In our recent Inclusion Inc. At The Fletcher School conference, there was a fascinating conversation between Tim Cross, President of Young Builders Internationaland two of YouthBuild’s corporate partners, Lata Reddy, President of The Prudential Foundation and Dina Silver Pokedoff, Senior Brand Manager for the Saint-Gobain Corporation.
The discussion provided insights into what it takes to enter into a partnership with different types of corporate entities and, more importantly, what it takes to ensure that the partnership endures.
Businesses and NGOs are very different in terms of their objectives, structures, motivating factors and cultures. They enter into relationships with each other with different objectives.
As these types of relationships mature, companies and NGOs are becoming less wary of each other. They are also investing less in partnerships, choosing to focus on specific strategic relationships. But there are still many obstacles in the road ahead.
Let’s consider their different motivations. According to the Barometer of alliances between companies and NGOsThe main motivation for a corporation to participate in such partnerships is to enhance its brand, reputation and credibility. On the other hand, NGOs participate in partnerships primarily to access funding.
Tellingly, stability and long-term impact are the second most important motivation for both sides, suggesting that each has an incentive to build long-term relationships.
For the fifth year running, Marks & Spencer’s relationship with Oxfam has been voted the “most admired” in the 2014 Barometer study. What are the factors that underpin a strong and admirable relationship? What can businesses and NGOs do to develop such relationships?
For YouthBuild, Tim Cross listed five ways corporate partners are valuable to his organization.
1. Companies are the ones who have the jobs. They represent the demand for YouthBuild services: they help young people develop essential skills.
2. Companies have technical knowledge that YothBuild does not have.
3. Corporate volunteers are key resources that YouthBuild can draw on.
4. Companies have influence over many of the enabling institutions and key actors such as the government.
5. Companies can provide essential funding for YouthBuild programs.
Through multi-year research study We have learned from our collaborative research with the Citi Foundation on what motivates investment in sustainable and inclusive businesses that companies see as essential partners in several key areas:
1. Knowledge of implementation challenges, enablers and inhibitors on the ground, particularly in unfamiliar territory such as inaccessible parts of developing countries.
2. Acquisition of talent from communities where the company has limited reach.
3. Mechanisms to expand operations by creating extensions of the corporate organization.
4. Establish key relationships with local stakeholders and communities and build brand equity. This would also include building credibility and goodwill with policymakers and regulators.
5. Mechanisms to develop market knowledge by leveraging local customer needs, conducting market research and learning from pilot projects.
The more reasons each party can cite for entering into the relationship, the more likely it is to last and contribute to strategic objectives.
Of course, there are many obstacles. Let’s consider five common sets of challenges when starting, expanding, and maintaining partnerships:
1. How compatible are the goals and cultures of both parties?
2. Are there mutually agreed parameters to measure the success of the relationship and its impact? Does the relationship generate tangible business value for the company and contribute in a measurable way to the NGO’s social purpose?
3. Does the inherently asymmetric nature of the relationship lead to friction?
4. To what extent does the relationship depend on personal connections and chemistry between key individuals?
5. Do differences in time horizons and changes in priorities, particularly on the corporate side, prevent the development of a long-term strategic relationship?
Help us move forward by telling us how you initiate and evaluate inclusive business activities in your organization: take part in a survey produced by The Fletcher School in collaboration with the Citi Foundation.
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