Creating partnerships for sustainability
Companies are increasingly expected to join with other
organizations—both public and private—to address social and environmental
problems. Here are seven ways to make such alliances successful.
Business is being asked to
do more than ever to solve social and environmental problems. As a
result, a growing number of leading companies are taking the challenge of
sustainability seriously, not only to reduce their environmental footprint and
bolster their reputations but also to improve operations and financial
performance.
Many
ecosystem challenges cross jurisdictional boundaries and require systemic
changes beyond the capabilities of individual companies or even of an industry.
In these cases, the best approach for business can be to partner up—with
governments, investors, local communities, nongovernmental organizations
(NGOs), and other companies. Think of these partnerships as distinctive and
complicated joint ventures, often with multiple parties.
Such
collaborations often go through phases—good, bad, and sometimes ugly,
particularly in the early days. The Marine Stewardship Council (MSC), a
partnership that sets standards for the fishing industry, struggled in its
first few years with high staff turnover and unstable funding. In the past
decade, however, it has become a force. Its certification standards cover 10
percent of the global seafood harvest, and almost a quarter of global shoppers
recognize the MSC label. This covers more than 20,000 products sold in over 100
countries.
To
understand how to make these collaborations work, we interviewed dozens of
business, government, and NGO leaders. From this research, we identified seven
essential principles of success.
Identify clear reasons to collaborate
“The effort needs to help each partner organization
achieve something significant. Incentives such as ‘we’ll do this for good
publicity’ or ‘we don’t want to be left out’ are not sufficient.”
—Nigel Twose, director of the Development Impact
Department, International Finance Corporation, World Bank Group
When
organizations sign up for a sustainability partnership simply because they
don’t want to say no or be left out, commitment can be weak. Founders of a
nascent partnership must instead identify strong incentives: for instance,
maintaining a license to operate or ensuring the long-term endurance of a
profitable resource or input such as fish stocks, clean water, or forests. If
participants cannot pinpoint such motivations, that may be a sign that the
mission is ill defined.
Any
collaboration must make sense for all parties, whether their primary interests
are commercial, environmental, or social. Enlightened self-interest is the only
genuinely sustainable motive. That was certainly true for the companies that
set up Canada’s Oil Sands Innovation Alliance. This is an alliance of companies
that mine oil out of Canada’s bituminous sands; their goal is to share R&D
in order to improve the environmental performance of an industry that is the
subject of significant public debate.
Sometimes
external events can force different players to acknowledge that change is
necessary. The collapse of the North Atlantic’s Grand Banks cod fisheries in
the early 1990s made commercial fisheries much more interested in sustainable
harvesting practices, laying the ground for the birth of the MSC.
A
small problem can be more difficult to collaborate around than a big one
because the reward for solving it does not excite people or justify the effort
involved. It also helps to stay in the limelight. Although no one should join a
collaboration just for PR reasons, publicity and progress can go hand in hand.
Attention can bring more support, add credibility, and generate momentum.
A
partnership to enhance food security in Africa seems to be off to a good start
in this regard. In 2011, the World Economic Forum worked with the African Union
to create Grow Africa, a public–private partnership platform focused on
increasing private investment in African agriculture. And in 2012, US president
Barack Obama threw the G8’s weight behind this partnership approach for African
agriculture by announcing the New Alliance for Food Security and Nutrition. By
the end of 2012, the G8’s New Alliance and Grow Africa worked closely to secure
more than $3 billion in private-sector investment commitments from nearly 50
local and global companies.
Find a ‘fairy godmother’
“It is important to have a core of totally
committed, knowledgeable people who would die in a ditch for what the
organization is trying to achieve.”
—Environmental NGO campaign head
Behind
most successful collaborations are one or a few organizations that are willing
to invest more than their share of financial, human, and political capital to
make the effort a success. Coordinated action can be difficult because first
movers take the biggest risks, while later entrants can benefit without much
investment at all—and so the temptation is to come in late. But someone has to
start or nothing will happen. “Fairy godmothers” stop that from coming to pass.
They take on much of the risk and provide the generosity and sheer force of
will that helps to build trust.
Any
high-performing, credible institution can be a fairy godmother, as long as it
is passionate, credible, and courageous. GE, through CEO Jeff Immelt, took on
this role for the United States Climate Action Partnership (USCAP) in 2007,
driving the start-up phase and recruiting other companies to join.
Set simple, credible goals
“[The NGO and the private sector] had different
motives but the same objective: ensure sustainable fish stocks.”
—Antony Burgmans, former chairman and CEO of Unilever
and cofounder of the MSC
One
certain way for a collaboration to stall is when the partners have different
agendas. To guard against this, set an aspirational goal that everyone agrees
on—preferably, one that could fit neatly on a bumper sticker. The collaboration
should be anchored by an exciting, big idea and create a vision that others
will mobilize behind. Don’t be afraid that it could also mobilize opposition;
if there is no pushback, it may be a sign that the goal is not ambitious
enough.
The
MSC shows how this can work. It started as a collaboration between Unilever and
the World Wildlife Fund (WWF) in 1997; at the time, Unilever was the world’s
largest fish retailer. Each organization faced challenges in starting the
partnership. Some nonprofits criticized the WWF for, in their opinion,
compromising itself by working with a multinational company. Unilever’s
leadership was divided on whether this was a good idea. Many fishing companies
and some governments opposed developing marine sustainability standards.
