Partnership Structuring

When done right, cross-sector partnerships can be an incredibly valuable mechanism for improving development outcomes. However, navigating effective partnerships takes a lot of work. “Partnering is easy to talk about but invariably somewhat harder to undertake. It requires courage, patience and determination over time. It is rarely a ‘quick fix’ solution to a problem and can sometimes be a frustrating and disappointing experience - falling short of initial hopes and expectations. But it does not have to be this way.” – The Partnering Toolbook, The Partnering Initiative (TPI)

This module shares what we have learnt at Asia P3 Hub about how to structure partnerships for the greatest impact. We use a simple process that we call the 3D process: Discover, Design and Deploy.

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Tutorial

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Discover

Discover is the first partnership phase. Especially for multi-stakeholder partnerships, the first step is really about discovering and fact-finding.

There are two things we need to discover:

• Partnership Trigger and
• Asset Mapping

Partnership Trigger

The ‘partnership trigger’ is the impetus for partnering. Which do you think comes first? Trusted relationships or clear problem statements? From our experience, it can start with either one.

Sometimes, a partnership comes about because you know and trust all of the other parties involved. On the other hand, sometimes there may not be a single player within your network that you could partner with, but because you have a clear problem statement, and you understand your problem well, you know there is no way you can do it alone. Hence you want to partner.

The more important driver is intentionality. There must be genuine intent to partner for the partnership to happen.

Asset Mapping

The second thing to identify is the asset map of all stakeholders involved.

In the Combinatorial Innovation module, we mentioned that in symbiotic mutualism (a powerful synergistic relationship between two different species), there are effectively only two things being exchanged. You either exchange a service, or a resource. We also went through conventional vs unconventional resources, and gave examples of unconventional resources you could leverage and asked you to list down some partners (current or prospective) who might be able to provide you with unconventional resources.

If you’ve done the exercise, now is a good time to review the list and dive a bit deeper into the unconventional resources you have in mind to make sure you haven’t overlooked anything. The greater the detail, the better. If you haven’t done the exercise yet, see the combinatorial innovation module here.

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Design

Once we get through the Discover phase, the Design phase is where the fun really begins!

There are two things that we need to design:

• The partnership value chain: the partnership itself and how all parties involved derive shared values and shared benefits.
• And the solution or innovation that the partnership will bring about.

Design: Partnership Value Chain

Partnerships are a type of relationship. We’re going to look at the types of possible bilateral relationships, and multilateral relationships.

1. Bilateral Relationships

Let’s say that we have only two parties involved. The illustration above highlights some of the typicmodels of bilateral relationships:

• A benefits explicitly from B: in this case A provides direct or explicit benefits to B, and it’s strictly one way. The relationship is very one-sided, and one party extends a lot of goodwill to the other. Or the relationship is parasitic.
• A and B benefit explicitly from each other: we probably see this kind of bilateral relationship more often, where two parties provide direct or explicit benefits to each other. Such relationships tend to be mutually beneficial. You could also say that it’s transactional. Trading relationship are like that. You provide me the money, I provide you the goods.
• A benefits explicitly from B, B benefits implicitly from A: in this case it could be possible that one party provides a direct or explicit benefit to the other, but the other party returns a more indirect and implicit benefit. The relationship is still mutually beneficial, just that the timeline is asymmetric. One party provides the benefit to the other party quickly while the other party returns the benefit in a much slower manner.
• A and B benefit implicitly from each other: when both parties only benefit each other implicitly and indirectly. Such relationships are still mutually beneficial, just that they are long-term mutually beneficial relationships.

2. Multilateral Relationships

Here’s where things get a little bit more interesting – multilateral relationships. The three most common multi-lateral relationship models are:

• An alliance is a loose network where all parties collaborate together, leveraging on each other as and when necessary. There are no obligations, so it’s quite organic. Most partnership networks, network organisations and trade associations kind of work like that.
• The joint-venture, is slightly different. It involves all parties pooling resources together into another new, shared third party entity. This entire relationship is formalised by legal agreements, with contractual obligations for all parties involved, penalties if any one party were to default on their commitment, etc. The parties involved may not benefit directly from one another, but they will benefit from this joint venture entity that they have invested in. Joint ventures are pretty common in the business world.
• A circular partnership is what happens when all parties involved only provide benefits in one direction, but it comes back full circle, so that everyone in the big picture benefits. We call this partnership arrangement a circular partnership.

Circular Partnership

Since this model is not immediately intuitive, we’ll look at this relationship model more closely. Let’s use Facebook as an example. Facebook has spent billions providing end-users with an amazing platform that helps us reconnect with friends, share our media, initiate chats, etc. But we are we paying Facebook for using the platform? No. So who’s paying Facebook?

Companies and advertisers pay huge amounts of money to have their ads displayed on the platform. Why would they do that? Because we, as the platform users are paying back the advertisers with our attention and our eyeballs. We spend time viewing their advertisements, and hopefully some of those advertisements may lead to some form of sign-up or purchase. And this closes the whole loop.

If we scrutinise this model at a high level, what’s amazing is that you do notice that the benefits really flow only one way from one party to another. However, when we can close the loop, it works out to be a beautiful model.

