FEATURE | INSPIRATION: CORPORATE IDENTITY IN THE AGE OF MERGERS AND ELECTRONIC MEDIA
In a business climate characterized by a record number of mergers and acquisitions and the lightning pace of electronic technology — not to mention an economic slowdown — today's corporate identity professionals face some daunting strategic and design challenges as well as some exciting opportunities.
It will come as no surprise that more corporations
changed names last year than ever before, with nearly 4,000 businesses around the
world—including 2,976 in the United States—adopting new names.
The number of mergers and acquisitions also broke all records in the millennium year with
a staggering 9,500 transactions in the United States alone.
It is also no secret to anyone in the design community that the growing penetration of electronic
media has expanded the visual requirements for corporate identity into cross-media solutions
that account for print, display, and the web.
Designers say they are responding to the challenges posed by these changes with the same focus on disciplined steps and good communication that have always formed the backbone of strong corporate identity.
Steff Geissbuhler, a partner and principal at the venerable New York graphic design firm of Chermayeff & Geismar which has been described as helping to "invent the entire category" of corporate identity, argues that in this day and age working through the process and gaining consensus poses unique challenges for designers whose clients are undergoing an identity change. Especially when companies merge.
Geissbuhler notes that many of these deals unite companies with unrelated, often intangible products
and services. "The merger of two companies always puts strange bedfellows together," he
says, adding, "You know you can create an identity for a shoemaker. You have all kinds of symbols
at your disposal: the hide, the leather, a foot or a shoe. But when you have companies that are
abstractions, there is nowhere that you (as a designer) can hang your hat." Geissbuhler faced this
challenge when working with Norlin Corporation, a company that made technology instruments for
electronics, and for the tool and die industries; measurement instruments; musical instruments... and beer.
Sometimes the product may be clearly focused, but merging organizations are beset with internal bickering over the handling of their new identity. Such was the case when Malcolm Grear, principal of Malcolm Grear Designers, based in Providence, Rhode Island, developed the new identity when the Northern and Southern branches of the Presbyterian Church came together for the first time in 122 years.
Grear approached the situation by creating a
completely new visual identity for the Presbyterian Church USA that resonates with the rich history of
both branches without using the previous images of either. The secret to his success here:
"Sometimes the designer must be part peacemaker and part politician to help the client arrive
at a consensus."
More Merger Mania
Grear says that "merger mania" has brought his firm more design commissions, but has
not changed the process by which he approaches his work. He explains, "We still follow our
normal process of conducting indepth studies of the audiences, the competitors, where the organization
hopes to be in 10 years, and the tools needed to get there."
Kyla Lange Hart agrees that working with clients who have undergone restructuring demands a fresh examination of how this new corporate entity will communicate. Hart, who is principal of New York-based Toniq, a brand strategy firm, tells clients that this is "a glorious opportunity" to create something new; to shed their baggage and take the best of what they are and re-emerge.
Her firm works with clients prior to the design
phase to help develop a communications platform from which the new identity will emerge. She describes
the process that she takes as a powerful team-building tool centered around bringing different management
groups together to envision what the new company looks like. "At this juncture, it is very important
to synthesize a myriad of opinions and points of view," she explains. "We have developed a
series of group and one-on-one exercises that use visual and verbal stimuli to engage management,
promote dialogue and gain consensus. This process is stimulating, provocative and insightful. As we
bring histories together, a new voice emerges."
Fresh Canvas
The opportunity to play a role in the emergence of a
new corporate identity is one of the most rewarding assignments a designer can take on, maintains
Rick Bonelli, principal of Sunspots Creative, based in Hoboken, New Jersey. "It's as if you're
starting with a fresh canvas," he says. However, when a client wants to combine existing logos
and identities, it's another story. This, he notes, is a difficult and sensitive process.
Scott Mikus of Crawford/Mikus Design in Atlanta, Georgia, agrees with Bonelli that combining logos and identities is always difficult, especially following a merger where the new partners are jockeying for position. "Combining identities often confuses and muddies the communication process," he says, adding that it can be challenging to manage two marketing teams who are wrestling with key issues such as how much equity of each company's identity is brought forward? Mikus feels that it's easier to develop a new identity following an acquisition than a merger because the dominance question has been resolved.
Regardless of the scenario, Mikus boils the issue
down to this: "If the corporate identity needs to reflect a new direction, then a new identity is in
order. However, if it is intended to broaden a company's offerings, and one or both of the companies
have a strong market presence, it can make sense to incorporate elements from each in a new identity
or update the dominant identity."
No Rationale
Today's corporations sometimes change their identities even when the complete rationale for doing
so isn't always evident. A change in brand strategy and a management shakeup at the helm are two
of the more often seen reasons for identity changes, both of which were cited in the well-publicized
demise of the Time Warner mark. That much-heralded image of the eye/ear, created by Steff
Geissbuhler, was in use for just three years when, in 1993, new Time Warner chairman and
CEO Gerald Levin replaced it with a logo that consisted simply of the name framed by two lines.