Still,
with leaders from both Unilever and WWF committed to the clear goal of
encouraging sustainable fishing practices, the project went ahead. The
partners, using the successful Forest Stewardship Council (FSC) as an example,
started by consulting with stakeholders such as commercial fishermen, governments,
and environmental organizations. Only then did they design the standards for
what constituted sustainable fishing practices and seafood traceability; these
are reviewed on a regular basis. In 1999, the MSC began operating as an
independent nonprofit, free of Unilever’s and WWF’s control.
Get professional help
“It is very important to have an honest broker. The
facilitator must be neutral and very structured and keep people moving along at
a brutal pace. You need someone who can bring things to a close.”
—Darrel Webber, secretary general, Roundtable on
Sustainable Palm Oil (RSPO)
Most
collaborations need a facilitator to get started. When organizations come
together, they each have their own incentives, biases, and organizational
cultures. These can clash. Odds of conflict are highest when the organizations
are competitors or when they are from completely different sectors and
cultures. The first few months tend to be particularly rough. Members are often
slow to commit staff, and the tendency is to wait for others to offer resources
first. By pooling funds for a facilitator, the collaboration can progress, even
when staffing is still under negotiation.
In
establishing the certification standard for palm oil, for example, the RSPO
needed to create a consensus among seven distinct interest groups, ranging from
environmental nonprofits to palm growers. It took two years of negotiation to
develop RSPO’s first standard. In reflecting on the arduous process, RSPO’s
chief executive credited the independent, third-party facilitator with keeping
the discussions (even heated ones) going until the parties could find common
ground.
Over
time, as trust and confidence build and as the group moves from design to
institutionalization, a successful collaboration can and should phase out the
facilitator. Ideally, individuals who started out as representatives of
companies with competing interests become a cohesive group working toward a
common goal.
Dedicate good people to the cause
“If a company like ours believes something is
strategic, then we resource it like it is strategic.”
—Neil Hawkins, corporate vice president of
sustainability, Dow Chemical
If
member organizations decline to dedicate qualified staff, check that those
organizations have a clear reason to participate and ask why they are in the
collaboration. If good people are not volunteering, they may need greater
security, which a fairy godmother provides. Or they might want the clarity that
simple, credible goals provide: they should know what they’re meant to do and
that it’s worth doing. Working on a major collaboration should be an exciting
career builder, not a dead end. The collaboration’s vision is particularly
important at the beginning, when the effort is like a start-up. Talented
individuals will give their all when they believe in the goals. As one of the
participants in USCAP said, “If I were to put anything on my tombstone, it
would be this effort.”
Internally,
it’s important to dedicate senior leadership. Without leadership, middle
management often lacks the incentive to take action, as well as the necessary
decision-making power. Instead, it tends to favor business as usual.
Cross-sector collaborations are inherently “business as unusual.” Successful
collaborations, at least at the start, are led by senior leaders from the
founding organizations. When Yara, a Norwegian fertilizer company, agreed to
become cochair of Grow Africa, it dedicated a senior vice president to the role
and supported it with the sustained public engagement of its CEO.
Be flexible in defining success
“Partners think that collaboration will change the
world. Then it doesn’t, and they think that it failed. But often the
collaboration changed something—the way some part of the system works and
delivers outcomes. It is a matter of understanding the nature of change
itself.”
—Simon Zadek, visiting fellow, Tsinghua School of
Economics and Management, Beijing
Success
may come from unexpected directions. Be ready to embrace it—and build on it.
USCAP
set out to pass national cap-and-trade legislation. While that did not happen,
11 US states have instituted such systems, and many countries are implementing
or considering them. Is any of this directly attributable to USCAP? No. But did
the partnership help to pave the way by developing a business-friendly
approach? Quite likely.
Similarly,
the MSC is changing the fishing industry beyond the 10 percent of fisheries
that have signed up. A multitude of NGOs and other actors are working with
fisheries that may never achieve the gold standard of MSC certification but are
nonetheless improving their practices.
So
remember, while your collaboration may not change the world in precisely the
way you intend, it can still change the rules of the game in a positive way.
Prepare to let go
“I’ve been absent from the FSC since 1997. The
organization had been born and was a teenager and needed to go off and find a
job and do its own work.”
—NGO campaigner associated with the formation of the
FSC
At
some point, the partnership will either wind down or become an independent
entity. That process should be planned for.
Some
collaborations are designed to achieve a certain objective. Once that objective
has been achieved, or once the window for achieving it has closed, it’s time to
shut the door. No collaboration should be kept alive beyond its useful
lifetime.
Others
evolve into permanent, self-sustaining, and independent institutions, such as
the FSC. In these cases, founders typically move out of the picture once both a
long-term funding model is in place and there is a capable leader on the job.
Like good parenting, you know you’ve succeeded when you are a welcome visitor
but you are clearly no longer needed on a day-to-day basis.
A
version of this article also appears in Turbulence.
A Corporate Perspective on Collaborating for Resilience (Amsterdam
University Press, 2014).
July 2014 |
byMarco Albani and Kimberly Henderson
No comments:
Post a Comment