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Volume 16, Number 4: Faculty Focus
April 2010

Listen to a 6-minute interview with Oana Branzei and Marlene Le Ber on non-profit and for-profit organization partnerships   Listen (6.1MB)   Subscribe

Born out of a shared interest in a current problem, non-profit and for-profit organizations are partnering up in order to achieve social goals. Ashleigh Nimigan recently sat down down with Oana Branzei, Assistant Professor of strategy at the Richard Ivey School of Business, and Marlene J. Le Ber, PhD Candidate and Lecturer at Ivey to discuss these unique partnerships, how they work, and how they can best work together and achieve their goals. Ashleigh started by asking them if cross-sector partnerships between non-profit and for-profit organizations a relatively new thing?

Marlene J. Le Ber: We know that in the media, it really took off in the early 90’s with Greenpeace looking at ozone free refrigeration and they collaborated with a for-profit organization.

Oana Branzei: If you were holding a Starbucks cup, you would also be able to see that some of the successful alliances have been around for at least 10 years. The family of cross-sector partnerships are part of strategic alliances. They tend to bring organizations to work together to achieve a social goal. They typically engage in what we call social R&D. They want to get behind a current problem and find a collaborative solution that does not yet exist in the domain of either the for-profit or non-profit organization. The best way to think of this cross-sector partnership is as social R&D. They create new solutions to old problems.

Q. What are some of the benefits or outcomes when non-profit and for-profit organizations work together?

Oana Branzei: The great benefit is that it changes who they both are by accomplishing greater social good as well as greater profitability. The alliance between Conservation International and Starbucks has had a very rocky history but it’s also being credited for accomplishing significant change in the lives of coffee farmers around the world. That is a great example because they stuck with the partnership and they stuck with it through the tough times of controversy and animosity and they were committed to a goal that neither organization could achieve on their own. So in short, when for-profit and non-profit organizations get together they can pull together sets of resources and capabilities that neither organization on their own can have access to. The trick is, as in often the case with strategic alliances, those benefits are very hard to see ahead of time. Uniquely to the cross-sector partnership often times it takes years of getting together to get over the cognitive barriers and the difference in values, and the difference in expectations and the difference in evaluations, so that people can actually pull the social resources together for the greater good.

Q. What are some barriers to the success of these partnerships?

Marlene J. Le Ber: Fundamentally, the non-profit and the for-profit organizations are quite different in their logics, how they think about the work that they do, how they go about doing their work, and what their bottom line is. One [for-profit] is typically, traditionally, very oriented to the bottom line, the financial bottom line. The other [non-profit] being not as concerned and being more concerned just about their social mission. So you have these differences in how they’re structured, what they value, what the bottom line is, and how they actually do business.

Early successes of the partners seems to hinge on either, selecting the right partner - are they willing to look at cooperating and listening to the other party or what we’ve called relational risks - the ability of the partner to predict the potential outcomes of the alliance. So there needs to be a fair bit of flexibility on both partner’s side. They need to evaluate each other, listen to each other and then continue to adjust. Some of the things that we found made a difference in terms of success or getting back on track after things seem to derail a little bit, has to do with the relational attachment between the two parties. Also, that things aren’t taken for granted - that there is a continual investment in the partnership.

Oana Branzei: Strangely enough, the greatest barrier is the goal. If people are impatient with the goal, these partnerships fail very early and very bitterly. Because both parties tend to value the strategic goal at a personal level, which is not often the case when you have alliances between biotech and pharma, for example, it is much easier for the strategic decision makers involved to disconnect themselves from the business deals themselves. However, in this case, you are talking about saving lives, about changing lives, about children gaining access to education, about healthier food or safer products or just a new way of living or conceptualizing consumption in some cases. So here you are dealing with things that people value at a personal level. They tend to be less patient and more consumed by the need to accomplish this goal. But unfortunately often times these organizations because they are so different to begin with approach this goal from very different vantage points. And when they lock into this goal they can create some sparks! Those sparks can create huge fires, which are hard to put out, again because these are things near and dear to everyone’s heart. In any marriage, if the fights are overcome, then the partners can develop a deeper awareness for each other’s priority and they can figure out where their synergies lie. And that creates a basis for imagining combinations to get to that goal that would have been closed to both of the partners before hand. So in very short words, the biggest barrier is wanting to get there one’s way, very fast.

That was Oana Branzei, Assistant Professor of strategy and Marlene J. Le Ber, PhD Candidate and Lecturer, both from the Richard Ivey School of Business.