Merger & acquisition series: Part 9/11 – Organize your portfolio
If you haven’t already, download our in-depth M&A playbook.
During any M&A, you will have to consider how to integrate and organize each party’s portfolio of offerings into one seamless brand experience. Multiple portfolios must be combined carefully in order to send the right message and communicate the right story about your brand. Nomenclature must be decided upon, and organization principles established. This all requires a thoughtful exercise in brand architecture—an often complex, but ultimately essential step in any M&A process. As arguably the most tangible presentation of what your new, combined organization does, and how it does it, it’s essential to get your architecture strategy right from the start.
At Monigle, we think this exercise is not only about your portfolio, but about humans, and it comes down to moving people to and within your brand. The new structure will determine how people see, experience and understand what has changed, and will become a key proof point in the bigger story you are telling. It sends your audiences a direct, experiential message about what kind of brand you are, and what kind of solutions, products, or services you offer. With that in mind, it’s clear why your portfolio must align with what you do and what role you want to play. Viewing this exercise as purely a simplification or clean-up job will completely undermine the potential of a user experience-based architecture strategy.
Architecture can be intimidating, and not without reason: it’s often the most complicated and political stage in any major M&A rebrand. However, there are some key steps you can take to make the process successful from the get-go. Here’s how we recommend getting started:
1. Connect to the vision
The first step in diving into your M&A rebrand architecture is actually stepping back. You need to start with a vision of the full picture and future direction before getting into the details. Your brand architecture is the most tangible representation of the company you are and want to be, so you first must understand the overarching strategic goals of the M&A and the type of company you are building toward.
Are you trying to move from a product company to a solutions company? From hardware to IT? From regional to national/global? Are you trying to break into new markets or audience segments? Each of these strategic decisions that drove the M&A all have very clear and direct implications on your architecture strategy – whether you unify or build distinct brands, how you organize the portfolio, even your nomenclature strategy. Ensure everyone on your team, including leadership, is on board and aligned with the new story and new role you are playing in your audience’s lives. A successful architecture strategy starts with connecting directly to the vision of the combined organization.
2. Focus on the customer experience
You have probably noticed a theme throughout this M&A series, and that is a human-centric focus. Architecture is often viewed as an exercise in simplification and efficiency, but the most successful architectures are focused on experience. Architecture is no longer about managing identities, it’s about moving people through experiences. Your architecture should:
- Attract: Create a compelling connection to your audience’s needs
- Understand: Clearly define the breadth and depth of the offering to prove alignment with the audience need
- Fulfill: Meet the audience’s core need and delight beyond expectation
- Maximize: Grow customer value by expanding the relationship
This is why segmentation and personas are extremely valuable when defining your architecture strategy. Slip into your audience’s shoes and think about your brand architecture as a journey. Key steps in that journey (including how, when and why people find your brand, what factors they consider when making decisions, and how they engage with and experience different touchpoints) can help you organize your portfolio in a way that is most intuitive, meaningful and effective to the audiences who matter to your brand. Use your personas to walk through a journey to see what it’s like to engage with you so you can feel first-hand the potential complexities and inconsistencies. And this isn’t just about products and services, you need to consider your various businesses and other entities, how things are showing up on social and in signage. Harnessing the power of customer experience will ensure your architecture is a catalyst for attracting new customers, facilitating cross-selling, and driving advocacy.
3. Know what you’re working with
It’s time to dive into the details. At Monigle, we like to get in a room (or a Zoom) and put everything on the table before we begin organizing, adjusting, streamlining or combining. Yes, we mean putting together a comprehensive, all-inclusive list of every single service, offering, solution and touchpoint offered by your brands. Then, use this info to map out a current state of each brand architecture so you can fully understand the different approaches and philosophies that led up to this point, and where the opportunities and challenges lie. We often use programs (even PowerPoint) to write the names of offerings on squares that you can easily move around to explore and test future scenarios.
