About a year ago I was invited to speak at an annual ActionCoach event. The topic of my speech focused on the importance of maintaining brand value and integrity as a company scales.  At the end of my presentation, I was approached by the VP of marketing of a well-known and established accounting and business advisory firm.

It turned out that he was very intrigued by some of the things I was talking about and wanted to know if I could meet with him and a couple of the firm’s executives to discuss some concerns they had. So here the story goes. 

The original owner of the business retired and sold the business to two new owners a little more than a year ago. The new owners seemed friendly and competent, but no one knew too much about them other than that they both had an impressive track record of running strong and profitable companies. Over the course of the first several months of ownership, they become more and more polarized in terms of their ideas and thoughts on how to grow the business. 

Unfortunately, they didn’t think to turn their attention to the brand, what it stood for, and how its attributes contributed to the success of the company. The company was successful because of the brand! Had they considered the brand by spending time with employees and clients to understand it, decisions on how to grow the business would have been abundantly clear.

As the conflict was taking place and different people were getting different messages from the two owners, the entire culture changed for the worse, out of fear, because many of the employees began to question the sustainability of the company. 

Because of the conflict and indecision among the two owners, operationally everything stalled, and after a couple of months, employees, out of pure frustration, started doing their own “stuff,” like their own marketing (which wasn’t very good, and it was inconsistent) and hodgepodging their own systems as they saw fit. 

Even worse, a handful of people who had access to the back door of the company’s website started making unauthorized updates which created even more tension and conflict. And the owners weren’t paying attention.

As you would expect, respect for the new owners disappeared pretty quickly, and the situation continued to deteriorate to the point where some of the firm’s top producers were starting to resign, and they were even recruiting others to join them. 

And, of course, as you would expect, some of the firm’s clients followed the relationships they had with the CPAs and consultants which was really a punch in the gut to the firm. 

Over the course of the following twelve months, more people resigned despite the owner’s best efforts to retain them. There was a lot of “all talk, no action” which further eroded trust in the ownership team. 

The firm’s brand quickly became devalued in the eyes of candidates based on a growing reputation of being a place to avoid, thanks to glassdoor.com.

The firm was forced to downsize as they were unable to fill some of the vacant positions. Consequently, a culture of mediocrity took over and, as the saying goes, the inmates took control of the asylum. 

In the background, some of the firm’s competitors picked up on the scent of the wounded brand and went full throttle on a few offensive marketing tactics to inflict even more pain and run campaigns to convert their clients.

At the time I was meeting with these execs, the firm lost more than half its business and the owners have been silent.

It’s no surprise that I was unable to secure a meeting with the owners.

So, why did I feel the need to share this story? The reason is because I don’t believe enough thought and consideration is given to the brand and the culture of an organization during the merger and acquisition process. 

As many high-profile CEOs have said, culture trumps strategy.