Let’s face it, most M&A post merger activity focuses on taking out redundant costs like the overlapping circles in a Venn Diagram. While absolutely necessary it’s misses the other side of synergy where performance multipliers exist.  Finding and harnessing these multipliers can make the difference between disappointing “mash-ups” and true synergy creation.

What’s missing is the actual measurement of synergy. We define synergy as the number of post merger integration touchpoints between each desired outcome.  The higher number of downstream impacts the greater amount of synergy (leverage)

Each pre-merger organization had a target rich environment of improvement opportunities. If these opportunities are integrated across both organizations into a single leverage map then actual synergy can be measured. 

For example, if you want to measure the synergy of combined digital services you can identify both the upstream and downstream dependencies as shown below:
Those outcomes in red are prerequisites. Those in green are downstream impacts.  So each outcome essentially has two scores: upstream dependencies and downstream impacts. 

For a larger view: combined digital strategy

Once the leverage scores are known you can aggregate them into project scopes.  This enables projects to be prioritized by leverage.  Most prioritization only includes ROI measurements.  But isolated ROI measurements lead to siloed improvements.  When combined with leverage scores the true synergy effects can be predicted as shown below: 

Just using ROI will eliminate those projects needed to create synergy effects.  For a larger version: digital strategy portfolio

Project prioritization can now be transparent with both Leverage and ROI calculations as shown below:
This allows lower ROI projects to be included for their higher synergy scores.  For a larger version: prioritized project list

So to overcome the issues of failed M&A mergers to find synergy multipliers, reach out to us for more information or a demo.

Don Frazier PhD
CEO LeverSource LLC