Synergy is the popular buzzword across Corporate corridors and any task oriented groups for enhancing performance levels. By simple definition, it denotes the interactions or the joint efforts of two or more entities to produce a combined effect greater than the sum of their separate effects. The potential abilities of the individual groups can have a multiplier effect by working together, synchronizing their applications towards the set objectives. The different participants contribute to the common goals in an atmosphere of cooperative interactions. Synergy is not out of mere teamwork or harmonious working but it is achieved through combining skills and talents in such a manner as to effectively contribute to the goals with optimal resources and focused efforts. Building team synergy itself is a complex process where the emphasis is on creating a value structure for meeting the targets by aligning skillsets to performance needs.
Team Synergy springs from the idea that the whole is greater than the sum of its parts. This is teamwork with a different perspective. Just putting together a cross functional team does not guarantee desired results, despite the huge talent quotient. Evolving the team is a unique task by itself which requires assessing talent needs, skill mapping, process formulation and choosing skills to combine effectively. In fact, diverse teams with varied backgrounds and experiences work better by merging their techniques to achieve tremendous results by unleashing innate potential for higher levels of collaboration. Team building efforts start with encouraging open communication channels within the group to make the people comprehend the value each one brings to the table. Building trust and evolving effective group dynamics are crucial for team synergy.
Mergers and Acquisitions (M&A) is an area where Synergy between the two entities is the major factor for coming together for leveraging the strengths and overcoming the weaknesses in order to achieve business excellence. Even in M&A, risk evaluation, cultural compatibility, value proposition and competitive edge are some of the factors which need deep study before going ahead. One successful example is the acquisition of Reebok by Adidas in 2005. Both were in the footwear Industry and facing tough competition from Nike and Puma. Higher market share, cost reductions through better synergies brought them together. The results were phenomenal with market share increased from 9% to 21% and sales revenue increased by 52%. Synergy between Sports and lifestyle sectors, revamped portfolio, reduced costs, higher compatibility and clear pre – merger strategies enabled the joint entity to reap higher success.
There are many failed M&A deals as well, which provide many learning points. Microsoft – Nokia merger is one such attempt turned sour. Windows-powered Nokia handsets could not capture the smartphone market as the developers found it restrictive and incompatible for the envisaged applications. Market dynamics and poor product appeal worked against this entity as a result of which mass layoffs and final write off of Nokia caused pain across the system. Failure to understand market trends and its own product reach became the nemesis of the venture.
Synergy is an effective tool for catapulting a business to greater heights, provided enough spade work and thinking goes into the preliminary stages of the venture. Creating Synergy is a tough task by itself since it involves evaluation of core strengths and external environment. Measured risks, careful planning and proper timing are essential to sustain this business exercise and reap quantum benefits in the long run.