4. Decide whether you are building or transforming
When going through a portfolio reorganization process, you will want to stay focused on optimizing and rationalizing. Make sure you are creating efficiencies, eliminating redundancies, and bringing everything together under one common purpose and idea. When going through this exercise, you may realize that your M&A is accomplishing one of two things: building on current offerings, or transforming your brand into a new solution entirely. Each provide some unique considerations for your architecture decision-making.
If you are building… If your M&A goals are focused on adding to and expanding your current services and offerings, you may be building. In this case, you may be incorporating new products or offerings to grow your services, but your core purpose and organizational goals as a combined brand will likely remain similar to what they were as independent entities. In this case, focus on optimizing and filling in the gaps.
If you are transforming… Some M&A rebrands go further than just growing your portfolio—they actually transform it. In this case, your offerings may be expanding and changing so drastically that you are actually becoming a new kind of organization entirely. In this case, you will likely have to completely rethink the foundation of how you organize, sell and present your products or services. This large-scale transformation should be clearly established and captured in your new brand strategy, so remember to reference your new, shared purpose as a way to stay aligned with future goals.
5. Let data drive decisions
As we’ve mentioned previously, using data to reduce subjectivity can be extremely helpful during M&A rebrand exercises, and architecture is no exception. As architecture is a major representation and embodiment of “how things have always been done”, even minor changes to your organization’s strategy can cause an emotional, political reaction. Using data to back-up decisions and support reorganization can help temper emotions and remind everyone involved that you are all working towards the same mission. Data can be used to help inform decisions (e.g., brand awareness and equity) as well as test hypotheses and potential models. Arming yourself with data and a clear picture of how architecture decisions support the overall business vision will help minimize the more subjective and political discussions that you often encounter when dealing with architecture.
Learn More: Using Data to Reduce Subjectivity During an M&A
6. Explore immediate innovation opportunities
Too often companies focus on integrating portfolios of existing products, missing easy opportunities to explore how that integration might lead to something new. We often recommend running cross-departmental workshops with different business unit leaders to better learn about each other’s portfolios and how they might combine together to create something new. Especially in larger, complex organizations, it isn’t uncommon for teams to not even know what other business units do. In these sessions, it is exciting to see these new relationships form and new ideas start to flow that can lead to significant new revenue streams, just by bringing people together.
This is also a great time to do a portfolio gap analysis to identify future innovation opportunities. Do you have all the offerings and capabilities to deliver on the vision? Or are there clear gaps to fill in the portfolio to live up to the vision?
7. Develop migration plans
Once you have aligned on the ideal architecture strategy, you have to define the best way to get there. The biggest challenge we typically see with clients is relying too much on a ‘do no harm’ mentality and dragging out the migration, or adopting a long, phased approach. Phased approaches can be expensive, as you basically have to rebrand multiple times, and can actually be more complex and confusing to customers. More often than not, it is better to just rip the band-aid off and get to the end state as quickly as possible. Customers are smart and understand that rebrands and name changes happen all the time, so as long as you have a strong communications plan and bring people along the journey you should be fine.
That said, there are times when a more phased approach is better, for example if data proves there is a significant amount of equity that we can’t afford to lose. Or perhaps there is a new market or audience that would be a stretch area for the overarching brand, and you need to migrate over time to transition equity and build credibility in a new space.
Regardless of the approach, it is critical to spend the appropriate amount of time up front planning the migration and communication. M&A’s are a unique opportunity to engage with current and new audiences in a big way, and your new architecture strategy will be one of your biggest signals of change and commitment to the vision.
It’s true that reorganizing brand architecture can be a complex undertaking, but the benefits are vast. Internally, an optimized brand architecture strategy will create efficiencies, eliminate redundancies, while ensuring employees are rallied around organizational goals. Externally, it can improve experiences, drive deeper relationships with your current and future audiences, and simplify the consumer journey in meaningful ways. For these reasons and more, it pays off to take the time to be thorough and thoughtful when going through this stage of your M&A rebrand process.
At the end of the day, architecture is a human exercise and a major opportunity to create a more seamless and indispensable experience for the people you serve. For more information and tips on how to create your new brand experience, stay tuned for the next piece in our M&A rebrand series. And in the meantime, as always, feel free to reach out with any questions—we’re always up for a good architecture conversation!