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As Jeff Bezos, CEO of Amazon, once remarked, "If you can get all of your people rowing in the same direction, you can dominate any industry, in any market, against any competition, at any time." This sentiment firmly underscores a pivotal concept in Strategic Management—Synergy. A term rooted in the Ancient Greek term synergos, which translates to "working together," Synergy refers to the combined power of a group of things when they are working in concert, which ostensibly outweighs their individual capabilities. The creation and leveraging of strategic synergy is a key success driver for many Fortune 500 companies.

The Principle of Synergy in Management

Synergy is usually expressed by the adage "the whole is greater than the sum of its parts." In a corporate context, synergy takes shape when different units of a business interact to produce an effect greater than the sum of each unit operating separately. To visualize it, consider the powerful example of Apple, where hardware, software, and services are all designed to work seamlessly, creating a united front that invariably propels the brand's unmatched market domination.

How to Achieve Synergistic Attributes

Creating synergy doesn’t come by accident. There are specific ways you can establish synergy in your business operations. For instance:

  1. Integrating Strategic Planning and Operations: When strategic planning is managed separately from daily operations, siloed thinking often ensues. By combining the two, a shared vision emerges that can streamline efforts and enhance operational efficiency.
  2. Establishing Cross-Functional Teams: Encouraging cross-functional teams can lead to the sharing of knowledge and resources across different departments. This way, tasks are not repeated unnecessarily, and effective collaboration ensues.
  3. Promoting a Culture of Collaboration and Trust: A company's culture heavily influences synergy. A high-trust environment where open communication and teamwork are encouraged can stimulate individuals to work collectively towards achieving the company's goals.
  4. Leveraging Technology: Technology can provide an enabling environment for synergy to thrive. It can facilitate efficient communication, promote team collaboration, and strengthen coordinated business operations.

The Role of Leadership in Fostering Synergy

Leaders have a crucial role in developing and enhancing synergy within an organization. A leader's primary job is to build a cohesive team, motivating individuals to give their best to the collective effort. Here lies the need for strong Leadership skills with a clear understanding of Change Management and delegating tasks based on employee strengths, ultimately elevating the team's overall performance and output.

Pitfalls of Ineffective Synergy Management

While synergy has its benefits, improperly managed, it can damage organizational outcomes. Synergy can lead to overconfidence or complacency, causing inefficiencies and overlooked risks. This is where the role of Risk Management proves crucial. It helps identify and mitigate these potential setbacks, ensuring that the pursuit of synergy does not adversely affect the company's strategic objectives or operational performance.

Strategic Management for Optimal Synergy

When appropriately harnessed, synergy can become a unique asset that provides competitive advantages, drives growth and sparks innovation within an organization. It is therefore essential to align synergistic efforts with the company’s strategic goals, fostering an environment that effortlessly integrates Strategy Development, Operational Excellence, and Performance Management. In doing so, the organization begins to experience the accumulative impact—where the combined effect is greater than the individual contributions—thus reaping the power of synergy.

Synergy is the invisible force that propels companies towards extraordinary results. It underlies effective Strategic Management and champions the concept that unity is strength. Steering the organization towards this collaborative spirit requires a deliberate effort. It calls for a different style of leadership—one that prizes shared vision, mutual support, trust, and teamwork. In essence, the pursuit of synergy is the pursuit of organizational excellence, where the collective power not only adds to the total output but multiplies the value of business operations.

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