September 19, 2011

When does a Newly-Merged Portfolio become a “Dysfunctional Family?”

There is always excitement and discomfort with change. Your portfolio of products or services may change gradually through organic growth or expand suddenly due to a merger or acquisition. There is a prayer you can manage portfolio change with care in the former case, but sudden growth always raises key challenges.

When Portfolios Merge
There is usually a sound business strategy behind a corporate merger. This could include expanding an identical product or service into an enlarged geographic footprint or expanding an array of products within the same general product category. The closer the add-on products are to the original, the easier it will be for company employees and customers (new and merged) to embrace the new products.

However, let’s consider the corporate combination (whether small or large scale) that introduces whole new categories of merchandise or service to the buying audiences of both former entities. Now HERE’s where internal AND external brand positioning mind-bending can occur.

Questions can start to creep in that could well affect the overall corporate brand, its place in the cosmos, its reason for being. This may sound overly dramatic, but altering a portfolio mix will have a direct functional impact on every level of the organization. Some might be minor, like adding a few pages to a catalogue or web site, or redrafting the organizational chart. But, unless strategic clarity is applied to the change, the rationale and subsequent merger execution could also never quite congeal with employees and customers.

Who Needs to Know What
WHY did this merger happen, to whom does it make the most sense, who benefits and how? A logical explanation must be given to all employee groups. And not just once, but as an ongoing reminder to sustain the pain of adjustment they will be enduring. You can simply call it vigilant internal communications, but, for it to be truly successful, it should really be a long term, internal MARKETING campaign. Nothing less than the integrity of the overall, master brand is at stake.

Certainly, external audiences, especially all current and potential customer groups, should receive clear and consistent messages about why these new products are now part of the corporation’s offering. It should be seen as a rationally expanding family group, with next to none of the externally visible dysfunction any newly-blended family inevitably experiences.

Going Forward
THEN, how you avoid purchase decision-making confusion or paralysis from that point on has a lot to do with how the portfolio is structured and how products are named. Pay close attention to what everything is called. If names need to change, allow adequate time for all involved to absorb and become familiar with the change. Blending companies is just as delicate a task as merging families… just a heck of a lot larger!

Contributed by Bev Brandt

Post a Comment

Your email address will not be published. Required fields are marked *