In theory, cross-sector partnerships should excel. Each partner should be able to bring expertise and resources to the table that complements the others. In practice, though, such partnerships are often hamstrung by the other differences between the sectors: differences in priorities, accountabilities and culture.
The cost of mistakes can be staggering. In Lesotho, for example, the government has trapped itself in an 18-year contract for a hospital that takes more than half its entire health budget every year.
Apolitical recently brought together a panel of experts to discuss how to avoid these pitfalls and get a partnership right. The discussion was led by Sriven Naidu from the Singapore Management University’s Master of Tri-Sector Collaboration programme. He was joined by Christy Davis, Executive Director at Asia P3 Hub, and Bruno Occhipinti, Director of Strategy and New Business Development at Phillips, as well as participants from across the globe.
Three main lessons emerged from the discussion: contracts, trust-building and communication.
1. Contracts: metrics, milestones and exit routes
Partnerships require commitments from all parties—everyone must have some skin in the game. Both risks and rewards need to be shared, and the bond that links the partners should be both legal (to limit downside risks) and ideally also personal (to maximise upside potential). Neither one alone is enough to drive a successful partnership.
On the legal side, appropriate metrics are essential—as is a sensible roadmap with periodic milestones to measure performance against. Of course it is impossible to predict the future perfectly, but a greater degree of systems thinking – assessing how the partnership fits into and is affected by the wider industry and economy – would go far to ensure that contract requirements are sensible, and are met.
In this regard, a flagship hospital built and run in Lesotho by a cross-sector partnership makes for a cautionary tale. The contract states that the hospital will treat up to 20,000 in-patient admissions annually. But this number turned out to be far too small—and the government has to pay extra for any additional patients served. Now, more than half the country’s entire health budget goes on a hospital that serves only a third of the national hospital demand. Costs are spiralling—and the contract runs for 18 years.
While in the early stages of a partnership it may seem cold-blooded to be talking about failure, it is essential to have a frank and open conversation about all eventualities. All partners should have clearly defined exit routes in case the partnership is clearly not working out. Before then, there should be opportunities to revise the contract as circumstances change—and all stakeholders ought to be represented in those discussions.
2. Trust: the engine of a partnership
Trust is a prerequisite for successful partnerships, and a balanced contract requires honest input from all sides. First, partners need to see each other clearly: their past records, present projects, and future aspirations. Do they have history in the field? How does it fit into their portfolio of projects? Does it tally with the kind of organisation they aim to be? Only when they have the answers to these questions will they know if the other is a suitable partner for them. Ultimately, partners don’t always need to share the same exact goal—if they are a good match, complementary goals can suffice.
3. Communication: sensitivity to language, culture and priorities
Through it all, communication is the essential ingredient. Sensitivity is the key to this, because every sector has its own language and its own culture. Each partner needs to be aware that their counterparts might interpret the facts, and how they are expressed, very differently.
Equally, partners must be aware of each others’ priorities and accountabilities. The private sector might have evolved over the decades, but profit is still the main objective—and, frankly, one would not want to work with a private company whose main objective wasn’t profit. Pursuing profit is what has given the private sector the skills it can bring to the table. Public partners need to be sensitive to this ultimate priority; just as private partners must be aware it’s not the same on the other side.
The Apolitical View
The differences between sectors are what should make them ideal partners: each can bring something new to the table. But those differences bring their own problems, too: different cultures, priorities and accountabilities, often with a whiff of mutual suspicion. Successful partnerships, then, are built on trust, communication, and considered contracts. Of course even the best preparation cannot stop surprises happening—but it puts the partners in a far stronger position to ride them out.
(Picture credit: Pexels)