syn*er*gy, (sinərjē), n.
The increased effectiveness that results when two or more people or businesses work together
Synergy, in the common lexicon, is the magic that makes collaborations more efficient, effective and profitable than individualized efforts. It originates from the Latin word synergia,meaning “cooperation.” You’re most likely to hear it used to describe the potential benefits of a collaborative or combined effort, like a strategic partnership, merger and acquisition, creative brainstorming session or co-branding effort.
But there are actually two types of synergy: positive synergy and negative synergy. And to make things even more confusing, negative synergy can be a good thing and a positive synergy can be a bad thing.
Positive synergy is when the sum of the whole is greater than the sum of its parts — essentially, when two plus two equals a number greater than four. Negative synergy is when the sum of the whole is lesser than the sum of its parts, or when two plus two equals less than four.
In the world of business, we rarely hear synergy used to describe undesirable reactions. Synergy is a word that’s overused to describe desired outcomes but under-utilized to evaluate undesirable implications and to mitigate risks. This phenomena is referred to as synergy bias, and it’s a problem because you can’t mitigate risks of which you are not yet aware.
It would seem to follow that as a business, you should always aim for positive synergy. Negative synergy calls to mind your classic death-by-committee and meeting fatigue—situations where collaboration actually reduces efficiency rather than igniting it.
But a neutralized outcome is not always a bad thing: for example, acquiring a company, technology or new hire for the purpose of neutralizing an internal weakness in your company. Reducing the strength or severity of a competitive weakness is a beneficial example of negative synergy.
Positive synergistic reactions aren’t inherently desirable just because two components are stronger together. Teams that share an aversion to risk often experience synergy. Their shared aversion is reinforced, making them more risk-averse together than apart. This can create significant barriers to innovation, change-management, and an organization’s ability to respond to market shifts. The synergy sparked by sameness can result in less dynamic teams.
The good news: When a positive synergy causes harm instead of benefit, negative synergies have the potential to neutralize the outcome. Incorporating new team members who excel at strategic change-management can neutralize the group’s overall risk aversion while still reducing the risks associated with stagnation. Cross-functional teams — which create synergy through breadth of experience, expertise and perspective rather than their focus on sameness — are another example of neutralizing undesirable synergy.
The secret to leveraging collaborative efforts to drive revenue, sales and efficiency is to evaluate the potential for both desirable and undesirable synergies — which can be positive or negative. When vetting a collaborative arrangement, consider not just the potential success of your combined strength but also the potential downfall of that very strength. Once you’ve identified the potential undesirable synergies, you can strategically avoid them and mitigate the risk of unintended outcomes.