Partnering with the Private Sector: Five Lessons

My last article was about social impact organizations, how they work, and why you might (or might not) a company might want to partner with them to solve business challenges.

Now, I want to turn the tables and look at partnership from the other perspective. If you work at a social impact organization (donors, multilaterals, NGOs, etc.) what should you keep in mind when working with corporate partners?

When I led a teacher training initiative at Microsoft, I often spoke at conferences attended by social sector representatives. I could practically see people’s eyes turning into dollar signs when they heard where I worked. The stark reality was that our entire budget for a worldwide program was tens of millions of dollars, which left little room for transactional donations to organizations. The vast majority of the $250M program went to the field to help train teachers and school leaders. To drive global initiatives, we had to rely on strategic engagements where we could co-design a partnership that would be mutually beneficial.

Several years ago, I met several representatives from a large, UK-based educational NGO. In initial discussions we discovered that our organizations broadly agreed that the best way for students to learn 21st century skills (creativity, collaboration, communications, etc.) was to train teachers on using technology to support innovative teaching and learning practices. We arranged for a second meeting at Microsoft’s HQ near Seattle to hash out a partnership.

The London-based team arrived, ready to ask us for millions of dollars to sponsor several of their programs (I learned this later). I started the meeting by saying we wouldn’t talk about money but would instead be discussing the challenges each organization faced, quantifying the assets we could bring into a partnership, and only then determining if a partnership made sense. From there we’d co-design a partnership approach and funding strategy.

I could tell they were shocked. They told me later they’d expected to walk away with a check. This, of course, led to the inevitable “valley of despair” that seems to be a part of every partnership negotiation. A day later, we were joined by one of their colleagues from Kenya. He immediately helped us understand the perspective from the field and build a program that would address education reform from a policy perspective. We ended up building a very successful multi-year partnership to reach thousands of education policymakers. So, the discussion became more about what we could do, rather than how we would fund it. And the funding indeed followed the program.

In the years since that story, I’ve worked with dozens of multinational companies to design successful partnerships. Here are four key lessons I’ve learned about working with companies:

Lesson 1: Think Transformation, Not Transaction

The first lesson is to design partnerships that are transformational, rather than transactional. Don’t assume that your corporate partners have budget to simply write a check to support your organization ore your existing programs. Yes, there are corporate foundations that have money and will give grants to non-profit organizations, and there is value in this. But if you want to develop a transformational partnership, you should get smart about how your organization can solve the business issues a company may be facing.

Can you help them reach new customers? Do you have experience and networks of farmers that can help drive sustainability in a supply chain? Do you work on labor or land rights issues that might be relevant? Do you have a unique way of reaching the last mile of consumers? Then, think about a company’s non-financial assets and how they can be leveraged to improve the work you do, whether it’s their technical expertise, reach, channels, or scale. In other words, try to think more like a business.

Lesson 2: Companies Are Not Monolithic

I’ve heard many people at non-profit organizations express skepticism about the ambitions and goals of prospective corporate partners. It’s true that many companies have aspects of their business or past issues that are less than ideal (labor issues, unhealthy products, murky supply chains, etc.), but that should not necessarily negate the possibilities to partner with that company. Think about a company that makes products that might be unhealthy if consumed in large quantities. At the same time, that company may be working to create more sustainable supply chains, improving labor practices in its factories, and working to guarantee better opportunities for women. In other words, both things can be true: a company can have issues and can also be doing the right thing.  

Of course, you should determine where your organization wants to draw the line on which companies you want to work with. Decide what aspects of a company’s business can extend your mission and which would be detrimental it. For example, in a previous role, we were approached by a foundation that was funded by Big Tobacco. We were crystal clear that we had no desire to push the agenda of tobacco companies. However, as we got to know the organization better, we recognized that there were areas of alignment. The team we that approached us was working with smallholder tobacco farmers in some of the least-developed countries on earth. These farmers’ livelihoods would be decimated by decreasing demand for tobacco worldwide, and they needed to explore alternative commodities and markets. After much consideration, analysis, and internal debate, we decided to work with the organization because working to improve the livelihoods of smallholder farmers fit squarely in our mission.

Lesson 3: Understand the Corporate Structure

It’s important to understand the corporate structure of a prospective partner, and what the motivations and incentives might be for different teams in the company. In their most basic form, companies’ source raw materials from factories, farms or mines (or develop intellectual property); develop products to meet a customer need; and sell those products to customers (consumers or businesses). Within this basic structure there’s a ton of nuance, and the dynamics in any big organization are inevitably complex and unique.

For example, you might be working with a corporate sustainability team that is trying to improve a broad range of practices across a wide variety of supply chains and issue areas. They may be responsible for greenhouse gas emission reductions, reducing poor labor practices, preventing deforestation, or a host of other issues. To achieve their goals, people on the team will need to partner with procurement, legal and government affairs, communications, marketing/brand, manufacturing and operations, and treasury teams. They need to manage projects, partnerships and programs with field teams that might have different motivations (e.g., getting the best price for goods or meeting quarterly sales targets) and incentive structures. Any corporate manager will tell you that a large part of their job is managing expectations and driving influence across a matrixed organization.

Before moving forward with any partnership discussions, spend time mapping the internal groups that your counterpart may be working with, and how they may contribute to (or block) a partnership. This can be done through external research or by simply asking your contacts who they need to work with and what the opportunities or challenges might be. These internal stakeholders should be part of any partnership co-creation process. 

Lesson 4: Recognize HQ vs. Field Dynamics

The opportunity to partner with companies can come from many different areas or geographies, and each company operates differently when it comes to the headquarters vs. the field. In some cases, you might find that field teams are fully empowered and have the budget to develop and execute partnerships. In other cases, field teams may be completely dependent on corporate support and may in fact have their objectives and strategies dictated to them by HQ. These dynamics will dictate the power dynamics at play and can influence the success of your partnership.

In any case, if you are developing a partnership that will operate at the field level, you and your corporate partner will likely need to get buy-in and commitment from field teams. These teams will often be responsible for sourcing or for selling, depending on what part of the business you are working with, and their goals may not be well aligned with the longer-term objectives of a strategic partnership. This is again when it becomes super important to understand the business objectives of your partner. Think about what’s in it for the field reps of your partner: For example, how would improving irrigation practices at the farm level increase yield and quality, two things that a field agronomist might care about? Will a program focused on small and medium enterprises in villages help a field salesperson achieve their targets for the year?

Lesson 5: Recognize Your Value to the Relationship

Just because you are a smaller, social-sector organization working with a well-known international company, it’s important to recognize – and help your partners recognize – that you bring a lot to the table in any partnership. Make sure that you clearly articulate the value of your organizational assets, your mission, and your ability to execute.

Recognizing your value also means that you don’t need to acquiesce to urgent timelines around an announcement deadline, event, or the need to sign an MOU. Some companies move so quickly that there’s an attitude of “getting it done and worrying about the details later.” I’ve seen too many partnerships fail because something that looked good on paper has no real meat on the bones. While there might be very good reasons to work toward a deadline, it’s imperative that you and your partner take the time to think through partnership governance, roles and responsibilities, and success metrics. Don’t be afraid to push on this, even if you are working with a well-known international brand; it will pay off in the long term.

Of course, every company is different and every partnership has unique dynamics. Building a successful partnership is first and foremost dependent on establishing strong relationships with the people you’ll work with. Once you establish trust, define common objectives and build a mutual understanding of what you want to achieve together, I hope you can use the lessons above to build great partnerships.

 We’re always happy to help you brainstorm strategies for working with corporate partners!