Refer to the video tutorials for the module if you would like to see a walk-through example of a how a typical multi-sector partnership can be a combination of these models above.

Design: Solution

When it comes to designing the solution, we suggest you consider the human-centred design or design thinking framework, which was popularised by the renowned design firm IDEO (see Resources section below). We like this framework is because it puts the end-user at the centre of the entire solutioning process. What is it like seeing the problem through the eyes of the person? How would the person feel? What is his or her pain point?

We won’t go into detail on the entire human-centred design cycle - there are plenty of resources online. However, we’ve found that a lot of resources don’t include enough detail on the ideate stage of the cycle.

Ideate

Especially for non-designers, this part can be very challenging. We almost feel like there’s a need for another framework just to get the ideate stage going.

The framework we like is the Innovation Genome framework, developed by the design software company Autocad. They derived the framework after studying the greatest 1,000 innovations in human history over the past 3.4 million years. Basically, the framework suggest that you consider these 7 questions with respect to an innovation target:

1. What could we look at in a new way?
2. What could we use in a new way, or for the first time?
3. What could we move, changing its position in space or time?
4. What could we interconnect, for the first time or in a new way?
5. What could we alter, in terms of design and performance?
6. What can we make that is truly new?
7. What can we imagine that would create a great experience for someone?

Each of these 7 questions further expands into further sub-questions, with gives you a comprehensive 7x7 matrix. We won’t go into this framework in its entirety, but we found it helpful to complement the human-centred design framework and we encourage you to check it out.

Source: Autodesk

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Deploy

Deploy is what happens when we are ready to launch the partnership and the solution. This is where all of the compliance, checklists and must-haves come in.

Four things you need in order to deploy:

• Legal
• Resources
• Partnership Principles Check
• And Measurement and Evaluation of partnership projects.

The Partnering Cycle developed by our partners at TPI provides a step-by-step guide from scoping and identifying partner(s) to transition and exit from the partnership. For more detail on how to use this, we recommend visiting TPI’s website.

The four elements described in the Deploy section form part of the Partnering Cycle and touch on some parts of three of the four phases of the Partnering Cycle, namely: Managing and Maintaining, Reviewing and Revising and Sustaining Outcomes.

Legal

We’ll touch briefly on the legal aspects of partnering - we’re not legal experts but want to share our experience with you. It’s important to create a legal framework for your partnership that captures the roles and responsibilities of the partnership in writing. Over the years, we found that it is more effective to have in place a range of agreement frameworks to be used to suit each partnership context.

Our agreement arrangements range from non-binding but faster to put in place, to very binding but a lot slower to put in place. It is very important to seek counsel from your internal legal department. If you don’t have one, it would be wise to seek external legal advice.

One of the legal instruments that we used quite often over the years is a Letter of Intent (LoI). This is a non-binding document but demonstrates goodwill among partners to work collaboratively. This often suits a partnership that is complex or at an exploration stage which requires some time before a concrete partnership can be formed. A Letter of Intent ensures that partners can continue the conversation in the same direction. It gives assurance to each partner that there is a commitment down the track to form a partnership.

Even just putting something in writing helps to align partners on what has been agreed upon. Even though an LoI is not legally binding, it serves as a kind of agreement that all parties are committed to make a partnership happen. Legal paperwork can follow in the form of binding contract or agreement once a partnership is agreed.

The image below provides examples of the types of agreement that you can use:

Resources

So you have the necessary structure of the project in place, but without any way of resourcing or financing the project, there’s no way to get the project off the ground. There are a range of resourcing options for a partnership project, ranging from short-term and less recurrent to longer-term and sustainable. It’s a lot harder to get to the sustainable stage of resourcing a project, but it’s something to strive for.

We didn’t let resource scarcity come in the way of forming partnerships. We took a combinatorial approach to resourcing as well - a belief that each partner has something to contribute to make a partnership project a success. They could have expertise they could contribute, networks they could introduce, or a venue they could provide - and these resources could be explored together.

Partnering Principles Check

Partnerships should be built based on agreed principles. The three partnering principles illustrated here were developed by TPI – The Partnering Initiative. In order for a partnership to be healthy, all partners must have three things:

1. Mutual benefit,
2. Transparency, and
3. Equity – distinct from equality, and meaning an equal right to be at the table and recognition of the contributions of all partners.

These are the foundations upon which a healthy partnership is built.

Measurement

Lastly, to get the project deployed, we need to be very clear how are we measuring the partnership as well as the project. See more on this in our Performance Measurement module.

Measurement: Partnership

For the partnership, you may adapt the partnership health check from TPI. This health check centres around 13 indicators. Measurement should also be defined in your partnership agreement.

Measurement: Project

Projects can either rely on macro frameworks like the UN SDGs, domain specific standards, such as the Sphere Standards that are widely used for humanitarian response, or other targets very specific to the partnership or project. It’s important to have a measurement framework before the project starts or it may be too late to capture the necessary metrics by the time the project has begun.

Again - you can see more detail on this in our Performance Measurement module.

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