_The gap between forecast synergies and realised synergies separates competent acquirers from everyone else._ --- ## The investment memo £3M in cost synergies projected. Eighteen months later: £800K materialised. Headcount down, systems consolidated, vendor contracts renegotiated. The P&L impact is a fraction of the forecast. The slide deck was convincing. The delivery wasn't. This gap is normal. Identifying synergies and delivering them are different problems. The investment memo is an exercise in possibility. The integration is an exercise in reality. --- ## Where value leaks Implementation costs eat the benefit. Platform migration takes six months and £400K in consulting fees. Eliminating duplicate roles requires severance. Vendor renegotiation yields a 15% discount but locks you into a three-year commitment. By the time you account for transition costs, net benefit is half the slide. Timing assumptions prove optimistic. The plan says consolidate HR systems by month six. Data migration takes nine months. Parallel running extends to month twelve. Full adoption, month eighteen. You get the benefit eventually — but a year late. Discounted back, that changes the economics. Assumptions don't hold. The memo assumes you can eliminate one sales ops team because territories don't overlap. In practice, the acquired business serves different customer segments with different workflows. Forcing consolidation breaks both. You keep 70% of the duplicate cost because the work is genuinely different. Revenue synergies fail more often still. Cross-sell looks obvious on slides — sell acquired products to existing customers, existing products to acquired customers. But sales teams resist products they don't understand. Customers don't care about your portfolio. Products don't bundle cleanly when pricing models and implementation complexity differ. If bundling doesn't improve close rates or reduce CAC, the revenue synergy is fiction. --- ## What actually delivers The synergies that materialise share three properties: they're specific, they're measured, and they're owned. Specific means pointing to the line item. Not "reduce overhead" — "eliminate duplicate UK HR roles, saving £180K annually." Not "cross-sell opportunities" — "sell product X to 20% of acquired customer base in segments Y and Z." Vague synergies don't get delivered because no one knows what delivery means. Measured means tracking realisation against forecast, monthly. The integrations that deliver synergies treat them like any other P&L target. The ones that don't mention synergies once in month one and never track them again. Owned means someone's compensation depends on it. Cost synergies get delivered when the CFO owns them with explicit accountability. Revenue synergies get delivered when a sales leader has cross-sell in their comp plan. Without ownership, synergies stay on slides. Good acquirers also know which synergies to ignore. Platform consolidation costing more than it saves? Don't do it. Cross-sell requiring two hundred salespeople retrained for £500K revenue? Not worth it. Vendor renegotiation saving 10% but locking you in for three years when technology is changing fast? Walk away. The best serial acquirers have learned which synergies fit their model. [[Serial Acquirers/The ITW Pause|ITW]] and [[Serial Acquirers/The Danaher System|Danaher]] extract cost synergies through operational systems — ITW's 80/20 simplification, Danaher's Business System. [[Serial Acquirers/The Heico Playbook|Heico]] explicitly avoids synergies — acquired companies stay autonomous, preserving the entrepreneurial culture that created the value. Different strategies, all deliberate. --- ## The discipline The investment memo should impress the board. The realised synergies should improve the P&L. Those are different disciplines. The first requires optimism and narrative. The second requires specificity, measurement, and ownership. Confuse them and you'll keep forecasting synergies that never arrive. --- **Related:** [[Notes/The First Hundred Days|The First Hundred Days]] · [[Notes/Third Lever|Third Lever]] **See also:** [[Ideas/Optionality|Optionality]]