Salesforce.com has been at the center of a whirlwind of speculation, with rumors that Oracle, Microsoft, IBM, SAP or even Apple could be eyeing the cloud pioneer and giant as a potential acquisition target. After years of building one of the tech industry’s most celebrated and well-known brands, could Marc Benioff and co. really be considering handing over the reins?
So far, the rumors have remained just that — rumors — but even if an acquisition fails to materialize or simply doesn’t pan out, the speculation has undoubtedly raised some very interesting questions about what a post-acquisition Salesforce would look like, especially for branding strategists like me.
If we are indeed gearing up for an acquisition you can bet that the Salesforce leadership team has been embroiled in preparation. They’re likely considering all sorts of possible scenarios, questions, and details, from a sheer mountain of logistical planning to loftier strategic (and existential) concerns — like what is a buyer going to do with the Salesforce.com brand, its company culture, and the identity they worked so hard to create?
Setting the right expectations with any potential acquirer will obviously be key. In order to get everything out in the open, here are four basic questions Benioff (or you if you’re gearing up for M&A) should be considering.
1) How will the acquisition impact the brand’s future?
For a potential Salesforce deal, it could go either way, I think. The Salesforce brand is a force to be reckoned with, but so is Oracle, which has a history of renaming acquisitions rather quickly. Given the tumultuous relationship between Benioff and Oracle’s Larry Elision (not to mention the size of their egos) my guess is that question will be well thought out before any ink dries.
However, even if you’re not Benioff, you should think carefully about how any potential acquirer will sunset your brand (if at all), and how they will transfer its equity to their existing brand if they do.
When will they do it? How will they pay for it? If they are not going to change your brand, how do they plan to grow it in the years ahead? Make certain that your brand’s attributes are guarded in the short term and planned for in the long.
2) How will it impact your customers?
It’s crucial for any leader of a company involved in M&A activity to think carefully about how to communicate with customers. First, know their hot buttons and talk openly and honestly about how you will accommodate them. Your customers today are likely to be customers of your future ventures, so how you look after them now could impact how they treat you later.
3) How will it impact your employees?
If this culminates in a sale to Oracle, employee impact will be huge since Salesforce is filled with Oracle veterans with varying degrees of interest in returning (for the record, that was put “kindly.”)
Like all founders though, Bennioff should take into consideration the impact a deal will have on employees. In fact, the mere existence of these rumors is probably taking a toll on morale.
Post-close, think of how your employees’ association with your brand will be treated in their new world. Will there be a “we” vs. “they” mentality? What is the acquirer doing to ensure your employees are welcomed into the new organization and that they will stay engaged?
Like your customers, your employees may work with you again in the future. Make certain they will want to.
4) What is the messaging strategy?
Proper messaging is critical for any company undergoing a merger or acquisition, but stakes are ratcheted up a notch when you operate on the scale of a company like Salesforce. Then you throw in Benioff. His personal brand is nearly as sizable and very much synonymous with Salesforce, so he will want to make certain he is comfortable with how any potential acquirer plans to talk about him, the Salesforce brand, and its future before, during, and after the close.
Both the Salesforce and [Oracle/Microsoft/etc.] teams will want to think carefully about how they position the deal to both sets of their customers. You should, too, if you find yourself in an acquisition situation. Does the new company have a compelling message to keep employees engaged, happy, and providing great value to customers? How will they message against competitors’ advances?
Questions for Any Founder to Consider Before M&A
No matter how much we may fall back on “it’s just business” the truth is M&A deals are also highly personal. As emotional as strong brands are for clients, they are even more so for employees, especially their founders. For Benioff, an acquisition wouldn’t just be a business outcome; it would be a defining chapter in his legacy. What happens next for him is dependent entirely upon where he and Ellison are in their on-again-off-again relationship (if an acquisition by Oracle is indeed in the cards). Benioff could head out to his home in Hawaii, or, as Ben Kepes writes in Forbes, he actually may be the heir-apparent to the Oracle throne when Ellison retires. Stranger things have happened.
For those in a more typical acquirer/acquiree dynamic, here are some questions to consider: First, what does the future hold for you? Will you go with your brand to its new home? Or will you wave bon voyage to it from the startup pier? A lot of that will depend on what you want to do next. Although you of course do not need to plot out the rest of your entire life right this moment, it’s an important question to ponder at least.
Along the same lines, think about your mindset. Whether or not you become an employee of the acquiring company, one thing is clear: you will no longer be the final decision maker about the brand’s future. Are you ready for that? Remember, brands are emotional — by design — which makes them hard to walk away from. Can you detach yourself from what you have worked so hard to build over the years? It’s a really tough question that will require some true soul searching. In the long run, though, it will be worth it.
Even if you’re not Marc Benioff, if you’re selling a startup it’s crucial to take a step back and think about both the company and personal brand you’ve cultivated.
Photo by: Ken Yeung