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Trends in Partnerships

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Speech by Bill Novelli, McDonough School of Business, Georgetown University

2016 Points of Light Corporate Service Counsel: Social Capital Conference

Change is happening, faster and faster. As we meet here today, the world is changing around us. The digital world is growing exponentially. Audiences are more informed than ever before – but not better informed. There are more channels to reach stakeholders, but it is harder and harder to really communicate.

World populations are growing older, not just in North America, but everywhere. The graying of the industrialized world has significant implications for health and economic outlooks.

South to north migration here and in Europe and elsewhere is disrupting societies. Major threats, including war, pandemics and climate change are before us. Economic uncertainties are disrupting markets.

All this is creating substantial change. And there are other causes, as well. One that we are all familiar with is the idea that those in pain, eventually gain. That is, groups on the bottom of the social order, or in distress, get or create an opportunity and break through. Civil rights, women’s suffrage and feminism, and marriage equality-- are all examples.

Change also comes about though classic heroic leadership. Candace Lightner and Mothers Against Drunk Driving, William Wilberforce, Nelson Mandela, Martin Luther King and others are powerful examples.

All these things cause change, and often in combinations of shifting resources, technology, economics, demographics and leadership.

Good fortune plays a role, of course, but we can’t count on it. A story in the Washington Post a couple of years ago asserted that a newly discovered bacterium is apparently eating much of the oil spill in the Gulf of Mexico. But no such luck; the story turned out to be false. We’ll have to do it ourselves.

I have a favorite saying, a haiku: “Problems worthy of attack, prove their worth by attacking back.” These are the big, tough, nearly intractable challenges that are addressed in the UN’s Sustainable Development Goals and elsewhere. Solutions to these problems don’t result from sitting on our hands, and muddling through is not a strategy.

You corporate executives here today are developing and engaging in strategies for your companies, for business overall and with civil society and government to create social collaborations for good. That is, to contribute to positive social change in a way that advances your corporate goals and creates business value.

This business value includes : improving how shareholders view your corporate performance; increasing revenues and reducing costs; enhancing your competitive position; deepening customer relationships; and improving the commitment and engagement of your employees.

An example of a company recognizing these opportunities is Philips, which says, “As a global health and well-being company, we firmly believe that the challenges around the health and well-being of our planet offer substantial business opportunities, creating value for our company as well as society at large.”

Another example of this self-enlightenment approach is seen in a report issued by the U.S. Chamber of Commerce Foundation, which states, “The circular economy offers a wealth of opportunity for the…business community. ‘Trash to Treasure: Changing Waste Streams to Profit Streams’ shares new findings on how, by reducing and eliminating waste, businesses can increase profitability, boast efficiency and unleash innovation.

The opportunity to create business value through creating societal value – with many stakeholders benefiting -- is one of the most powerful forces driving growth in the global economy.

Margaret Mead, the anthropologist, famously said that we should “never doubt that a small group of citizens can change the world. Indeed,” she said, “it’s the only thing that ever has.”

That may be true, but in today’s world is it is especially true if that small group becomes a very large group, a network of power and persuasion. I think we all realize that no sector – public, private or civil society – is big and strong enough to solve the huge societal problems of today.

Partnerships and alliances across sectors, with multiple stakeholders, can make a lasting difference. The topic today is where partnerships are heading, what good partnerships look like, and how to make them better.

I have worked in many partnerships across sectors, including with the Business Roundtable, the National Federation of Independent Business, labor unions, public health organizations, federal and state governments and companies in many industries. Some of these partnerships have been led by nonprofits, some by government and some were alliances of business interests. Most were cross-sector. A few of them were truly collections of “strange bedfellows.”

Currently, I co-lead C-TAC, the Coalition to Transform Advanced Care -- a national alliance of health insurance companies, hospital systems, consumer organizations, faith-based groups and others – to reform advanced illness and end of life care in the United States.

And at Georgetown, in our Global Social Enterprise Initiative, we partner with numerous companies, including our founding partner, Bank of America, and across all sectors to address such challenges as economic development, hiring and retaining persons with disabilities, financial security for disadvantaged older people and international development.

From my vantage point, I’d like to offer you six trends that I believe are taking shape in partnerships today. Not all of them are especially positive, and they won’t affect all alliances, but I hope that they will be of interest and value as you continue your work to advance your organizational goals and make the world a better place.

  1. Many partnerships will get bigger, more complex and potentially more effective.

Not all partnerships will expand, of course. There will always be effective one to one relationships like the Centers for Disease Control working with Lysol on public hygiene. But as organizations ambitiously scale up, they will naturally expand their alliances. For example, KaBoom! is moving from what they call “transactional” to “transformational” partnerships as they grow from only building playgrounds to engaging whole cities in playability.

At the local level, Blue Zones, working with Healthways and Gallup, is cultivating entire communities, some 23 across the country at current count, working with companies, schools, religious institutions and city government to build healthier communities and help people live longer and better lives.

But the really big endeavors, like the UN’s Sustainable Development Goals -- to end poverty, protect the planet and ensure prosperity for all -- can only be tackled with very large, well resourced, increasingly complex partnership structures that are extensive cross sector, network collaborations.

