More Than a Fresh Coat of Paint: What “Rebranding” Actually Means
Read through any business or financial publication, and you’ll see dozens of headlines that have to do with mergers, acquisitions, and buyouts. It seems as if, every day, a one-billion-dollar enterprise is being purchased by another.
But what happens behind the scenes of these buyouts? Is it nothing more than a name change resulting from powerful people trading companies like baseball cards? Or, is there more going on beneath the surface?
What Happens When a Company Is Bought?
Companies are usually purchased for one of two reasons. First, the company is performing well, and the current owner wants a nice payday that’ll let them take early retirement/pursue their next ventures. In turn, the purchasing company wants to merge with a competitor or add a new division to their corporation. These types of acquisitions are very common and often publicised, such as when Facebook acquired Instagram and WhatsApp. These purchases typically feature some sort of restructuring to help the company fit the parent corporation’s mold and mission. But drastic changes aren’t typically to be expected.
The second reason is that the company is in financial trouble or experiencing leadership woes and needs help. In that case, the company that does the purchasing recognises the good parts of a company in trouble and steps in to bring fresh ideas and resources to help it shine. For example, Skybound Capital acquired Guardian Wealth Management for this very purpose — Guardian had a great history and potential but simply needed a new direction.
Restructuring Under New Leadership
Once the deal is done, new leadership teams are appointed who work to bring positive changes to company culture, management, and bottom lines. Often, this involves shifting resources and manpower, changing the company’s structure to work more efficiently as a cog in the larger corporation. When this is done well, a buyout is much more than a fresh coat of paint — it’s a complete reinvigoration for that company.
Commitment to New Values
With a new regime comes new values. The company that has been purchased needs to realign its vision and mission statement to fit its parent corporation. This, in good situations, results in a company that unites around what matters most — serving clients and customers. Values (or the lack of them) are what set the world’s best companies apart from the rest. When everyone shares the same values, the company functions as a team and stands a much higher chance of success.
What a Buyout Means for Employees
If you’re working for a company that’s recently been purchased by a larger corporation or group, you can likely sense the anxiety around the office. People are wondering what will change and whether or not those changes will be for the better. Sometimes, the changes are pretty negative — layoffs, cutbacks, and restructuring can be hard to bear.
In a well-run acquisition or merger, though, new leadership should be welcomed with open arms. A new group of people in the C-suite can address issues that old leadership couldn’t (or didn’t want to) see. You will have a chance to provide feedback about your job, the company, and things you would like to see changed. This means they can help employees increase their productivity and satisfaction in their jobs. Only in rare cases does a buyout result in lower employee satisfaction after the dust settles.
What a Buyout Means for Customers and Clients
If you’re a loyal customer or long-term client of a company that has recently been bought out, you likely have your own concerns. What does this new regime mean for you — is it business as usual? Or, are all the things you loved about that company going to slowly disappear, replaced by products and services you’re not interested in? The reality is, you have no control over whether the company you’re connected to will change in ways that you approve of.
If you have a lot riding on the company that’s rebranding, you have more to worry about than a logo change. Having your money tied up in a company with an uncertain future can be quite nerve-wracking. If you are concerned about what direction the company will take, post-acquisition, research the buying company’s history and mission as early as you can. Try to learn about their values and reputation; if they don’t line up with your needs, you can back out of your partnership or patronage before it’s too late.
When a buyout goes the right way, however, you’ll be more than happy to stick with them. The world’s best companies know that serving their customers and clients is crucial to success. That means that you should be benefiting from a buyout as much as anyone! The money you’ve invested in that company, whether through buying products, services, or investments, will be better spent.
So, what’s in a rebrand? A new logo, yes, but much more than that. When a buyout goes the right way, a company gets new life in the form of better leadership, more efficient operations, and more effective products/services. If you’re part of a company that’s about to be bought or just a longtime patron, watching the acquisition take place can cause anxiety. However, you can trust that when a buyout goes the right way, things get better for everyone involved!