Identity Issues: Why Brand Can’t Be Ignored During Corporate Break-Ups
Restructuring of any kind is never easy, but brand can make the transition a lot smoother.
Wall Street is buzzing with the recent announcement that Dow Chemical and DuPont have agreed to merge. The deal fuses two of the oldest companies in the US into a chemical behemoth that will likely reshape the chemical and agricultural industries. In a restructuring twist, the companies have said they will ultimately split into three separate businesses in an effort to create greater value for shareholders amid weakening commodity prices.
Breaking Up Is Hard To Do
While the merger (and subsequent break-up) seems like a home run for investors, the implications from a brand perspective are less clear. Restructuring of any kind is never easy. In the case of the Dow Chemical and DuPont deal, the creation of three new publicly traded entities is a huge change, one that may generate more questions than answers. This is especially true for employees and clients who will want to immediately understand what this restructuring means for them.
From a corporate perspective, the focus will initially be on who gets to keep what. Assets are broken up in what is too often a chaotic and emotional process. When the dust settles, issues arise that are not so easy to solve. In the past, as part of a larger entity, the new company’s identity largely came from the corporate brand. Now, the new entity must figure out what part of the past to move forward with, how to make up for what is left behind and what should be completely new.
As publicly traded companies, they will face intense scrutiny from the beginning – not only from clients and employees, but from investors and the media as well. That’s a lot to handle all at once. Without a clear and consistently communicated vision and value proposition – in other words, without a brand – it will be hard to rally these stakeholders.
Same, Same, But Different
And therein lies the true challenge, and opportunity, of any corporate break-up: same business, same people, different story. The change in business strategy that comes with any major restructuring is really just the first step. When business strategy changes, so too must the brand. Only when the two are aligned can a company realize its true growth potential.
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