How to market a marriage

Buyer beware! The general practice of involving marketing and sales executives only after a merger deal is concluded - when strategic goals and financial requirements are already resolved - runs the risk of inadequate assessment of growth potential and downside risk - both during merger implementation and in the longer term.

Buyer beware! The general practice of involving marketing and sales executives only after a merger deal is concluded – when strategic goals and financial requirements are already resolved – runs the risk of inadequate assessment of growth potential and downside risk – both during merger implementation and in the longer term.

Inclusion on the Merger Team

Increasingly, companies are merging to make the most of marketplace synergies, rather than to save money by downsizing. In these sorts of cases, with marketing and sales being the custodians of the organization’s consumer and customer strategies, their involvement is essential in accurately defining upside potential in the marketplace, and downside risk. Further, when they have time to properly plan, organize and staff for growth, the company can make the most of the all-important first 100 days following the merger.

The Costs of Delayed Inclusion

What can go wrong without early marketing and sales involvement?

Strategy – the initial merger strategy proves inadequate to deliver the growth objectives.

Organization – the marketing and sales functions are unprepared to meet the merger timing, and therefore unable to effectively develop and implement the launch plans.

People – the marketing and sales functions lack the critical capabilities to implement the marketplace growth strategies.

Achieving Merger Objectives

There are five critical roles for the marketing and sales functions in the execution of a successful merger or acquisition which are outlined in the recently-published Towers Perrin book: Making Mergers Work, pages 278 – 281.

1) Capture the merger’s value proposition

Marketing participation is essential in this initial marketplace assessment, as well as in the setting of goals consistent with the determined potential (by product, by channel, by geographic market, and by key customer or customer segment). Marketers can provide detailed analysis based on their marketplace knowledge and judgement.

2) Create the over-riding marketing/sales organization approach

Ideally, companies should define the marketing objectives for the merger in the pre-deal phase, before the potential and price of the deal are resolved. During the due diligence phase, they can redefine how various business functions will interact to deliver the consumer and customer proposition, and appoint senior functional managers.

Though it is tempting to defer this to the implementation planning phase, this seldom leaves sufficient time for effective marketing and sales organization design and staffing, let alone essential marketplace planning.

3) Resolve business processes for marketplace management

As soon as the deal is announced, following the due diligence phase, put a priority on assembling cross-functional teams, from both acquirer and acquired companies, to define the new business processes in marketplace management. This is vital to design the specific roles, structure and head count in marketing and sales.

It is important to redefine processes before determining roles and structure, and selecting staff. To do otherwise virtually guarantees that you will entrench old organization structures and capabilities, and base staffing on existing personnel. If you don’t seize the opportunity to create a new organization, with upgraded capabilities and more effective ways of working then, it will almost certainly not be addressed later.

4) Define HR requirements within marketing and sales

While marketing and sales should maintain ownership of the marketplace management processes and of the functional competencies for related positions, leave the broad vision of cross-functional role definitions to human resources.

5) Foster teamwork and build desired culture

This role is primarily corporate, but marketing and sales execs can define departmental values and beliefs, share management attitudes and opinions, and generally communicate the vision of the newly created organization and the sales/marketing arms.

These five roles are broadly sequential, although there is considerable overlap among them, and all have some degree of impact on all four phases of the merger process (from pre-deal to due diligence to integration planning to implementation).

A Vision of M&A Success

The case is strong for early involvement of the marketing and sales functions in the merger process, from the pre-deal phase on. Inevitably, as merger discussions escalate, they gather their own momentum, and carefully prepared plans often get ignored. However, with appropriate marketing and sales involvement there is greater probability of sound advance planning, and step-by-step implementation of marketplace launch programs. It should also result in faster attainment of the desired merger vision, and to quickly gaining competitive advantage.

John Southwell is a principal with Tandem, a Towers Perrin company, in Toronto. Tandem is a marketing and sales consultancy, which frequently advises clients on mergers and acquisitions. Southwell can be contacted via e-mail at alletsk@towers.com.