In the Harvard Business Review, Sep / Oct98, Vol. 76, Issue 5, p131-143, Michael Goold and Andrew Campbell describe 5 underlying characteristics which successful synergy efforts have been succesfully built upon. They include:

• Transferable knowledge or know-how Operating units often benefit from sharing insights on a particular approach, technology, domain, or business opportunity. This knowledge is often codified in design manuals and processes, but more often is informally scattered across the business's organizations and people. When this is the case, value may be realized simply by forming communities of practice to encourage exchanges of these best practices. This can be a particularly powerful concept when the learning cycles vary widely across different businesses, due to different product line development times. Coordination of strategies can also be a powerful and effective way to respond to emerging technologies, or consolidate resources to exploit new opportunities which take advantage of them. However, any efforts to consolidate this knowledge into a standardized approach should focus on future, rather than current, efforts, and should only be attempted after the proposed standards for that work have been adequately verified and validated in representative situations.
• Shared tangible assets and resources Operating units may also be able to realize value by sharing physical assets or resources, especially when such resources are expensive or difficult to obtain. By sharing access to such high-cost assets, rather than duplicating them at multiple locations, they may be able to realize economies of scale and avoid duplicated effort. Such coordination, however, can be difficult to achieve in practice, and in at least some situations, can lead to sub-optimal results, unless the requirements for such elements are homogenous across domains and product lines within the business.

  A classic example of this was seen over the last twenty years, with the introduction of computed tomography (CT) scanners into hospitals. When such scanners were first introduced, the hospitals within a community typically shared access to them. This is because such high-value assets typically require both significant, up-front investments, and specialized maintenance and operational expenses over time. Through such sharing, the total costs of usage could be fairly distributed among all users within a community, as the usage was developed over time. In medicine, such emerging offerings today are believed to be responsible for 50% of the cost of escalating health care. Yet over time, as broader usage and competition drives down the unit costs of such services (a dynamic which may not be realizable within businesses), the justification for such shared use may be eroded, since the cost of these units typically is reduced as technology improvements and competition affects are incorporated over time. Such trends allow individual hospitals to then afford to offer such services themselves.

  A related example is the trend in medical laboratories that are used for diagnostic tests. The use of results from such facilities in medical diagnosis is only possible through standards imposed on equipment, personnel, and procedures used within those facilities. Through these means, there is a high probability that a laboratory specimen submitted to different facilities will produce the same result. Without that foundation, improvements in medical and patient care would not be possible.

• Pooled negotiating power and decision-making By coordinating decision-making for key decision-making or activities, such as procurements, separate entities may be able to obtain improved insights, or achieve negotiations leverage with suppliers. While this leverage can be dramatic, it also can lead to a broad-based 'lock-in' with one particular technology, which then can slow consideration or adoption of emerging alternatives in the future. This can thus potentially lead to trading one competitive advantage in the short term (cost) for a disadvantage in the marketplace in the longer term (flexibility). While such pooling can thus be useful during negotiations with a particular supplier in the short term, it can backfire if such standardization dilutes negotiations leverage in the long term.
• Vertical integration of products and services Coordinating the flow of information, components, or services across a company can reduce inventory costs, improve capacity utilization, and enable leaner production systems to be created. The key capabilities for this to happen are a robust technical and business architecture, a rapid and effective means of tailoring production, and a coherent accounting structure to effectively manage the necessary inventory, flow, and associated constraints, without disrupting commitments already in place. Generally, it is best to prove out such approaches in one business, before attempting to broaden their application to others.
• New business opportunities New business opportunities may be identified and facilitated by exploiting the above capabilities, and harnessing them to open up or improve market access for selected products. Such value may prove to be significant, but should not be relied upon in justifying a synergy-based endeavor.

Extracting value from each of the above opportunities will typically requires investments to initiate, improve, and sustain the infrastructure required for the community targetted to deliver on this potential. One of the key ingredients in each of the above scenarios is to make an assessment within this community of their existing community standards. Such standards can provide a framework and means of assessing readiness to structure these efforts and prepare to deliver the above opportunities, if this infrastructure is sufficiently robust. Without standards that are sufficiently robust, the ability to share knowledge or assets, coordinate strategies or procurements, or integrate products within improved architectures or within new business opportunities can disappear, or be significantly reduced.

With that in mind, the following lessons learned on standards, from the computer sage Gordon Bell, deserve particular attention:

1. A standard should delineate boundaries of homogeneity, enabling heterogeneity outside these areas, and ideally facilitating unbridled innovation within these areas.
2. A standard is more important for how it constrains its affected users than for what it offers to those users
3. A standard should be a specification to which a future family of products or artifacts should conform, not just be a design for a particular component or product that is to be produced at a particular point in time.
4. A standard must have a defined user community— and should only be expected to benefit that community, and therefore only be applied within that community.
5. A standard will only be as strong as its enforcement mechanism, though this mechanism will likely need to change over time.
6. Prior investments should never be ignored by standards, but should rather serve as hints about architectural features that the standard should accomodate and anticipate.
7. Innovations within a standard should require “skin in the game" for the innovators. Otherwise, change will occur for change's sake, and standards bearers will rush publications of standards before they are ready.
8. The lifetime of a standard should be limited to the period in which it enables innovation within its scope.

A careful reading of the above list reveals that synergy, without standards, can be very difficult to achieve, or may take much longer to be realized than the business can realize from alternative uses of its resources. Bell's principles for the development and use of such standards are thus essential reading for those that must put 'synergy enablers' into play:

• Either make the standard or follow the standard.
• If you set out to create your own standard, make sure it’s one that will stick.
• Be prepared to follow standards, as they evolve.
• When chosing in how to invest in standards, “Better” is often the enemy of “good enough”.
• When developing standards, less truly is more. It may be that “more is merrier,” but in the standards realm, many merry folks almost never make for a happy result. You need concise, accessible standards over volumes of guidance that no one has time to read.The fewer standards, the better.
• Standards should be based on real experience, not on committee designs. It is far better to keep standards in draft form until tested in the marketplace than to prematurely align to things that have not yet been demonstrated in practice.

With the above principles in mind, the following sections review a series of case studies, which explore my own experiences with synergy opportunities, in different settings, and how they played out in the presence or absence of standards. Like always, your mileage may vary... Thus, it's best to keep in mind that old adage posted in most sponsor's rear-view mirrors: "some initiative targets are closer than you think".