Session 3.5 Innovative Alliances and Maxim is Ing Impacts - Ja
Transcript of Session 3.5 Innovative Alliances and Maxim is Ing Impacts - Ja
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BUILDING INNOVATIVE
ALLIANCES TOMAXIMIZE PRO-POOR
IMPACT
Jane Nelson
The Business and Poverty Leadership
Programme
Cambridge, November 15th 2006
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n WHYinvest time, money
and effort in building
alliances?
n
WHATtype of alliancesare emerging and whats
their potential?
n HOW can we build moreeffective alliances to
meet business and
poverty alleviation goals
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POVERTY(Adapted from Shailaja Fennell)
LACK of access to meet basic
needs LACK of opportunity to build
income and assets
LACK of voice to participateand influence decision-making
LACK of security to cope with
crises
MARKET-based solutions
WELFARE-based solutions -
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From the working poor to the
destitute
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The business potential for
pro-poor practices and alliances
1) CORE BUSINESS
ACTIVITES
- Workplace and
operational processes
- Marketplace and
products, services
- Value chain linkages
2) WIDER COMMUNITIES
Strategic
philanthropy, social
investment, employee
volunteering, community
development and
consultation
SYSTEM-LEVEL (industry-
wide, national or
global) Public policy;
advocacy; institution
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WHY
invest time,
money and effortin building
alliances?
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Responding to
governance gapsand failures
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The proper guardians of the public
interest are governments
The Economist, January 2005
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GOVERNANCE GAPS
BAD governance
WEAK
governanceINDIFFERENT
governance
UNCOORDINATED
governance
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Overcoming
market failuresand information
asymmetries
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Building and
sustainingTRUST
and reputation
with NGOs,
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Scandal andSuspicion
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Stakeholder activism fromanarchists to activists to active
partners
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Edelman TRUST BAROMOTER
2,000 opinion leaders in 11countries over 7 years
tracking data
NGOs MOST TRUSTED INSTITUTIONS
Trust ratings over 50% in US
(up from 36% in 2001)
Trust in NGOs increasedsignificantly in last 12
months in Canada, Japan and
China (from 36% to 60%)
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NGOs dominate the big issues in terms
of trustEDELMAN/Strategy One survey: June, 2004
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Number of International
NGOs
1909 1964 2000
50,000
176
1993
28,900
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Strategies for
NGO/Community Engagement
CONFRONTATION
COMMUNICATIONCONSULTATION
COOPERATION
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Identifying andmanaging complex and
fundamentally
new risks, new
expectations and new
opportunities thathave an impact on
both business and the
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1. Fundamental economic anddemographic shifts
2 F d t l t h l i l
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2. Fundamental technological
change
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3. Fundamental ecosystem change
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4. Fundamentally new global
health challenges
Diseases of
POVERTY
Diseases of
AFFLUENCE Diseases of
INTER-
DEPENDENCE
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WHY ENGAGE & PARTNER?
n To increase trust, influence,license to operate and
Legitimacy
n
To share risks/burdens andcreate a Level-playing field
n To drive Learning and
innovation
n To mobilize joint resources
and Leverage impact and
effectiveness
n To shape the agenda and play
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WHAT
types of alliance
are emerging andwhats their
potential ?
Diff t b i
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Different pro-poor business
strategies(Source: Nelson 1998, 2001)
ore purposes or
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ore purposes oralliances
1. DO NO HARM - Minimize negative
impacts on the poorControl AND account for social,
ethical and environmental impacts,
risks, costs and liabilities
2. DO POSITIVE GOOD - Optimize the
positive
Create NEW value through CORE
BUSINESS OPERATIONS or COMPETENCE-LED PHILANTHROPY
3. CONTRIBUTE TO SYSTEMIC CHANGE -Advocacy, chan e the rules, shift
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KEY MODALITIES FOR
BUILDING ALLIANCES
1. Alliances at the
individualcompany-level
2. Collective industry-
wide action
3. Collaborative multi-
sector action
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1. Alliances at the
individualCOMPANY LEVEL
To improve and account forcompanys own performance advice; research; assurance
To innovate and create newmarkets, business linkages,products, services andprocesses that meet socio-economic and environmentalneeds
To leverage competence-led
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2. Collective BUSINESS or
INDUSTRY-WIDE alliances
To create industry-wide, self-regulatory standards, guidelinesand practices Equator Principles; WolfsbergPrinciples; Sustainable Agriculture Initiative;
International Council of Mining & Metals
To increase scale and reach ofprojects at a national level South Africas Business Trust; Thailand Business
Initiative for Rural Development; Chile Mining Cluster
To advocate for progressivechange - Global Business Coalition on HIV/AIDS;Business Action for Africa
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3. Collaborative MULTI-
SECTOR alliances
To co-create and spread morebroadlyaccepted norms andframeworks and standards:Marine Stewardship Council; Partnership for QualityMedical Donations; Ethical Trading Initiative;
Extractive Industries Transparency Initiative; UN GlobalCompact; National industry charters and covenants
To leverage public and private
resources to deliver essentialservices or advocate:Global Alliance for Improved Nutrition
Global Fund for HIV/AIDS Red Campaign
USAIDs GLOBAL DEVELOPMENT ALLIANCE
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HOW
can we build more
effective alliances
to meet both
business and social
goals?
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Partnership challengesOperational obstaclesOvercoming mutual mistrustBridging differentapproaches, languages, andtime horizons
Addressing power dynamics
Managing unrealisticexpectations
Risks to reputationPossible conflicts ofinterest
Lack of appropriate skills
Measurin im act and value-
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Partnership challenges
Operational obstacles
Strategic dilemmas
- Achieving scale
- Issues of accountability and
representation
- Alliances should not
replace government
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Critical Success
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Critical Success
Factors PURPOSE:Know
your goal. Know
your partners
PROCESS: Knowyour role and how
to communicate
PROGRESS:Know how to
evaluate, when to
celebrate, adapt or
exit
Invest time up-front to understand
partners capacities, constraintsand goals
Consult key stakeholders /
beneficiaries
Agree clear and common goals based
on mutual benefit
Clarify ground rules, roles
/responsibilities
Role of intermediary leadership or
broker
Communication - regular,
transparent, accountable, structures
for decision-making and conflict-
resolution
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PEOPLE !
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PARTNERSHIPS as a useful tool
to harness necessary
resources and stakeholder
support to tackle complex
business and sustainability
challenges in a mannerthat either
protectsexisting valuecreatesnew value
facilitatessystemic
a ques on o us ce
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a ques on o us cesecurity?
.a moral case AND an economic
case?
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f h
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Defining Partnership
Partnerships are voluntaryagreements in whichparticipants agree to work
to together to achieve acommon purpose or undertakea specific task and to share
risks, responsibilities,resources, and benefits.
Nelson: Building Partnerships (2001)