Cross Post: Is the Private Sector Misunderstood in Development?

By Lorea Russell – This originally appears on the Tomorrow Global blog.

David McGuire, President and CEO of The QED Group LLC, wrote a piece on Devex Impact last week about how the private sector was a critical but misused partner in development. Mr. McGuire talks about the “give us your money and we’ll do good things” attitude that a lot of NGOs have. Guilty as charged.

For a long time I saw PPPs as a way of getting a company to put in some money to kick in the USAID contribution, and not as a real partner. As I’ve started to work in the social enterprise sector, I’ve had to re-think and re-frame how I feel about business models being used to further development goals. That led to a rethink of my previous interactions with the private sector.

I have mixed feelings – I’m kicking myself for all the missed opportunities to engage the private sector in a meaningful way. I would never treat a donor or another partner like a check, so why would I treat a private sector partner that way? Mostly because I just assumed they didn’t actually “care” about the communities the way I did. I thought they just wanted to throw money at the problem so I could fix it and they could say they were making a difference.  In retrospect, these partnerships might have produced a lot more if I’d taken a different approach to communicating with partners – language, process, and definitions of success can make or break successful partnerships between the private sector and NGO partners.

Speaking a Common Language

Most things I’ve read about the private sector in development focus on how NGOs have to understand how to talk to companies in a way that engages them. This line of reasoning bothers me – there’s a lot of misconceptions on both sides. Is the private sector misunderstood as a development partner? Absolutely. Can the private sector be dismissive of NGOs?  Absolutely. As I’m beginning to learn corporate speak,  part of the issue is that we speak a different language even when we’re talking about the same thing.

I agree that NGOs have to be able to engage the private sector in ways that they understand (how partnering will help their bottom line), but the private sector also has to realize that a real partner has an equal responsibility to understand what makes the public sector tick.  We both have bottom lines – and they may not even look all that different.

Understanding Unique Processes

We have to learn how to talk to each other without getting frustrated halfway through the process. I currently serve as a translator of sorts between my company and its NGO partners. When I can explain why NGOs are doing things they way they are or asking the questions they are there’s always a look of relief because all of a sudden it makes more sense.

We have to accept that we have different ways of doing things, without thinking one way is inherently wrong or evil. We do things differently but that doesn’t mean we can’t work together towards a common goal. It does mean that we have to spend more time making sure expectations are clear from the beginning.

Finding Our Different – and Similar – Definitions of Success

What defines a successful partnership/project? Be prepared for these definitions of success to seem very different, but be willing to drill down to what those definitions actually mean. What strengths and weaknesses does each party have? Can one group use their strengths to mitigate the weakness of the other? For example, the private sector is fantastic at developing efficient systems, while many NGOs struggle with this- if having a strong invoice system will make your project successful then let the private partner design it.

This must all seem very obvious, and it is – but these conversations simply aren’t taking place. Instead, for the most part, we’re missing the opportunity to have some really amazing partnerships.

We can all keep working in our own corners, but we have nothing to lose and everything to gain by working together.  The fastest growing market for American companies is developing countries.  Roughly half of U.S. exports are marketed to developing countries. The more people we lift out of poverty, the more people who’ll be able to access those markets. Everyone wins – especially those we’re trying to help.