How theory can help to improve the real world

The following are just a few reports reflecting the real and inspiring change that can happen when different kinds of organizations work in partnership:

• “Leaders of about 100 companies commit to improving compliance practices and to foster a high-level dialogue between business and governments on key corruption challenges.”
• “A partnership between Vodafone, USAID and TechnoServe kick-starts a new wave of mobile solutions to drive agri-transformation.”
• “As chronic and non-communicable disease rates continue to climb, governments, companies and non-governmental organizations need to join forces to provide, disseminate and pay for adequate prevention and treatment.”
• “Facilitated by the World Economic Forum, Agility, AP Möller-Maersk, TNT and UPS collaborate in the Logistics Emergency Teams to help the humanitarian sector with emergency response to large-scale natural disasters.”

All these examples show that partnerships are being used to address complex societal challenges. Furthermore, the number of partnerships seems to be growing exponentially. You might be forgiven for thinking that they are a cure-all for the world’s problems, but in fact they are no panacea. We are inclined to forget – or underestimate – the time, resources and energy required to navigate through the many challenges that emerge from collaboration. For example, for the Logistics Emergency Teams to be deployed on the ground, it took nearly two years of intensive discussions, trust building and thorough planning.

Any help should be very welcome, even if it is from an unlikely source such as academic theory. Could theory really help practitioners use partnerships – a form of organizing – more strategically and effectively? We at the Geneva PPP Research Center argue that it can, and for several reasons.

First, theory helps define what partnerships are and what they are not. Specifically, in a partnership, public entities, companies and/or civil society organizations enter into an alliance to achieve a common practical purpose, pool core competencies, and share risks, responsibilities, resources, costs and benefits. Given their active combining of resources and sharing of the risks and responsibilities involved, partnerships differ from rather loose roundtables focused on (only) exchanging information.

Second, theory helps practitioners understand when partnerships should be preferred to unilateral or market-based solutions. Partnerships are preferable if the actors are interdependent and have a mutual interest in solving a problem. For example, logistics companies operating in disaster-struck areas want to help society and the business environment to recover as soon as possible while, in the immediate aftermath of a disaster, humanitarian organizations face important logistics constraints. The partners’ interdependence is the glue keeping them together, while their mutual partnership-related benefits drive their commitment.

Further, a partnership is advantageous if it is able to provide benefits for society as a whole that single companies cannot, as they would simply find it too difficult to justify the total cost and the risks. In addition, projects that address societal problems have very high levels of uncertainty. An arm’s length market transaction based on court-enforceable contracts that neatly define each party’s actions on the societal problem in advance would not allow the flexibility that the high levels of uncertainty necessitate.

Theory thus emphasizes that the goal of partnerships is to realize a joint purpose. Their intention may be to raise awareness and to jointly mobilize resources to address a societal problem. The Global Health Initiative and the Global Fund are examples of such partnerships. Partnerships intent on advocacy and resource mobilization often depend on a well-governed host organization and clear financial accountability.

Alternatively, the partners may focus their joint efforts on policy enhancement, whether this refers to the policies of international organizations, governments, companies or civil-society organization. The World Economic Forum’s Partnering Against Corruption Initiative is an example of such a partnership. Each partner is responsible for implementing the defined standards within its own organization, but the collaboration of all the partners defines and monitors the standards. Pursuing such a partnership requires democratic accountability among all the parties who have signed up to it through participation, incentives and the application of sanctions if malpractices occur.

Conversely, in operational partnerships, the partners agree to jointly deliver specific goods and/or services. Examples of such partnerships are the above-mentioned partnership between Vodafone, USAID and TechnoServe (operating as part of the Grow Africa initiative) and the Logistics Emergency Teams. Partnerships with an operational focus require the internal coordination processes, roles and responsibility to be very clear in order to ensure that the desired societal outcomes can be achieved effectively and efficiently.

Ideally, the partners in a partnership define its main intention in line with the best identified leverage point from which to address the societal problem. However, many problems may require the sequential use of different intentions. For example, the stakeholders need to be made aware of the problem before operational solutions can be applied. Moreover, once an operational solution has been tested, the scaling up of efforts may require changes in current policy. Although a partnership could handle all these intentions, it may need to alter its partners or even its design to ensure that it can provide the necessary resources and skills.

Consequently, theory helps understand when partnerships are appropriate and what their different intentions imply. Establishing trust, providing boundary-spanning leadership and aligning the partners’ different interests are all important for partnerships to succeed. But the partnership’s main intention may call for drawing specific attention to clear financial accountability, compliance or to well-designed internal coordination processes and operational excellence.

Authors: Gilbert Probst is Managing Director at the World Economic Forum and the co-author of Tackling Complexity. Dr Lea Stadtler is Head of the PPP Research Center at the University of Geneva

Image: General Motors (GM) Chief Executive and Chairman Rick Wagoner (L) and United Auto Workers (UAW) President Ron Gettelfinger take part in the ceremonial handshake that signals the start of contract negotiations between GM and the UAW in Detroit, Michigan July 23, 2007. REUTERS/Rebecca Cook