BUILDING INNOVATIVE

ALLIANCES TO
MAXIMIZE PRO-POOR
IMPACT
Jane Nelson

The Business and Poverty Leadership

Programme

Cambridge, November 15th 2006

n WHY invest time, money
and effort in building
alliances?
n WHAT type of alliances
are emerging and what’s
their potential?
n HOW can we build more
effective alliances to
meet business and
poverty alleviation goals
 POVERTY (Adapted from Shailaja Fennell)

 LACK of access to meet basic

needs
 LACK of opportunity to build
income and assets
 LACK of voice to participate
and influence decision-making
 LACK of security to cope with
crises

 MARKET-based solutions
 WELFARE-based solutions
From the working poor to the
destitute…
 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
 WHY
invest time,
money and effort
in building
alliances?
 Responding to
governance gaps
and failures
“The proper guardians of the public
interest are governments …”
The Economist, January 2005
 GOVERNANCE GAPS
 BAD governance
 WEAK
governance
 INDIFFERENT
governance
 UNCOORDINATED
governance
 Overcoming
market failures
and information
asymmetries
 Building and
sustaining
TRUST
and reputation
with NGOs,
Scandal … and…Suspicion
 Stakeholder activism … from
anarchists to activists to active
partners
 Edelman TRUST BAROMOTER
 2,000 opinion leaders in 11
countries over 7 years
tracking data
 NGOs MOST TRUSTED INSTITUTIONS

 Trust ratings over 50% in US

(up from 36% in 2001)
 Trust in NGOs increased
significantly in last 12
months in Canada, Japan and
China (from 36% to 60%)
NGOs dominate the big issues in terms
of trust
EDELMAN/Strategy One survey: June, 2004
Number of International
NGOs
50,000

28,900

176

1909 1964 1993 2000

 Strategies for
NGO/Community Engagement

 CONFRONTATION
 COMMUNICATION
 CONSULTATION
 COOPERATION
 Identifying and
managing complex and
fundamentally
new risks, new
expectations …and new
opportunities that
have an impact on
both business and the
1. Fundamental economic and
demographic shifts
2. Fundamental technological
change –
3. Fundamental ecosystem change
 4. Fundamentally new global
health challenges

 Diseases of
POVERTY
 Diseases of
AFFLUENCE
 Diseases of
INTER-
DEPENDENCE
 WHY ENGAGE & PARTNER?
n To increase trust, influence,
‘license to operate’ and
Legitimacy
n To share risks/burdens and
create 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
 WHAT
types of alliance
are emerging and
what’s their
potential ?
Different pro-poor business
strategies
(Source: Nelson 1998, 2001)
 Core purposes for
alliances
1. DO NO HARM - Minimize negative
impacts on the poor
Control 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, change the rules, shift
 KEY MODALITIES FOR
BUILDING ALLIANCES

1. Alliances at the
individual
company-level
2. Collective industry-
wide action
3. Collaborative multi-
sector action
 1. Alliances at the
individual COMPANY LEVEL
 Toimprove and account for
company’s own performance –
advice; research; assurance

 Toinnovate and create new

markets, business linkages,
products, services and
processes that meet socio-
economic and environmental
needs

 To leverage competence-led
 2. Collective BUSINESS or
INDUSTRY-WIDE alliances
 Tocreate industry-wide, self-
regulatory standards, guidelines
and practices –Equator Principles; Wolfsberg
Principles; Sustainable Agriculture Initiative;
International Council of Mining & Metals

 Toincrease scale and reach of

projects at a national level –
South Africa’s Business Trust; Thailand Business
Initiative for Rural Development; Chile Mining Cluster

 Toadvocate for progressive

change - Global Business Coalition on HIV/AIDS;
Business Action for Africa
 3. Collaborative MULTI-
SECTOR alliances
 Toco-create and spread more
broadly accepted norms and
frameworks and standards:
Marine Stewardship Council; Partnership for Quality
Medical Donations; Ethical Trading Initiative;
Extractive Industries Transparency Initiative; UN Global
Compact; National industry charters and covenants

 Toleverage public and private

resources to deliver essential
services or advocate:
Global Alliance for Improved Nutrition
Global Fund for HIV/AIDS ‘Red Campaign’
USAID’s GLOBAL DEVELOPMENT ALLIANCE
 HOW
can we build more
effective alliances
to meet both
business and social
goals?
Partnership challenges
Operational obstacles
– Overcoming mutual mistrust
– Bridging different
approaches, languages, and
‘time horizons’
– Addressing power dynamics
– Managing unrealistic
expectations
– Risks to reputation
– Possible conflicts of
interest
– Lack of appropriate skills
– Measuring impact and value-
Partnership challenges
 Operational obstacles
 Strategic dilemmas
- Achieving scale
- Issues of accountability and
representation
- Alliances should not
replace government
 Critical Success
Factors
Invest time up-front to understand
 PURPOSE: 
Know
partners’ capacities, constraints
your goal. Know and goals
your partners
 Consult key stakeholders /
beneficiaries
 Agree clear and common goals based
 PROCESS: Know on mutual benefit
your role and how
to communicate  Clarify ‘ground rules’, roles
/responsibilities
 Role of intermediary leadership or
broker
 PROGRESS:  Communication - regular,
Know how to transparent, accountable, structures
evaluate, when to for decision-making and conflict-
celebrate, adapt or resolution
exit
PEOPLE !
PARTNERSHIPS as a useful tool
to harness necessary
‘resources’ and ‘stakeholder
support’ to tackle complex
business and sustainability
challenges in a manner
that either
protects existing value
creates new value
facilitates systemic
 …a question of justice AND
security?
.a moral case AND an economic
case?
 Defining Partnership

Partnerships are voluntary

agreements in which
participants agree to work
to together to achieve a
common purpose or undertake
a specific task and to share
risks, responsibilities,
resources, and benefits.
Nelson: Building Partnerships (2001)