Five Lessons for social sector organizations that want to partner with the private sector

If you work at a social-sector organization, it can be intimidating and sometimes difficult to work with private sector companies. One key to successful partnerships is understanding how companies work. My last article was understanding international development organizations, how they work, and why you might (or might not) want to partner with them to solve business challenges.  

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

Quick story. 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. We’d instead focus on the challenges each organization faced, quantifying the assets we could bring into a partnership, and only then determine if a partnership made sense.  

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 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 necessarily have budget to write a check to support your organization or 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 truly 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 to work with. Decide what aspects of a company’s business can extend your mission and which would be detrimental to it. For example, in a previous role, we were approached by a foundation that was funded by the tobacco industry. We were crystal clear that we had no desire to push the agenda or grow the revenue of tobacco companies. However, as we got to know the organization better, we recognized that there were in fact areas of alignment. The team 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 the motivations and incentives of groups in the company. In its most basic form, a company sources raw materials from factories, farms or mines (or develop intellectual property); develops products to meet a customer need; and sells those products to customers (consumers or businesses). The goal is revenue growth and (usually) shareholder value. 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 work 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, product design/packaging, 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, program, or product development. This can be done through external research or by simply asking your contacts who they work with and what the opportunities or challenges might be. These internal stakeholders should be part of any 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, 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  

It’s important to recognize – and help your partners recognize – that you bring a lot to the table in any partnership, even if your organization is smaller or less well known. 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 quickly with 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.