Synergy and its correlation to performance

This topic contains 2 replies, has 3 voices, and was last updated by  Michael Maggiotto Jr 7 months, 1 week ago.

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  • #118337

    Joselin
    Participant

    Does achieving “synergy” necessarily lead to positive P&L?

    Potentially, could you achieve synergy but fail to produce good results due to a miscalculation or poor implementation of cost-benefits targets, or perhaps even due to the timeline required to achieve effective synergy.

    #118346

    Samantha Maraj
    Participant

    Agreed. Realised synergies would not exclude the need for proactive and dynamic business strategy, employee engagement and efficiency. Without successful business practicies, a merger that results in synergies is likely to be a short-term win.

    #118361

    @joselin – There are plenty of stories people can tell about doing everything right and still not achieving the result. That does not necessarily mean you did it wrong, did the wrong thing, nor that you should change. Sometimes it just means we need to be patient. While we plan to the best of our ability, not all good outcomes adhere to our plan nor timeframe. If you have developed a solid strategic plan, if you believe in that plan, and you are vigilant about validating results, you will know where you need to adapt and where you need to stay the course. People synergies are critical to keep aligned. Make sure you have strategic human resource personnel who can map effective human capital strategies around all disciplines of human resources and you will likely see the synergies you hoped for in the transaction thesis sooner rather than later.

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