These have always existed in one form or another. The National High Blood Pressure Education Program in the U.S. many years ago was an example. The UN treaty on tobacco control is a multi-country collaboration. But now I think we are going to see and be part of bigger collectives, with greater collaboration among many sectors to achieve impact.

These are difficult to build and maintain, but have enormous potential if they are well managed, with adequate resources and expertise, and if organizations can achieve their own objectives as well as the collective objectives. In addition, there must be adequate levels of trust, means of conflict resolution and a minimum of bureaucracy.

These expanded, high potential partnerships aren’t going to work just because they’re big, but only if they can combine the best of each sector and what each can bring to problem solving on a massive scale.

  1. Corporate employees will be even more involved in partnerships for good.

Corporate volunteers and employee engagement strategies are already built in to many partnerships. We’re all aware that talented people gravitate to organizations that offer the opportunity to be entrepreneurial, to achieve, to excel and to feel positively about where they work. These employees are essential to business success.

Many, if not most, of these employees have a strong desire to participate in doing well by doing good. They are willing to volunteer and they have valuable competencies to bring to bear. Towers Watson reported that these employees are connected to the organization on the basis of commitment to achieving work goals, a supportive environment for productivity and the promotion of well-being.

Most of you are already involving your employees in social partnerships. The challenge will be to make even more and better use of what they have to offer, for their good and for the good of the company. This is a two way street. A corporate executive of a Fortune 500 company told me that it’s about helping employees to integrate a social agenda into their day-to-day work on behalf of the company. And it’s also about holding employees accountable for social behavior.

These “bigger-than-self” approaches are what employees want, and they can have a powerful impact on performance. A University of Virginia/University of Washington study says that this applies not just to individuals, but to enterprises as well. Connecting to a sense of values and purpose is a powerful force.

I work every day with your future employees; in my case, MBA students at Georgetown. Our Global Social Enterprise Initiative has many student leaders, and even more students who come to our events and participate in other ways. These millennials want --perhaps “demand” isn’t too strong a word – to be involved and to take pride in where they will work.

I know you realize this and are recruiting them with that in mind. For example, Morgan Stanley recently asked that I inform our students about their 2016 Sustainable Investing Challenge, for graduate students to develop an institutional-quality investment vehicle that aims to achieve positive environmental or social impact as well as competitive financial returns. There’s substantial prize money, which by the way, is still an excellent motivator.

Recently I moderated a meeting of our students and some of our corporate partners, including CSX Transportation, BD, Thrivent Financial, United Healthcare, Corning, Proctor & Gamble, Aetna and Rockwell Automation, among others. The discussion about what students want and what companies have to offer in terms of combining business and social value was candid and enlightening. And it showed a lot of congruence. Companies and future employees realize that this is needed, growing and powerful.

  1. Persuasion skills among partners will improve and be more effective at social behavior change.

I started my career in marketing at Unilever, went to a big ad agency and later began to apply marketing to social change. At first I focused on individual behaviors, but came to realize that to create sustainable social change, you have to also focus on behavior at broader levels; that is, on social norms and expectations. So we need to create behavior change at two levels.

One is on a broad environmental scale, so that appropriate behavior is seen as normative behavior. This means influencing the environment in which people actually live and work and play. Take world-wide non-communicable diseases, for example. We want healthy behaviors related to good nutrition, not smoking and physical activity to be seen and widely accepted as the normal thing to do. The most effective tools for achieving this, I believe, are policy, technology and media,

The second level is to focus on people’s individual behaviors: to inform, educate and persuade them to take the proper steps to good health. This usually requires community level work, through teachers, employers, parents, clergy and other interpersonal channels.

These two levels – environmental and individual change – aren’t options and they aren’t sequential. They are synergistic and need to be planned and pursued that way.

I see partnerships and programs becoming more skilled at the practices and tools of social persuasion, and as we get better and more effective, the strategies, messages and evaluations for one issue can be studied and applied to other programs and interventions.

This is a promising area for consumer research and for communications, and companies can bring a lot to the table.

4.Public policy reforms and therefore policy advocacy will become increasingly important.

Companies have long engaged in public policy, directly through corporate channels, via trade associations and through partnerships. Now even more companies are getting involved. A recent New York Times article said that today’s tech companies, even the youngest ones, have accepted lobbying as an essential part of doing business.

Businesses engaging in public policy are an essential part of our democratic political system. Companies usually focus on policy issues closely related to their industry and business interests.

But more and more, companies are also advocating for policy change concerning overarching social and environmental issues that go beyond their specific industry and corporate interests. For example, there is a CEO coalition working to reduce the U.S. national debt and deficit. And Apple, McDonald’s and Marriott have been engaged in urging Congress to modernize America’s immigration system.

Candi Wolff, EVP for Global Government Affairs at Citigroup, talks about the importance of integrating her company’s public policy and social responsibility.

In my view, as collaborations for good expand and become more effective, in countries and across continents, policy advocacy will become even more important as part of the strategic mix.