Geissbuhler, who
was taken completely aback when his client unveiled the new logo at its annual shareholders meeting,
received the following explanation from Time Warner: "The symbol you designed is so strong that
it is hard to make it work with other divisional symbols."
"I felt terrible about that," Geissbuhler admits. He feels it was one of his best marks. His take on the situation is that Levin was trying to stake out his territory and wanted a logo that reflected his personal taste. The incident raised for Geissbuhler some fundamental questions that must be asked by all designers in this change-driven climate: Aren't we creating identities to endure the test of time? Or are we lucky nowadays if a trademark or logo survives a couple of years in this corporate world of hostile takeovers, mergers, acquisitions, and management changes?
Despite these musings, the fact remains that many of the marks designed by Chermayeff & Geismar have withstood the test of time, among them the groundbreaking logo for Chase Manhattan Bank. Chase's logo is included in a recently published collection of trademarks by the firm. TM: Trademarks Designed By Chermayeff & Geismar, published by Princeton Architectural Press, is a visual retrospective of 200 identities created over the firm's 40-year existence, including marks for Mobil, Alvin Ailey American Dance Theater, New York Public Library and Xerox Corporation.
Rockefeller And Chase
With financial
institutions - including commercial banks, thrifts, investment banks, brokerage and mutual funds -
accounting for the highest percentage (40%) of identity changes last year, it's worth noting that the
Chase logo, still in use today, was one of the firm's first trademarks.
This mark broke new ground, explains Geissbuhler, because it reflected a real change in a bank's self-perception and public persona. "It was a shift from what all banks had on their letterhead, which was just the name, address and phone number - no imagery whatsoever - to conveying an essence of what the bank was all about; a symbol of culture and strength."
What propelled the sea of change in identity
was the leadership of then Bank President and later Vice President of the United States Nelson
Rockefeller. Despite the opposition of the Bank's board of directors, Rockefeller saw the
image-building potential of adopting a trademark. Geissbuhler maintains that this
"top-to-top" connection was and still is the only way that a designer can create a
mark that embodies the organization's true identity.
And yet listening to the chairman's wish list is just one of a disciplined series of steps his firm uses to guide the development of a corporate identity. In TM, Ivan Chermayeff and Tom Geismar, along with partner Geissbuhler, stress the importance of asking what makes their client unique: "Like a detective or archaeologist, the designer must listen, observe, and search for clues to the core character of the organization. Asking the right questions, of the right people, at the right time, is the key to defining appropriate criteria for the mark."
In their analysis, these trademark veterans maintain that a well-grounded strategic process is all the more critical as technology continues to become a more dominant form of visual communication: ... "as animation becomes more widespread, and as technology makes it easier for designers to develop, test, distribute, and implement more complex imagery, trademarks and identity systems too will evolve. They will take advantage of the new technologies and the continually expanding use of colors and movement in our evolving multimedia world."
Internet Influence
The internet has become such a force
in the economy that designers everywhere are feeling its impact with new opportunities and
challenges. One of these challenges is the adaptability of identity systems and trademarks created
for print, to corporate web sites. Some marks work and some don't, but according to Geissbuhler the
real problem occurs when clients let superficial design language drive decisions about their identity.
"The web site all of a sudden becomes almighty because it's out there, it's everywhere, and it's
seen," he notes.
Geissbuhler did a logo for National Public Radio (NPR), a mark which he felt really captured the varied offerings of NPR's programming, that was redesigned by web designers who said it wouldn't translate to the internet. The resulting image, lowercase letters in squares, "lost a lot of character, a lot of meaning," he believes.
Designers now have to think in multiple mediums when developing corporate identity systems, points out Scott Mikus. "It's critical to the success of any identity work to discuss usage, applications and mediums before developing any creative," he states. "For example, the identity for SCB Computer Technologies, designed by Elizabeth Crawford, was a rebranding of the company identity and collateral. Since the corporate logo had gained considerable market presence over the years, it was left as is. The color was changed to support the rebranding. All materials were created simultaneously for the web."
Rick Bonelli agrees.
The internet is a major consideration in his work because most of his clients
either have a web site or plan to launch one soon. In designing for the web, one of the key issues that
he has wrestled with is the conversion of color. In fact, he had a recent experience with a strictly
web-based client (ironically enough) he renamed Etrana, short for e-transactions, where concern arose
because the red in the client's letterhead couldn't be duplicated on their web site. "With some give
and take, we got very close to everyone's satisfaction," he says. "It was a good lesson to learn
when designing for web-based companies and working with web programmers not completely familiar
with print production."
Along with its challenges, the electronic media has spawned some exciting opportunities, as noted by Chermayeff, Geismar and Geissbuhler in TM. Kyla Lange Hart believes that the influence of technology has allowed corporate identity to become more playful. "The internet has given corporate identity creative license. Logos are no longer idle; they jump, pop, bounce and enjoy sound. There is much more color and life," she says.
