Partnership 2.0: Redefining the Boundaries of a Sustainable Company

Partnership 2.0: Redefining the Boundaries of a Sustainable Company

Partnerships have been on my mind lately: it's nothing new, one might say, as partnerships are at the core of stakeholder-centered sustainable business. Yes, indeed, business-society collaborations have been catalyzing many sustainability initiatives, including a well known sustainable carpet collaboration between Shaw and Bill McDonough's MBDC company or company-secondary schools partnership that allows TerraCycle to packages its organic fertilizer into used soda bottles while giving schools a new option for fundraising.

Yet, with all of those innovative collaborations well appreciated, something qualitatively new has been happening in the world of cross-sector partnerships. Three examples serve to illustrate the point:

  • In Russia, the aluminum giant the SUAL Group (now a part of Rusal) has been facing a problem of diminishing labor force in remote and impoverished locations of the country as youngsters have been steadily leaving their home cities in search of a better life. In response to this trend, in 2001 SUAL Holding launched a partnership effort that was unprecedented for the former USSR.

    First, the company signed agreements between local plants and local municipal authorities to systematize development efforts in each region of company's presence. Then, SUAL partnered with USAID, an international development organization, to co-finance the program, and brought in nine nonprofits to co-design and implement comprehensive socio-economic development programs customized for each region of company presence.

    With activities focusing on ecology, economic self-reliance, education and local government efficiency, the project involved up to 30 partners at any given step of the process, with the facilitating role moving from one partner to another, and the company-sponsor serving as just one of the participants. At the end, local communities are getting a much-needed boost towards comprehensive and sustainable development, while the company continues to secure its ability to operate and prosper.
  • In the U.S., the "greening" of Wal-Mart is designed as a joint network-based venture, where the company starts each area of activity by setting up a "sustainable value network" -- consisting of a number of partners, suppliers, non-profit organizations, and other core players active in a particular domain of activity.

    The Seafood Network, for example, was set up in partnership with the Marine Stewardship Council (MSC), which, in turn, is a product of a collaboration between Unilever and the World Wildlife Fund (WWF) collaboration, it works on issues that lay primarily outside of Wal-Mart's organizational boundaries -- in the supply chain, local communities, and the world at large. By turning to the sustainable fishing practices, the retailer gets solid business returns in the form of secure supply of seafood for its growing consumer base, while, at the same time, addressing the degradation of marine biodiversity worldwide.
  • Across the globe, 861 people met for three days virtually and in 20 locations to respond to the American Society of Association Executives' and the Center for Association Leadership's invitation to explore how can professional associations serve as catalysts of positive change around the world.

    In other words, cooperatives of businesses came together to figure out how to partner with other cooperatives -- professional associations -- around issues of sustainability and responsibility. Facilitated by a third party, in this case the Case Western Reserve University's Center for Business as an Agent of World Benefit -- the project partners represent 287 million people through members of ASAE & the Center.

    What Makes a Partnership "2.0"?

    As I scan across these and other examples, few characteristics of this new, "version 2.0" approach to partnership for sustainability becomes evident:
    • Unlike the traditional focus on initiatives under business' immediate control, Partnership 2.0 invites a company to engage in activities well outside their organizational borders.
    • Unlike a traditional partnership where company has a clear controlling and administrative role, Partnership 2.0 has a more even distribution of responsibilities and power between collaborators.
    • Unlike a traditional collaboration that starts with well-defined terms, conditions, and expectations, 2.0 partners enter into a collaboration with large number of unknown issues and engage in true co-design of questions and solutions amidst uncertainty and development.
    So, why are we seeing such a significant transformation?

    Biology might offer us one answer. Scientists have long been debating around what constitutes life in an organism -- in other words, its sustainability. If a tree is cut but its cells are still active, would it be marked dead or alive? As Fritjof Capra suggests in his 2002 book “The Hidden Connections: A Science for Sustainable Living,” this scientific argument yielded only one distinction that separates alive organism from a dead one: its continuous healthy exchange with the environment.

    Similarly, in business a the company's life and sustainability is defined by its interaction with the environment it operates within -- that is, its physical, economic, political, social, and cultural environment. In the past, companies engaged in sustainability efforts by following their traditional partnering approach of command, control, and clear organizational boundaries.

    What we are seeing now suggests that the complexity and the systemic nature of sustainable development is finally waking us up to the need of redefining organizational boundaries, and, by default, organizational success. Bertrand Collomb, former chairman of Lafarge, perhaps said it best: “Business cannot succeed in a world that fails.” Could it be that we are finally getting ready to re-think the line between the two?

    Dr. Nadya Zhexembayeva is an MBA Program Director at IEDC-Bled School of Management, Slovenia, where she teaches course on sustainability and organizational design. Nadya also serves as an associate director for international networks at the Center for Business as an Agent of World Benefit, Weatherhead School of Management, Case Western Reserve University.
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