February 28, 2018

Cross-sector partnerships: will corporates step up?

What will motivate corporate Australia to step up to systems change in its cross-sector partnerships? Five questions provide a road map.

Cross-sector partnerships – partnerships between business and social purpose organisations (SPOs) which are set up to address common societal aims – are a firmly entrenched part of the social purpose sector. Examples of cross-sector partnerships in action are plentiful, and both business and SPOs value them highly.

The unique combination of skills and networks in cross-sector partnerships has the potential to be a powerful force in effecting systemic social change.

… if… big businesses and SPOs are keen to elevate the role of cross-sector partnerships, why isn’t it happening more?

However, a recent university research project has shown that Australian cross-sector partnerships are not currently fulfilling this potential.[1] The research found that, for the most part, the role of cross-sector partnerships is being viewed as a ‘transactional’ vehicle for organisations to implement their own objectives, rather than having a broader role to play in creating systemic social impact.

Encouragingly however, the research found that there is a genuine and growing desire by big business to play a broader role, and that SPOs are keen to experiment with new ideas around cross-sector partnerships. This creates a huge and real opportunity for big businesses to step up and be involved in creating widespread social change.

Some organisations have already recognised and acted on this – for example the Woodside Development Fund, which was set up to focus on a single systemic issue, and the Macquarie Group Foundation’s catalytic funding for collaboration in the cancer research sector.

But if the research shows that big businesses and SPOs are keen to elevate the role of cross-sector partnerships, why isn’t it happening more?

The research uncovered practical issues that need to be overcome – the need for a shared discussion space and evidence of best practice, and the challenges of multi-party collaborations. However, even before these issues can be addressed, it seems we need a better understanding of how to inspire more Australian businesses to move out of their ‘transactional’ comfort zone.

This article poses a series of questions for SPOs to ask their private sector partners, and for businesses to ask themselves, to stimulate critical analysis of what will motivate businesses to become key players in creating systems change.

The changing social landscape

After operating for many years with a separate business, public and social sector, the distinction between them is increasingly blurred, forcing new ways of thinking for both the social and business sectors. New concepts have developed which acknowledge that both sectors have an increasingly shared interest in seeing positive social impact. Concepts such as shared value, collaboration for impact and the United Nations Sustainable Development Goals seek to recognise the role of business in achieving sustained systemic social change.

The blurring of the sectors and the rise of these concepts have created the perfect environment for cross-sector partnerships to play a role in creating effective, scalable and long-term social impact. However, the results of this research project suggest that this is not yet mainstream. We need corporate Australia to be forced to re-think its role in society and to embrace the notion that the health of a business is intrinsically linked to communities and society.

Incentivising corporate Australia

Experience would suggest that this is unlikely to happen without there being strong incentive for the private sector to do so. We need to better understand what incentives are going to be meaningful enough to motivate Australian businesses to step up and take cross-sector partnerships to a systems-changing level. And then we need to create them.

One of the key findings was that businesses have an incredibly wide variety of reasons for entering into cross-sector partnerships…

This requires an in-depth analysis of why businesses enter into cross-sector partnerships, what value they derive from them and how creating more cross-sector partnerships committed to changing the system can enhance that value.

Findings from the research project provide some preliminary answers, as the research explored concepts of value, motivation, expectations, roles, challenges and opportunities relating to cross-sector partnerships.

One of the key findings was that businesses have an incredibly wide variety of reasons for entering into cross-sector partnerships, with no two businesses listing exactly the same motivations.

In some instances, motivations were similar within sectors – for example, organisations within the mining industry cited having a social licence to operate as a key motivation for entering into cross-sector partnerships, whereas organisations with a retail consumer base were more focused on brand related reasons.

However, more importantly than this, the research found that motivations tended to be organisation-specific (even within sectors), in some cases not related to creating social impact, but instead to benefits for the particular business. Motivations included: to enhance business goals and values, to create a social licence to operate, employee engagement, brand-related reasons (including brand enhancement and brand awareness), transfer of skills and expertise, to create a point of differentiation from competitors and, in some cases, to implement social objectives in a corporate strategy.

In understanding how to incentivise deeper engagement by business, it is therefore key to recognise that:

  • the ‘private sector’ is not a single entity, but that each and every private sector partner has different motivations for entering into cross-sector partnerships; and
  • incentives will only be effective if they address the organisation-specific needs of partners from the private sector.

More work therefore needs to be done with individual organisations to draw out a greater understanding of how we can promote their deeper and more systemic involvement by addressing their organisation-specific needs through the creation of social impact.

The following five questions can be used as a starting guide. They are designed both for businesses to ask themselves and for SPOs to ask their existing business partners:

1. Why do you enter cross-sector partnerships?

Ask the organisation to list their top three reasons.

2. What business value do cross-sector partnerships create?

For each reason above, ask the organisation to consider how it translates into business value – are the reasons for entering into cross-sector partnerships linked to drivers of key business decisions? If not, should they be?

3. Would a long-term approach to cross-sector partnerships enhance this value?

Ask the organisation to identify ways in which the value to its business would be enhanced by collaborating more deeply, more long-term and more systemically with the social sector.

4. What internal barriers need to be overcome?

Ask the organisation to consider what changes are needed internally for this value enhancement to be recognised and acted upon?

Many organisations interviewed for the research project cited internal barriers as a key challenge to developing longer-term cross-sector partnerships.

5. What external factors would drive change?

Ask the organisation to consider whether there are any external pressures that, if applied, would motivate it to collaborate more deeply, more long-term and more systemically with the social sector – for example regulatory pressure, actions of their competitors?

Conclusion

The changing social landscape suggests that cross-sector partnerships can be more innovative and impactful than they currently are. The research results suggest that business and SPOs are both ready to experiment with new, deeper and broader approaches and highlights the need to find the pressure points for business to engage more systemically with social issues.

The questions above provide a roadmap for SPOs and their private sector partners to use in their discussions to promote a deeper understanding of what cross-sector partnerships might achieve. If leaders can use these questions to increase their sphere of influence, it may be possible for cross-sector partnerships to unlock the ability for the business and social sectors to jointly drive systemic change.

And it might just be good business too.


Notes

[1] Cross-Sector Partnerships: Helping the business and social sectors to achieve positive social impact by Natasha Morris and Lynette Ryan as part of the University of New South Wales Graduate Certificate of Social Impact. The research was conducted using an interview-based methodology across 14 businesses, 8 social sector organisations and 4 social sector practitioner organisations.


About the author

Natasha Morris has nearly 10 years’ experience in social impact, across venture philanthropy, impact investing, policy and strategy. She recently completed this research project as part of the UNSW Graduate Certificate in Social Impact, and is currently the Chief Operating Officer of The Centre for Evidence and Implementation (CEI). CEI is co-hosting the Global Evidence and Implementation Summit 2018 in Melbourne, 22-24 October.