Does Synergy Exist?

from the good-question dept

Last week we had an article about how no big technology mergers had ever succeeded. Now, the Washington Post has an article saying that large media mergers always seem to fail. They go into a bit more detail, quoting a number of people saying that there’s simply no such thing as “synergy”. Many of these media mergers talk about leveraging multiple brands across each other and doing other synergistic things. With all the problems those companies are having, it’s easy to jump to the conclusion that synergy simply doesn’t exist. I don’t buy it, however. Synergy certainly can exist, and it’s fairly easy to think of ways to leverage brands across each other. What’s difficult is actually executing on a synergistic strategy, because while it may be good for the entire company, it tends to be painful to the parts involved (at least initially). So, everyone resists the synergistic moves, and companies end up spending more of their time and money fighting the very synergy they were trying to reach.

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Comments on “Does Synergy Exist?”

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steve snyder says:

Synergies in large corps?

The truth is, large corporations that succeed do so in spite of themselves. As an organization gets larger and larger, it becomes less efficient and less productive. Every size increase adds a layer of waste–slacker employees, poor policies, bad management. The more managers there are, the more bad managers there are. Think of the negative impact on a company of just one bad manager–most of his/her employees are unproductive, others throughout the organization who have to work with them are less productive and it snowballs. The way corporations work is to take some one who is good at what they do, and promote them until they fail–and despite their failure there are pressures to keep them in that spot (the person who promoted them would have to admit he was wrong) so that’s where they stay.

I believe very much in synergy between people. And even between smaller companies that are driven by the people. But in large companies it’s the processes that drive the company, not the people. So in mergers of large companies, synergies are difficult if not impossible to realize.

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