Partnerships: from spare change to real change

June 01, 1999

Rosabeth Moss Kanter recently argued companies no longer view the social sector as a home for spare cash but as a learning laboratory. Here Peter Truesdale reviews her thesis and examines other recent studies on partnerships.

These days everything seems to be managed by partnerships. Once driving along Britain’s roads one passed small signs displaying the coat of arms and name of the local authority. Now one is greeted by huge signs sprouting a colourful array of logos, proudly proclaiming that the trees are being planted or the town centre is being restored by a “Partnership”. How can these partnerships be made to work? Recently three leading researchers published their latest findings.

US case studies

In a May-June HBR article (1), Rosabeth Moss Kanter, professor of Business Administration at Harvard, examined companies which are moving from corporate social responsibility to corporate social innovation. Making this new paradigm work isn’t easy, she says, but has identified six principles of successful private-public partnerships. They are:

a clear business agenda

strong partners committed to change

investment by both parties

rootedness in the user community

links to other community organisations

long-term commitment to sustain and replicate results.

Some of these points seem very obvious. The examples of good practice that Moss Kanter gives show how far short of the ideal many of the so-called partnerships now operating in the UK fall. Particularly apparent is the need for clear business reasons for involvement. A striking example of this is Marriott International’s need to reduce employee turnover among their lower wage workers and so cut recruitment and retraining costs. Here there was a great financial incentive to match business need with the social needs of groups normally excluded from the workforce.

Equally striking is her point that there must be investment by both/all parties within the partnership. Coming with a realistic price tag attached spurs a proper assessment of the benefits each partner gains and leads to a sharpening of business focus. In the case of IBM’s work with the schools of Broward County, Moss Kanter cites examples of a return on investment to both partners. For IBM, the project provided an unusually challenging assignment for employees, a clear staff development benefit. On the other hand, the schools have had to act in a significantly more market-driven way and to become more efficient in selecting staff to participate on the projects.

Community roots

Moss Kanter’s fourth principle – rootedness in the user community – is clearly absolutely critical to success. All partnerships exist to benefit particular geographical communities or user groups. It is also true that these groups are likely to be in relative terms powerless, voiceless and deprived. Moss Kanter notes that “innovation is facilitated when developers learn directly from user experience”.

An example of good practice is IBM integrating its project team of technologists into schools in Broward County. There were distinct gains for the IBMers in a better understanding of the culture, priorities and language of the schools’ system. Another is BankBoston’s First Community Bank taking special steps to staff its branches in deprived areas with employees who understood the neighbourhood. The Bank forged links with minority ethnic groups and customises and translated specific documents.

Moss Kanter comments that this “helps make parent BankBoston a leader in the urban market”. Fine, but one does wonder whether or not the issue is not a little more thorough-going than this. How many individuals working in urban regeneration partnerships really know what it feels like to live on social security, to live on a run down, crime ridden estate or to be third generation unemployed? Moss Kanter identifies an important principle but it is an area where good practice needs to be established, identified and spread.

In for the long haul?

Moss Kanter’s final principle spotlights the importance of having a long-term commitment to sustain and replicate the solution. How many partnerships currently operating in the UK have plans to replicate their solutions? Not many.

Why is this? Moss Kanter says “First Community Bank took five years to show a profit but last year it was number one in sales… Investments in the social sector, just as in any start up, require patient capital.” Here we link back to the first principle. If there is a strong business agenda, then there will be a link back to some clear beneficial commercial return. The partnership activity will deserve and get the scrutiny afforded to other key business indicators. If there is not a strong business agenda, then the partnership activity is in fact solely philanthropic and will have difficulty preserving its place in the corporate priorities.

Practical steps

Moss Kanter is good on identifying best practice but sketchy in explaining how it might be replicated. Help is at hand the latest publication from Ashridge, Making Community Investment Work. The publication (2) is sponsored by North West Water and Post Office Counters. In it, the authors set out the key questions that need to be asked:

what are the aims and objectives of the partnership?

who will benefit from the partnership?

how and why was the partnership established?

who is involved?

what resources time and expertise are on offer?

what support is necessary for the partnership to succeed?

is a partnership the best way of tackling perceived need?

This check-list is augmented by eight critical success factors to make sure partnerships really work. These are all thoughtful and practical. Perhaps the most useful of all is the last one – partners must be prepared to ask “has the partnership done what it has set out to do?”

The questions and the critical success factors are reflected in an immensely helpful five-stage table showing the development model for partnership. The authors point out the importance of building up trust, respect, common goals and measurements before going into action. They also point to the importance of having a robust exit strategy. The Ashridge model can be recommended as a practical tool both to existing partnerships and to ones that are coming into being.

Alternative analysis

It is not possible with similar enthusiasm to recommend for practical advice INTRAC’s NGOs and the Private Sector: Potential for Partnerships? Published at the end of last year (3), the International NGO Training and Research Centre has funding from the Ford Foundation to examine NGO / business relations. The paper is built on a model in which the NGO’s have a monopoly on morality and the private sector a monopoly on resources. This mindset does not deliver real partnerships.

However even within this somewhat benighted view of existence, there are early glimmerings of dawn. INTRAC recognises that proper partnerships involve all partners committing resources. There is also recognition that there are limits to corporate responsibilities. While short on practical advice, the paper is certainly worth a read simply to remind corporate practitioners that there are alternative views about what partnership between the private sector and others might mean. Not all is sweetness and light.

Necessary actions?

Many companies are involved in partnership activities. Now is the time for fundamental thinking about what partnerships are for and what makes them successful. Without constructive debate about this, it is likely that the partnership model will come under adverse criticism for being a form of tokenism. There are hints of this in the INTRAC paper. Alternatively partnerships may just stop being flavour of the month and wither away. To avoid this fate, those involved need to present a clear and convincing case of the mutual benefits that come from partnership working.

Peter Truesdale was for eight years until recently Esso UK’s community affairs manager.

(1) Rosabeth Moss Kanter “From Spare Change to Real Change: The Social sector as Beta Site for Business Innovation” in Harvard Business Review May-June 1999.

(2) Chris Gribben, Avril Dale and Andrew Wilson “Making Community Investment Work: A guide to effective corporate community investment management” Ashridge Centre for Business and Society, ?25. (01442 841176)

(3) Simon Heap “INTRAC Occasional Paper 27  – NGOs and the Private Sector: Potential for Partnerships?” ?7.95 (01865 201851).

Corporate Citizenship Briefing, issue no: 46 – June, 1999