Scoring Synergy With Outside Sources

“It is literally true that you can succeed best and quickest by helping others to succeed.” — Napoleon Hill, American motivational guru and author of Think and Grow Rich.

“Interdependent people combine their own efforts with the efforts of others to achieve their greatest success.” — Stephen Covey, author, The Seven Habits of Highly Effective People

Scoring Synergy with Outside Sources by Laura Stack #ProductivityIn chemistry, a “synergistic reaction” occurs when two substances interact to generate a greater effect than either would alone. This can have dangerous consequences, as when bleach and ammonia mix to produce chlorine gas.

On the other hand, adding specific impurities to a silicon semiconductor can greatly boost its performance. In a situation like this, the whole proves greater than the sum of the parts.

This principle can apply to human behavior as well. Consider the famous duos of Bezos and Page, Jobs and Wozniak, and Gilbert and Sullivan. Each member’s creative, intellectual, and/or entrepreneurial gifts reinforced the others’, producing a sum greater than 1 + 1.

Admittedly, synergy is never a foregone conclusion in any field of human endeavor, even when the conditions seem perfect. But the potential always exists, assuming those involved complement each other in terms of knowledge, skills, and abilities, and make a genuine effort to tap that potential.

Interactive Leverage

Synergy need not be limited to members of a single group. Two or more unrelated groups in partnership can also leverage each other’s strengths in such a way they profit more from working together than they would have separately. Take the inventors of the ice cream cone: one fellow sold waffles at a World’s Fair, while the entrepreneur in the next stall sold ice cream. When the ice cream vendor ran out of cups, he and his neighbor made cones out of thin waffles to hold the treat. The rest is history.

Here are a few ingredients conducive to business synergy:

1. Mutual benefit. All partners must profit from the association. Even if it’s just a relationship between a software business and the vendor supplying its coffee, the business may profit as productivity increases, which may spur them to give the vendor a bonus and introduce them to new buyers; and so synergy blooms on both sides of the relationship.

2. Complementary strengths. Each partner must contribute some mix of knowledge, skills, abilities, products, and services the other can leverage successfully. A gunsmith and an ammunition maker, for example, can come together to create a very synergistic relationship.

3. Sharable Assets. Each partner offers assets the other can leverage: customer lists, vendor relationships, processes, real estate, etc. An all-night call center and a 9-5 travel agency can easily share premises, for example. Businesses can split rental, maintenance, and utilities costs, and even use the same business machines. Both come out ahead because they’ve saved money, and can use those savings to build their businesses.

4. Little or no overlap. Companies providing the same kinds of products or services rarely develop synergy, unless they merge of course. Though a partnership may extend their reach, they usually end up taking business away from each other. The recent Sprint/Nextel partnership, for instance, didn’t work out well.

The Chain of Synergy

Some pundits call business synergy a myth, an ideal that never pans out. But I beg to differ: Given the right fit and a true willingness to work together, external partners can perform fiscal miracles for each other—and those miracles don’t necessarily stop there.

Suppose a direct mail copywriter needs a ton of printing done to help him attract and retain customers. He can partner with a printer who offers him bulk discounts, boosting his business because he can do more marketing for the same price, which earns him more money, which lets him do more marketing…. The printer’s business also booms. This enriches not just him but also his ink and paper suppliers, the companies that manufacture those goods, the companies that provide the raw materials for the manufacture of those goods, and on down the line. Everyone makes more money, and if they network and share business connections, they can create new synergetic interactions that last indefinitely.

Ideally, the end consumer also gains synergy, because the finished product enhances his or her life. Suddenly we have ice cream cones, easy online shopping, life-changing IT technology, and immortal operettas. Everybody wins!