News of mergers and acquisitions continue to dominate headlines as hospitals and health systems react to the ACA to improve clinical quality, build integrated delivery systems that cover the entire continuum of care and lower overall cost. In the face of a merger or acquisition, every decision is critical to the success of the future organization—from clinical integration and physician alignment to personnel and operational issues. Stress levels are high, and compromises will be made, but the goal is to come out the other end a stronger, better organization.

Crucial to the success of any merger or acquisition are the branding decisions to be made—oftentimes before you even reach the decision to merge or acquire, and certainly before you sit down at the negotiating table. Organizational culture can be the deciding factor in the choice of hospital or health system with which you merge—and that means anticipating the brand implications of the merger or acquisition early on in the process.

Unfortunately, branding is often a hard-fought, emotional battle between the individual hospitals involved in the merger or acquisition. There is no “one-size-fits-all” solution to brand identity. However, one thing is absolutely certain:

The brand identity cannot be a peace treaty!

Heading to the negotiating table with a laundry list of needs and demands cannot lead to concessions on brand identity. Armed with consumer research, doing what’s right for the brand in order to build future business success is what counts—even if it means not everyone gets his or her way.

Late last year, our Chief Strategy Officer Dan Miers blogged on the core principles for branding through transformation. Among the principles is the idea of leveraging the strengths each organization brings to the table. What is the equity of each brand in the new or expanding system? Which brand has the strongest assets—perceptually and operationally? If consumer data confirms that your organization leads in brand equity, you should express in advance what you offer from a brand perspective for the newly formed organization.

What if the shoe is on the other foot? What if you have the weaker brand in the system, but one still very beloved internally and locally? You must be honest with yourself (which often involves consumer research to guide you). Adding your brand name to another one is complex, and consumers won’t care to learn multiple names. But, if you do end up losing your brand name, know that no one we’ve ever talked to—consumer or hospital employee—has said they would quit using their local hospital if the name changed. In fact, if the local hospital gets a stronger brand out of the deal, consumers will be more likely to use the “new hospital.”

Before all is said and done, be sure that you understand where your brand fits (if at all) in the equation. Also, have a plan to communicate these changes to consumers. When changing your name, demonstrate how the change will make your hospital more valuable than before. Brand identity done right should lead to positive perceptions of the hospitals involved in the merger or acquisition.

Using the brand as a peace treaty to satisfy disgruntled parties at the M&A negotiating table is a mistake. Keep the big picture in mind, and remember that future success will partially depend on the strength of your brand. While a key part of this process means accounting for the opinions, beliefs and behaviors of a large and varied constituency, in the end the brand you build is not a peace treaty. Doing right by the brand gives consumers and potential employees a welcome “shortcut” to a decision—and more business for you.

 

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Patti Winegar

Patti Winegar

Managing Partner at SPM Marketing & Communications
With over two decades of experience at the world’s largest consumer agencies, Patti has helped build brands for Fortune 500 companies and complex healthcare organizations alike. Applying her unique insight, Patti helps clients reinvent, reinvigorate or rebuild their brands while guiding them through healthcare’s strategic business challenges and growth opportunities. Patti also spearheaded The SPM℠ American Health & Life Study, which adds greater impact to client campaigns.
Patti Winegar

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