With environmental, social, and governance (ESG) issues increasingly in the mainstream, more companies are connecting sustainability to core business strategy—not just to make a positive impact, but also to drive growth.
Yet, even the largest global companies don’t have the assets, technical expertise, networks, or capacity to address today’s vast social and environmental problems alone.
Partnerships are a critical tool to help companies combat complex supply chain challenges, de-risk investment in nascent markets, and meet their impact targets.
Meanwhile, private sector partnerships are a critical focus for USAID. USAID currently has 750 active private sector partnerships worth about $60 billion—and it's looking to greatly expand this collaboration in the future.
In her New Vision for Global Development, USAID Administrator Samantha Power emphasized that USAID wants to “vastly expand the groups with whom we partner, especially the private sector, if we hope to make a sustainable difference.” Part of this push is a new centralized fund for private sector engagement (the USAID PSE Fund). This kind of fast and flexible mechanism will take time to establish and fine tune, but it could be game changing for company collaboration with USAID in the coming years.
Avoid These 5 Pitfalls When Companies Partner With USAID
Below, we share five common pitfalls that can get in the way of partnership success. Anticipating—and avoiding—these challenges will let companies partner with USAID (and vice versa) with greater ease and impact.
1. Failure to Align on the Scale and Scope of the Goal
Companies are looking to solve social and environmental sustainability challenges that affect their operations, the communities they serve and source from, and their impact goals. The good news is that many of these issues are deeply aligned with USAID’s global focus areas and priorities.
Having a shared challenge is a good start. But it’s important to make sure partners are also in sync in terms of the scale, scope, and nature of their objectives.
For example: Perhaps one partner seeks significant scale, but the other brings a laser focus on a particular geographic location or segment of the population. Or a company might prioritize quicker, cost-effective solutions, while USAID seeks to test deep interventions that may seed longer-to-realize results. Another business partner might have a rigid focus on its own supply chain or direct operations, while USAID looks to transform the wider sector.
There are many subtle ways that there could be a mismatch in the kind of change partners seek to spark.
First takeaway on avoidable pitfalls when companies partner with USAID:
When you partner with USAID, be ready to have honest conversations about the kind of impact—where, for whom, and on what scale—your company looks to create.
Partners can better co-create solutions that work for the private sector and for USAID by being upfront about vision and objectives. (For instance: A partnership can concentrate activities within a company’s global supply chain, while also proving the business case and testing new solutions to spark wider industry transformation.)
Learn How to Build a Sustainable Business Model
2. Failure to Build Something Together
When faced with difficult challenges, a natural instinct is to immediately jump to solutions.
Partners are no exception: It’s not uncommon for one party to come to the table with a solution already in mind and expect the other partner to provide the additional resources to make it happen.
However, the best partnerships are a give and take: They reflect the needs, aspirations, and unique strengths of each partner. And this means building something together.
Fortunately, USAID has designated co-creation as an Agency-wide priority goal. For instance, their Broad Agency Announcement (BAA) mechanism invites companies to research and develop innovative new solutions, together with USAID and other partners.
While the co-creation process isn’t always easy or straightforward, it provides the opportunity for partners to brainstorm and align on sectors, geographies, and new approaches that are more inclusive, equitable, and effective.
Second takeaway on avoidable pitfalls when companies partner with USAID:
Be clear about your company’s needs and constraints, but come to the partnership table with an open mind about how best to solve the problem.
3. Failure to Reconcile Differing Timelines
Another common pitfall when companies partner with USAID stems from contrasting timelines.
Companies must move quickly to keep up with consumer trends, sales numbers, supply chain efficiencies, and shareholder expectations. Meanwhile, development agencies like USAID focus on long-term, process-oriented engagements lasting several years or more.
While the time and funding requirements involved in partnering with international donors may feel intense by today’s corporate standards, it helps to enter new partnerships with realistic expectations about the road ahead.
Third takeaway on avoidable pitfalls when companies partner with USAID:
Companies should get upfront commitments and set realistic expectations with leadership about the amount of time it will take to launch and execute a partnership with USAID. This means frank conversations about timelines, constraints, and needs on both sides. It helps, too, to plan for quick wins and partnership milestones that will help companies, and USAID, lock in near-term successes that keep the partnership valuable and on track.
4. Failure to Evolve Over Time
Too often, partners focus their effort on designing and launching the partnership. But most partnership design flaws don’t become apparent until after launch.
That’s why the best partnerships discuss and document solid—but flexible—governance structures that will dictate how decisions are made when issues are escalated, and who the key decision-makers are. Partnership governance must balance inclusion against action, transparency with confidentiality. It must allow for iteration and strive for simplicity.
Over time, conditions on the ground may yield surprises or shift entirely, which can quickly derail a partnership that isn’t designed to adapt. As partnerships gain steam, teams must also prioritize sound and adaptive partnership management. Once the baseline research has been conducted and the strategy set, teams need to take action. This may require a different set of skills, from different team members, then what was needed to get the partnership off the ground.
Fourth takeaway on avoidable pitfalls when companies partner with USAID:
Anticipate setbacks by building flexibility into partnership governance structures and creating systems for adaptive management.
5. Failure to Get Buy-In from Local Field Teams
USAID and a company partner can design a stellar partnership at the global level, but if they’ve not adequately aligned with their local field teams, they'll hit trouble in implementation.
By “field teams,” we mean USAID’s country-level Missions, a company’s local offices or operations teams, and other critical local stakeholders that can make or break partnership performance.
For those partnerships that start at the global level, deep engagement with relevant field teams must be part of the partnership design and implementation phase, to ensure that the partnership adequately reflects needs, challenges, and realities on the ground. This engagement will also help the partners secure critical local participation and buy-in, to make a partnership on paper a real-life success.
Fifth, and final, takeaway on avoidable pitfalls when companies partner with USAID:
Consider who on your team will need to be involved, engaged, and committed to achieve your partnership goals. Then ensure that these stakeholders have a seat at the table in partnership design and in ongoing adaptive management. And further: If local teams are not sold on the partnership, pause and reconsider your plan—as weak commitment at the outset spells challenges ahead.
Moving Forward in Partnering With USAID
While partnership is never easy, there’s a reason it’s on the rise.
The challenges we face today are too complex and interdependent for any one entity to successfully go it alone.
Companies bring to the table substantial insight, innovation, and market know-how. USAID brings resources, powerful networks, and deep technical expertise. And we’ve seen how, through partnership, they can accomplish tremendous things, together.
At the most basic level, avoiding the common pitfalls we’ve outlined here comes down to (1) strategic and inclusive partnership design and (2) informed and flexible adaptive management. Getting these things right isn’t easy: At Resonance, we focus much of our work on helping companies and USAID make the most out of collaboration, across every stage of partnership development.
But the effort is worth it: By aligning on scope and timelines, building together, remaining flexible, and meaningfully engaging their local teams, companies can partner with USAID to meet shared impact goals today and into the future.