Past Is Present
The darker side of web identity design may be found in the proliferation of trendy logos that appear to
lack a strong strategic foundation. Malcolm Grear is concerned that the world is being bombarded with
what he calls "swoosh" designs - or Nike-esque marks utilizing arcs - because their owners
are trying to position themselves as forward thinking. "It's a grave mistake to shortchange solid
design development for what is sure to be a throwaway corporate identity," says Grear.
With all the challenges and opportunities for corporate identity pros in today's frenzied business climate, the message seems clear. Designers and communication professionals need to carry forth the lessons of the past - maintaining the kind of disciplined approach that created those timeless marks for Chase and Mobil - while they embrace the current climate with a measure of flexibility and enthusiasm.
STUDY: COMMUNICATE IDENTITY IN MERGER ANNOUNCEMENT
A recent study on M&A branding, by pioneer identity and image management firm Lippincott & Margulies, reveals that nearly one out of four companies do not unveil the combined entity's name during the merger announcement. The Lippincott & Margulies study, which analyzed the 100 largest international M&A's over the last ten years, found that 24% of companies did not divulge their new name or identity during the initial merger announcement - a time when the identity can make the strongest impact.
Analysis shows that M&A announcements typically reach the front page or front page of business sections of major papers and are widely covered in news magazines and television news. In U.S. print publications alone (in the first two days of newspaper coverage and the first three weeks of business magazine coverage), the AOL-Time Warner merger netted an advertising equivalency of $121 million, Pfizer-Warner Lambert netted $12.5 million and the United-US Airways merger netted $5.5 million in free advertising. Ad equivalency is the amount it would cost for a company to purchase ads of comparable length and placement.
"If companies do not come out-of-the-box strong with a name and strategic brand strategy at the time of the merger announcement, stakeholders will be confused and the company misses out on its moment in the media spotlight," comments Suzanne Hogan, senior partner, Lippincott & Margulies. "The next M&A will be announced within 24 hours and the followup story on your new identity gets buried on page C38."
Unlike M&A announcements, followup media coverage on new identities usually secures minor, back-of-the-book coverage. One example showed hundreds of major hits in a two-day period surrounding the merger, but only dozens of minor stories covering the new name. "It's like having a baby and not naming it until it's a year old - and then naming it John Doe. It's both anticlimactic and a squandered opportunity," says Hogan.
Stakeholders' first impressions of a potential merger or acquisition are hard to change and the most obvious brand implication of a merger involves the name and identity of the combined entity.
The Lippincott & Margulies study further found that 67% of mergers retained the name of one of the companies to extend the strong equity of one brand to the other (i.e., Vodafone AirTouch and Mannesmann becoming Vodafone AirTouch). Twenty-four percent used a combined name to leverage the strengths of two powerful brands (i.e., BP Amoco). Only 8% of companies created a new name, signaling a break from the past and a true "merger of equals" (i.e., Rhone-Poulenc and Hoechst becoming Aventis).
According to Lippincott & Margulies officials, there are a few key steps to take to ensure a successful M&A announcement:
- Capitalize on your moment in the sun. Use every ounce of press coverage to your advantage. Leverage the $5M-$120M coverage you may receive in support of the new identity.
- Elevate identity and brand strategy to the due diligence process. Brand issues are often not addressed until after the deal is done. There are reasons to elevate its status to the due diligence process. Waiting until the end can often result in an impromptu and inappropriate decision. Without a concrete plan, "brand" issues can become one of the final playing cards in the deal or an afterthought.
- Communicate, communicate, communicate. Prepare your announcement in a way that won't leave anything up to interpretation. If you don't shape the whole story, others will shape it for you. Deal makers often focus on shaping Wall Street perceptions. Albeit important, Wall Street will focus on soundness of the strategic intent.
But research shows that most mergers and acquisitions do not result in greater total value to shareholders than the original two entities, and that most failures are due to lack of a sound integration plan. Make the integration strategy part of your communication plan.
- Do not forget that Wall Street is not the only audience watching. Customers and employees are intent on the real story and the greatest risk a newly organized company faces is mass exodus of key talent and customers. Furthermore, don't forget "peripheral" audiences that can dampen your license to operate — regulatory bodies, special interest groups, competitors. Keep them in mind while forming your communication strategy.
- Establish a two-way communication mechanism and be proactive in addressing audience concerns and expectations. Don't just send information, seek it. Research with key audiences is critical. A quick hit, qualitative dialogue with these audiences can reduce the "exodus risk" and provide a reason to continue communication with customers and employees. Ongoing communication is an important success factor.
- Realize the role identity can play in shaping audiences' perceptions. A company's approach to its new identity sends a variety of signals to key audiences - signals that management may or may not intend. Remember that your intended identity sends subtle messages about who's in charge, where the business is headed and how well management has thought through these issues prior to the deal.