Question #5: Key lessons to keep in mind when working with the private sector

[Meg Buckley, ACDI/VOCA]

This is a question for everyone to respond to, including experts and participants:

What are key lessons that development partners should keep in mind when working with private sector companies to achieve shared-value goals?

Looking forward to the conversation!

[Ovidiu Bujorean]

Thank you, Meg. I would also include the importance of quick wins to get the ball rolling, in the implementation process. Quick wins will help the projects build trust in the project and also perhaps discover new areas of opportunity.Achieving shared goals, will help build a foundation for further collaboration, as more trust is formed between the involved parties.  

[Getaneh Gobezie]

Dear colleagues

I read the exchanges so far with great interest!

In Ethiopia, CARE’s Livelihoods for Resilience Activity developed a comprehensive Gender Strategy which incorporates a microfranchise initiative called Hulu Bedeje (an Amharic phrase meaning ‘’All at the Dorestep’’), through which the project partners with private sector actors and wholesalers, and sets up female project Agents (through training, initial equipment, and linkages to wholesalers) as microfranchise saleswomen. These women go door to door in their villages, selling fast-moving consumer (industrial) goods such as laundry soap, iodized salt, and hair products, as well as solar lamps. …. The project was able to pair savings groups with agribusinesses and agricultural extension to improve production and reduce malnutrition…. 

This expanded profitable business for women, while bringing consumer good accessible to rural people, in many cases ‘’creating new demand’’ for such goods. The availability of such industrial goods is also supposed to ‘’inspire’’ or ‘’incentivize’’ rural people (often assumed to suffer from what is known as ''Aspiration Failure'') to acquire such goods, and devote more hours of work to earn income for purchasing them. …. In fact, during the socialist Derg regime 3-4 decades ago, cooperative shops were expanded throughout rural Ethiopia -- one of their key objective being inspiring rural people to earn more income to be able to enjoy new life-style using such industrial items.

This, however, require serious dialogue to promote public-private dialogue.

Looking forward to read more!

Thanks and Regards,

Getaneh

[Gloria Enwema]

Some of these lessons development partners should keep in mind are:

1. Alignment of Goals and Incentives: Development partners should ensure alignment of incentives with the private sector companies' objectives to achieve shared-value goals. This can be done by identifying shared goals, defining measurable outcomes, and establishing appropriate incentives for both partners.
2. Fostering an Enabling Environment:  By advocating for supportive policies and regulations, development partners can leverage its influence with government to foster an enabling environment for shared-value goals to be achieved with the private sector. These supportive policies, creates opportunities for collaboration of public-private partnerships in achieving set objectives.
3. Knowledge Sharing - This is key for the development partners and private sector to understand areas where objectives are misaligned and what commitments would be required from each stakeholders involved to achieve the goals
4. Monitoring, Evaluation & Learning Plan: Monitoring and evaluating progress is essential to ensure that shared-value initiatives are achieving their intended outcomes. This established system for monitoring and evaluating progress results to the learnings used to make adjustments and improvements when and as needed.

By keeping these key lessons in mind, development partners can work effectively with private sector companies to create sustainable and impactful shared-value initiatives that benefit both the private sector and society as a whole as well as satisfies the overall development objectives.

[Ydun]

Hi all - A few point to add to the conversation, based on recent experiences. Principles to keep in mind:

• Collaborative design: Focus on combining the private sectors perspective and resources as a means of addressing systemic challenges and achieving transformational outcomes. For example, instead of pitching a developed idea/activity to a company (more one-off or transactional), development partners should be looking to get the perspective of the private sector early on and along the way.
• Roles: There are a range of catalytic roles for development partners in private sector engagement, such as co-creator, risk mitigator, convener, facilitator, thought leader, advocate, investment catalyst or funder/investor. The approach to working with the private sector should depend on the market context and may change over time depending on changing market dynamics or private sector needs.
• Alignment and adding value: These two principles are critical in developing shared-value goals between development partners and the private sector. Businesses and development partners are coming at engagement with different incentives and value propositions, but we should have similar goals in mind to create value. Simply put, alignment means there is a clear business interest to pursue a development goal. Added value of a partnership comes if the private sector would not have engaged without public sector involvement (e.g. they are unwilling to implement the project due to perceived costs/risks seen as higher than the benefits) and/or the interventions increase the development impact and sustainability of a project. Gloria also highlighted the importance of alignment!

Thanks, 

Ydun