Synergy

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Synergy got mentioned a lot in my undergrad business school and I would love to say that it made a lot of sense to me and seemed a worthwhile use of my very limited life. But alas, it was just as vague and buzzwordy there as it is in most contexts.

Background

For those of you with the good fortune of not having heard this word, the generally-accepted definition of synergy is

when a combination of factors leads a partnership to be greater than the sum of its parts

I learned about synergy in my Corporate Strategy class, because synergy is the magical item on the accounting sheets that balances everything out when you’ve purchased a company for way more than the value of all its assets. The claim you’re making is that now that the your company and the acquired company are combined, the value of the acquired company is actually greater. That’s synergy, babey!

Now personally, I think Finance, Corporate Strategy, M&A, etc. are all witchcraft. Which is to say I respect their practitioners, but I do not understand it, am slightly fearful of it, and not totally sure it exists. The crazy thing is though, I do think synergy is real.

Anecdotal evidence

I’ve been in plenty of creative and productive teams and partnerships where the combination of personalities and skills elevates the work being done beyond summation of the skills present. It could be that this improvement is just a result of criticism from the team sharpening individual contributions. But even in groups where not a lot of time is spent on feedback, certain combinations of people just seem to boost everybody’s output.

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