#PositiveImpact blog launch! Reflections from Concordia – building effective public-private partnerships
Our #PositiveImpact blog will explore emerging themes in the design and delivery of Positive Impact. Each month, our global experts and guests will share reflections on the intentional creation of enduring social and economic value. In our first #PositiveImpact blog Eduardo Tugendhat, Palladium’s Director of Thought Leadership, shares his reflections from the 2016 Concordia Summit and how we can harness the power of the private sector, public sector and civil society.
The Concordia Summit convenes business, government and non-profit leaders to enable partnerships and collaborations between attendees who have the capability to address many of the world’s most pressing and complex issues. Palladium participated in the September summit in New York, moderating a roundtable on its Positive Impact approach to creating economic and social value simultaneously. The sessions covered a range of topics, from sustainable food supply to migration and refugees, showing not only the vast potential of innovative partnerships and coalitions, but the challenges they face in achieving scale, impact and sustainability.
Intractable problems require innovative solutions
How can we build effective public-private partnerships? Why do most PPPs fail to meet their original expectations or remain small pilots? What can we learn from the most successful cases? And how can we build on these lessons to execute enduring Positive Impact at scale?
The most notable issues discussed at the Concordia summit with the goal of enabling public-private solutions were water security, refugees and migration; labor trafficking; education and skills for the 21st century; sustainable food supply; targeting health priorities; and women’s empowerment. Public figures, business leaders and non-profits presented ambitious new initiatives as well as their experiences in ongoing partnerships. A number of common themes emerged: there is a consensus on the need to do something about existing problems; there is no shortage of campaigns and pilot projects; but there are relatively few examples of partnerships that scale and endure with clear benefits for all stakeholders. These insights are consistent with our Positive Impact point of view and our evolving framework for systematically executing shared value strategies.
A framework for Positive Impact
The Positive Impact Framework helps organizations forge new types of relationships and partnerships with other actors in the eco-system to create economic and social value for each actor while mitigating key socio-economic and environmental problems. The Concordia summit confirmed the relevance of this framework for Sustainable Supply Chains (e.g. food and agriculture), Distribution to the Bottom of the Pyramid (e.g. health services and pharmaceuticals); Bridging the Skills Gap (e.g. workforce development); and Migration and Refugees (private sector engagement). Speakers and discussion at the Palladium Roundtable provided insights into major challenges organizations face in executing long-term and scalable solutions:
1) Measurement—what does success look like and how it can be measured? Metrics for measuring economic and social value creation seem to be a real stumbling block for many partnerships. It is easy for many organizations to agree on the need to solve a problem, but much harder to agree on exactly what to measure and how. Regular reporting on both performance and impact measures are critical for building trust and commitment within partnerships, improving cost-effectiveness, and focusing on outcomes (e.g. the real problem). Danone, one of the world’s largest food and beverage companies, stood out as an example of a company that has used clear outcome measures for supply chains including the economic viability of their farmers.
2) Business model for sustainability and scale—A number of very interesting pilot projects were highlighted throughout the event. What was not at all clear in several cases was whether a business model had been developed that would attract capital for scaling and replication. DC Water stands out as an example that seems to have achieved this by ensuring their customers value, and pay for, services received. This has also meant coming up with new pricing and service models that promote efficiency but get away from pricing by volume consumed. Having been virtually bankrupt, DC Water is now tapping into capital markets with excellent bond ratings.
3) Leadership and Governance—Bringing political, business and civil society leaders together to focus on major problems is a huge step forward. However, the execution of grand visions requires both ongoing leadership and a governance process that results in buy-in from multiple partners. For example, George Soros inspired the audience with his commitment of $500 million to seed migrant entrepreneurs and businesses employing migrants and refugees. Effective management of this fund will be challenging enough; using it as a catalyst to attract additional investors, European governments and other organizations into coordinated partnerships will be much more challenging
Achieving enduring economic and social value: what next?
The Concordia Summit achieved its objective of facilitating public-private partnerships and coalitions to address major world issues. But it also confirmed that many groups need support with strategy execution, measurement frameworks, and bringing about behaviour changes and new types of relationships within complex systems. Indeed, this is the hard part of the “intentional creation of enduring economic AND social value” – or what we refer to as Positive Impact. Our approach to economic and social value creation in multi-actor systems or coalitions is currently being refined through case studies from our project implementation experience, as well as through an interview research program with selected companies, including existing and past clients. Helping companies increase long term shareholder value through new business models and coalitions that catalyse widespread economic and social value creation will fully unleash private know how, capital and market linkages. This is critical if we are to address the world’s most pressing challenges.
Through work in development, we can develop and implement high impact solutions in health, education, food security, economic growth, governance and emergency logistics. But what if we can vastly expand the scale, sustainability and effectiveness by harnessing the full capabilities, resources and ingenuities of private, government and civil society partners working together in enduring coalitions?
We could bring about real, lasting change for the developing world.
For more on Palladium’s Positive Impact work follow us on Twitter, LinkedIn, Facebook and at #PositiveImpact.
About the author
Throughout his 36-year career, Eduardo has designed and executed market-led approaches to accelerate inclusive economic growth and generate employment opportunities. He is a recognized expert in the areas of inclusive supply chain solutions and has particular expertise in crafting and managing public-private alliances. He has worked in a total of 64 countries generating private sector investments and transforming value chains across industries ranging from agriculture to financial services. Eduardo was co-founder and CEO of CARANA Corporation, now part of Palladium. Prior to Palladium and CARANA, Eduardo was a senior management consultant at Arthur D. Little. He has an AB from Harvard University and an MA from University of Wisconsin.