name Quintiles holds a strong sense of familiarity but, crucially, I recognize the strength of the brand IQVIA, which speculatively combines the ‘I’ of IMS, the ‘Q ‘ of Quintiles and ‘VIA’ to represent the path of transformation.
In 2017, INC Research Holdings, Inc. and inVentiv Health, Inc. merged and was relaunched under a new brand of Syneos Health in 2018. More recently still, as ICON plc has gone through the acquisition of PRA Health Sciences, Inc. in 2021 , they decided to move all PRA capabilities under ICON. It has been interesting to see a slow, considered redirection of PRA brand equity to ICON, as captured in the very deliberate campaigns and transformative strapline; “Stronger together. The new ICON.” which also focused heavily on individual employees articulating their journey into the ‘new ICON’ on their LinkedIn profiles, and therefore externally demonstrating their commitment to the new brand.
It’s clear that an M&A, no matter what the nature of the takeover, merger or partnership is, can and does have a profound impact on a brand. The most challenging aspect around brand management during an M&A is that a brand is not a tangible asset, it’s not a financial resource that’s named on the balance sheet when an M&A process begins.
The absence of a carefully considered and effective brand strategy during an M&A process, however, can see the new company run into problems before it’s started. From the beginning of the process, the impact of the proposed M&A on a company’s brand must be discussed. Brand and marketing teams should be involved from the beginning and continue to be included throughout the M&A journey to ensure brand clarity. Only by acknowledging the strategic role of brand plays in an M&A can businesses safeguard the desired end result where employees, investors, leadership and customers of a newly formed or duly changed company are truly committed to a strong and powerful brand. A brand that’s entrenched within the culture and ethos of the company, from the very day it was conceived.
Laura Child is Head of Research and Strategy at ramarketing