Most synergy cases fail before execution – not in execution.

They fail before Day One – quietly, in the assumptions used to justify the deal.

By the time delivery starts, the numbers are often already wrong. Execution doesn’t correct this. It reveals it.

There is a name for this pattern: Hope-Based Budgeting.

It’s what happens when numbers are shaped to make a transaction work and are then treated as the plan rather than what they are – rough estimates.

This follows on from an earlier piece, The Synergy Myth: Thirty Years On, and Still Costing Billions.

Harold Geneen, President of ITT, put it best. He was one of my early mentors.

“You manage with facts. Full stop.”

He had no patience for story-shaping or optimistic forecasts. His rule was blunt: “If the facts are wrong, the management is wrong.”

Nowhere today are facts softened more routinely than in the modern synergy case.

What long exposure to execution teaches you

If you’ve spent time close to a live integration, the pattern is familiar. Across large programs – telecoms, infrastructure, government – the mechanics repeat. Different sectors, different cultures, same failure modes.

You see drift before the first steering committee meets. You spot weak assumptions buried deep in the synergy deck. And you know what comes next.

Once the deal is done, “storytelling” becomes irrelevant – except when it’s used to explain why performance is slipping.

Pressure arrives, as it always does. A dependency drops. A number wobbles. Delivery becomes harder than the plan suggested.

The instinct is rarely to revisit the assumption. Instead, a reassuring story emerges -plausible, calming, and always temporary.

This is where governance fails.

Story replaces fact. Reassurance replaces rigour. Execution continues, indifferent to both.

Execution doesn’t care about narratives. It only responds to reality. That’s why Hope-Based Budgeting is dangerous: it locks the story in place long before execution has a chance to speak.

The numbers fail before delivery does

Bain’s Global M&A Report (2024) is blunt, and it mirrors (on page 85) what shows up repeatedly in practice: Execution failures are common, but in most large deals the failure starts earlier. It starts in the numbers.

Assumptions collapse first. Execution merely exposes it.

Executives often believe they’re being bold. In practice, they’re being optimistic – and reckless optimism is the most expensive mindset in M&A.

The data reinforces a truth seen for decades: most synergy misses originate upstream, in anaemic due diligence where numbers are shaped to fit the deal rather than reality.

The synergy case becomes the bridge that makes the valuation work. The estimate stops being an estimate and becomes an obligation. Untested assumptions harden into targets.

At that point, leadership capability becomes secondary. Teams are handed a fantasy dressed up as a plan.

Early progress is usually an illusion

What often looks like early progress reinforces the illusion. Cost synergies arrive quickly because they are easy.

Headcount is reduced, hiring paused, work consolidated or moved. These actions require approval, not integration. They create visible movement and reassure stakeholders that the merger is “working”.

But this isn’t value. It’s gravity.

Revenue synergies tell a different story. They are carefully modelled, confidently presented, and almost always scheduled for the near future.

Systems will align. Operating models will settle. Cross-sell will unlock. The promise keeps moving forward, but delivery rarely catches up.

Meanwhile, the only revenue line that actually matters responds to customers and markets, not slideware. Nothing exposes a fragile synergy case faster than revenue that is perpetually expected and repeatedly deferred.

By year three, the story and reality have parted company

The growth synergies that justify the acquisition premium rarely appear in the first three years.

By then, the easy wins are exhausted, integration complexity dominates day-to-day management, and some of the people most closely associated with the original numbers have moved on.

Reporting to boards drifts away from operational reality. Progress is described in terms of “momentum” rather than outcomes.

By roughly the third year, the original synergy case has hardened into mythology. Assumptions become expectations. Expectations become targets. Once this happens, the numbers can no longer be questioned – only defended.

Geneen warned that even a single “unfactual fact” can distort behaviour at scale, sending hundreds of people in the wrong direction and consuming thousands of hours of effort.

This keeps happening for structural reasons

These behaviours are not personal. They are structural. They appear wherever incentives reward deal completion over delivery, and where numbers are derived backwards from price rather than forwards from execution.

This is why serious integrations require more than coordination and reporting. They require an independent integration capability with the authority to force narrative and reality to meet early, while correction is still cheap.

Functional organisations produce specialists; they rarely produce integrators. Integration leadership is a distinct discipline, and its primary responsibility is custodianship of the facts.

Once the facts drift, everything drifts.

The board-level reality

Deals are not won at announcement. They are not won in the deck, and they are not won in the first hundred days. They are won – or lost – in the first thirty-six months of execution.

The most dangerous thing a board can do is believe a number that was never true. Hope-Based Budgeting isn’t optimism. It’s self-deception.

Boards that succeed confront uncomfortable truths early. Boards that fail explain them away.

Execution doesn’t fail synergy cases.

It simply tells the truth about them.

Boards relying on large synergy cases would do well to reflect on that.

About the author

David Hilliard is founder of Mentor, specialists in strategic program execution.

You can call him on 0118 359 2444 or email david.hilliard@mentoreurope.com.