A good friend of mine and his wife recently went through some major life changes. They had twin baby boys, adopted a second rescue dog and both started new jobs — all of this in a roughly 5 month period. As the significance of these changes sank in, my friend looked at me over dinner one night and said “it is time for a life strategy reset.” A few weeks later, they had a new plan on where they would live, how they would commute, what kind of new capabilities they needed (think childcare) and they were moving fast to implement their new life strategy.

The need is similar for companies that are completing a single merger or a series of acquisitions. Even though the rationale behind the deal may be different company to company – something we call value drivers – our experience tells us one thing is constant: after a major merger or a series of acquisitions the executive team and board must refresh their corporate strategy and they need to do quickly. Here ‘s why…

1. A new company requires a new strategy

Mergers and acquisitions essentially create brand new companies. After a deal or series of deals, most, if not all, of the underlying logic on which the original strategy was based has shifted – often dramatically. The dawn following an evening of deal making casts a growing light on how the newly created company has been transformed from its previous self. New capabilities. New customers. New talent. Different competitors. A more complicated supply chain. An expanded set of partners. New assets (and often new liabilities). Suddenly, the SWOT analysis you reviewed at last year’s strategy offsite doesn’t look so accurate. All of this can be true regardless of deal size or the number of acquisitions completed. In our view, all deals should cause the “new” company to revisit the underlying strategic logic and reset the strategy going forward.

2. The need to turn a leadership group into a leadership team

In most merger and acquisition situations, the post-deal leadership team that ends up running the enterprise has at least a few new members added to the team. And “team” may be a strong word, since often the group that comes together has not yet had a chance to build trust and start truly operating as a team. The dynamics can be awkward for even the most seasoned executives. It is like the old M&A metaphor: the first few meetings between executives from merging companies can be likened to dogs meeting on the street for the first time – both situations are characterized by tentativeness, some anxiety, and a fair amount of sniffing. While some may opt for team building activities or casual dinners as the main path for building the new team, we believe there is no better way to solidify a new executive team than to focus on the challenges of developing a strategy for the new enterprise.

In-depth discussions on strategy – when properly framed and action oriented – can give the new executive team a sense of joint accomplishment while allowing time to learn how to best work together. Of course these kinds of strategy sessions are rarely easy. There is typically a high level of passion around the issue of strategy and opinions that are grounded in differing beliefs about priorities, and unique perspectives are varied and numerous. However – with disciplined structure around the process and the conversations themselves, leaders can have a terrific opportunity to learn about each other and how best to operate as a team as they get some much needed work done.

In the end, leaders in newly combined organizations can reap tremendous benefits – both emotional and economic – if they can build strategy discussions into the integration approach from the outset. Emotionally, the reward is reduced frustration for both employees and executives working on the deal. Economically, the benefit comes from accelerated synergies, higher profitability and a combined value that far exceeds what could have been achieved prior to integration.

For executives looking to address a strategy reset, click here to check out Metre22’s thoughts on how to ensure your strategy sessions are successful.

3. A new strategy can mark the integration finish line

Months and even years after a significant merger or series of acquisitions, there can be remnants of the legacy organizations that remain scattered throughout the newly created enterprise. And customers and employees will be quick to point them out as evidence that “we haven’t finished integrating.”  But who’s to say what it means to finish integration? Our experience at Metre22 is that the leadership team needs to define the integration finish line. Are we done when all employees are on the same benefits and comp platform? When systems transitions have begun? When real estate has been rationalized? The right set of criteria for defining “integration complete” can give leaders something to point to in declaring victory for employees, customers and investors. Moreover, including the unveiling of a new strategy as a criteria for crossing the integration finish line is a terrific way to communicate that it is time to move on from integration to optimization. Will there still be a few “frayed edges?” Certainly. But having a clear strategy will also help ensure that the businesses in the newly formed organization can address those quickly and start allowing all involved to look toward the future.