The Bloomberg Foundation supports the Campaign for Tobacco-Free Kids to train and nurture local advocacy organizations in many counties, including Russia, China, Brazil, Kenya, and others to reform policies to reduce tobacco use. And now they are branching off into other issues, including road accidents. In these programs, companies are always welcome, although not yet a major part of the effort.

 

There are risks involved in companies engaging in public policy advocacy as part of social programs. Issues, no matter how much they are part of the public good, can be politicized.

Companies have to weigh these risks, and won’t always want to be part of this aspect of social change. But many will. In C-TAC, our coalition to reform advanced illness and end of life care, many of our corporate partners are essential players in our advocacy initiatives.

Our business school at Georgetown and the Bipartisan Policy Center are holding a roundtable discussion next month on evaluating policy advocacy. A number of companies, nonprofits, foundations and others are involved. If you are interested, please let me know.

5.Expect attacks and criticisms (no good deed goes unpunished).

My uncle, a bombardier in World War II, says, “If you’re not taking flack, you’re not over the target.” That pretty much spells it out. There are the usual criticisms of companies engaged in social responsibility programs, including charges of hypocrisy, self-interest, a thirst for  publicity, green washing, the misuse of corporate resources and so forth.

Then there are the attacks on companies working on positive social change and at the same time pursuing sales of products that may not measure up to social standards. Examples are PepsiCo, McDonald’s, Burger King and so forth. They may be promoting health messages to kids, but, critics say, “Look at what they’re really selling.”

We also have companies doing good works, such as Coca Cola’s clean water initiatives and their shared impact programs in Brazil and Peru and elsewhere, but at the same time being attacked for an unrelated issue that makes even the shared impact programs suspect. In Coke’s case, the attack is for setting up a kind of astroturf initiative, the nonprofit Global Energy Balance Network, to further the company’s interests regarding obesity and nutrition.

And then there are the attacks on nonprofits for collaborating with companies and industries at all, under any circumstances. The Nature Conservancy came under fire for sleeping with the enemy when it was disclosed that they had partnered with shale oil fracking companies. And the American Heart Association was criticized for working with soft drink companies to get full calorie beverages out of schools.

Some of these are one-week stories. Others are low-grade fevers that burn on and on. The digital world can prolong just about anything. Attacks and criticisms will continue whether or not companies engage in coalitions and collaborations for good. You can be prepared, and have contingency plans for your organization and your partners. But as you step out and engage, and become visible in doing so, attacks and criticisms will potentially increase.

6. Leadership, always critically important, will become even more so.

None of this will happen without leaders who are willing to engage, to work together for the common good and to see big picture opportunities at global, national, state and local levels.

We’ve always needed leadership, of course. Every organization benefits from strong leaders. Someone once said that leadership is the cause, and all else is effect. But as wide-ranging partnerships across sectors become more the norm, leadership will drive collective engagement and common cause.

This doesn’t mean that corporate leaders should abandon their own companies’ mission and goals; far from it. But it does require corporate leaders who can adapt the core strengths of their business to social and environmental opportunities to do well by doing good.

It’s a cliché, but vision is imperative to create large-scale social change while at the same time keeping each organization’s own goals intact. From a corporate perspective, it calls for a commitment to operate successfully at the intersection of financial, social and environmental value. And it requires a willingness to enter cross-sector partnerships and the public arena.

Corporate leaders of this stripe have a deep appreciation of social issues and needs, and the ability to see across and manage business and social value.

And clearly, we need government leaders in partnerships for good. Government and quasi-government can help catalyze, finance and support broad change. For example, the White House, with the support of USDA, Treasury and other agencies, is planning a conference on impact investing in which Georgetown expects to play a role. This government leadership  encourages all sectors to be involved.

As for nonprofit leaders, they have these collective visions in their DNA. It’s how they must operate. Leslie Crutchfield, who co-authored Forces for Good: the Six Practices of High-Impact Nonprofits, found that leaders in this sector must move beyond thinking just about their organizations to thinking about the entire movement.

But it’s in the private sector that collective leadership can make new things happen. And let’s be clear; while we need corporate leaders in the C-suites, one can also lead from anywhere in the organization.

Colin Powell asked this question: “Have you ever noticed that people will personally commit to certain individuals who, on paper or on the organization chart, have little authority, but instead possess…drive, expertise and genuine caring for teammates?” He’s right, and that’s leadership. It’s not necessarily about seniority, position in a hierarchy, or titles.

So, in conclusion, the world is changing rapidly, and managing social change is far better than having it manage us. The opportunity to create business value though creating social value is a powerful force for companies today. Increasingly, it will require the commitment and skills of participating in cross-sector collectives for good.

And as this progresses, many of these partnerships: will get bigger and more complex; corporate employees will be even more essential participants; we’ll get better at socially positive behavior change; public policy will be an even bigger strategy in the overall mix; attacks and criticisms will accompany these initiatives and be directed at all sectors; and leadership – as important as it is today --will be even more so tomorrow.

The bottom line of all this is a comment by the management guru, Peter Drucker, who simply said, “It’s about changing people’s lives.” 

Thanks very much.