Public-Private Partnerships in Health The Private Sector s Role in Public-Private Partnerships

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1 Public-Private Partnerships in Health The Private Sector s Role in Public-Private Partnerships COMMITTED TO IMPROVING THE STATE OF THE WORLD

2 The Private Sector s Role in Public-Private Partnerships Over the past 10 years, partnerships between the public and private sectors have become common strategies for responding to the global public health crises of AIDS, tuberculosis and malaria at both the national and international levels. Through these public-private partnerships (PPPs), partners from multiple sectors combine skills, expertise and resources to implement programmes larger in scope than the reach of individual partners. Some have been highly successful, while others have failed to make an appreciable impact, often at significant financial and opportunity costs. Companies have many reasons to engage in PPPs. In addition to pursuing philanthropic programmes or a commitment to the improvement of public health, there are sound business reasons such as maintaining a healthy workforce or increasing market access that motivate a company to get involved. The private sector can provide critical know-how to PPPs, such as major programme management, R&D and/or supply chain expertise. Advantages of PPPs in Health Enable companies to meet public needs, strengthen their brand and penetrate new markets Advance public health strategies and policies Improve health education and conditions worldwide Foster trust and improve collaboration between sectors to leverage resources and relationships Identify new and better ways of operating PPPs are a critical tool in the battle against public health crises, but they are not the only means for the private sector to engage in global public health issues. Depending on a company s objectives and capabilities, a partnership may not be the optimal form of collaboration. Indeed, in some cases unilateral action may better serve a company s needs. Alternative forms of engagement might include: Making one-off product donations Developing fellowships to advance non-profit and civil servant capabilities and enhance corporate intelligence of an issue or government Sharing research insights or market analysis But, if based on the right objectives and designed well, PPPs can be highly successful in advancing corporate interests while also achieving significant advances in international public health. The World Economic Forum Global Health Initiative partnered with leading consulting firm Booz Allen Hamilton to uncover underlying principles of successful PPPs by researching the real-world experience of leading companies, governments and non-governmental organizations. Booz Allen conducted nearly 60 interviews with senior executives of multinational corporations, governments, multilateral agencies, foundations and not-for-profit organizations and researched over 40 PPPs, primarily in international health. The research explored the conditions under which PPPs are the right form of collaboration and what optimizes success. Common themes from the interviews and research confirm that having a good idea and wanting to make a difference are important motivators but not a strong enough foundation to ensure the success of a PPP. In fact, a key finding is that a company s engagement in a PPP must be based on a solid business case this includes compelling quantitative and qualitative benefits and cannot be based solely on corporate social responsibility motives. Companies must be willing to commit the time and flexibility needed to work with other organizational cultures to achieve results. Another key finding is that PPPs are successful when there is a driver who not only helps to start up the partnership, but also remains involved throughout the PPP to ensure partners stay engaged and meet their commitments. Furthermore, it is important to design plans that enable participants to transition to new partners and to prepare exit strategies in case the partnership needs to be disbanded. Underwriting public health campaigns Providing subject matter expertise through consulting or training engagements 2

3 Key Research Findings Successful PPPs Are based on a solid business case, including quantitative and qualitative benefits Include a driver who helps establish the PPP and remains involved to ensure success Include strategies to transition to new partners or to disband the partnership This guide, organized in three main sections, expounds upon these and other findings: When is a PPP the right form of collaboration? PPPs are often the right form of collaboration when a company: has a strong business case understands what contributions it will make to the partnership (and these are complementary to the PPP mission) is ready to make a commitment of time and flexibility and cede some control to others What core pre-design and design elements optimize success and impact? Specific actions should be completed when designing a partnership, including: conducting robust planning and comprehensive partner analysis identifying and ensuring the ongoing presence of a driver, a participant in the PPP who guides the process and remains invested to ensure the partnership s success designing for quick wins to demonstrate results and engaging the right players planning for potential partner transition, including engagement of local actors and partnership conclusion How does the Global Health Initiative help PPPs work successfully? The Global Health Initiative provides expertise in catalyzing PPPs in health and driving action on HIV/AIDS, TB, malaria and health systems at the regional, national and international levels. Specific activities include: acting as a catalyst and convener of partnerships, by identifying needs, developing ideas and launching partnerships identifying appropriate partners and ensuring the ongoing presence of a driver in PPPs acting as the initial driver in partnerships and in some cases, ensuring smooth transition to a permanent driver 1. When is a PPP the right form of collaboration? The primary reason partners come together to form a PPP is to achieve a mission that calls for skills, capabilities and resources beyond what each organization possesses individually. However, each partner must have the right reasons and the necessary information before engaging in a PPP. Prior to forming a PPP, interested companies should ask themselves: Is my engagement in the partnership supported by a strong business case? Do we know what contributions we can make (and what we need) to achieve the mission? Do our planned contributions align with the PPP mission? Can we identify potential partners? Is my company prepared to make a commitment (even if complex barriers and shifting priorities may impact timelines)? Are we willing to be flexible and cede some control? Business Case: Primary Step in Forming a PPP First and foremost, a company s engagement in a PPP needs to be supported by a strong business case. Research demonstrates that there must be a correlation between the partnership objectives and the day-to-day mission of participating organizations. For companies, this means that wanting to do good is not enough. Corporate social responsibility, public relations or employee retention/satisfaction may be benefits of participation, but cannot be prime motivators. PPPs driven by these factors are less likely to be sustainable over the longer term. 3

4 Business Case Examples A power company operating in an HIVprevalent country co-founded a PPP because it is reliant upon a healthy labour force and customer base A multinational producer of an anti-malarial product entered into a PPP to gain access to distribution channels, expand market penetration and build future brand loyalty A global beverages company conducted an extensive risk assessment, which became the foundation for the business case that enabled several initial projects to be funded A strong business case includes both quantitative and qualitative benefits envisioned as a result of the partnership. Economic advantages may include: Supporting a healthy workforce Access to markets Strengthened relationships with government decision-makers Support for the long-term economic growth of new markets Expansion of distribution channels Development of stable and positive business conditions If the PPP is founded on a strong business case, it will be more likely to meet its objectives, secure ongoing executive leadership support and corporate resources and be sustainable. Effective PPPs will deliver something positive for everybody; each participant must see the value of their participation. Klaus Ostergaard, Regional Director, Vestergaard Frandsen Group SA Partner Contributions: Ensure Alignment With the Mission Building upon a solid business case, a company considering a PPP must ensure its contributions to the partnership will align with the PPP mission. This involves assessing the firm s own skills and available resources to ensure that they match the partnership s core mission and will help accomplish its objectives. Aside from financial contributions, the private sector can provide programme management experience, supply chain and operations support, R&D and other subject matter expertise, and credibility and legitimacy to the PPP. Perhaps even as important as understanding one s own strengths and contributions is identifying those areas in which the company does not have a capability and will be reliant upon partners. Organizations must be identified that have complementary skills and are committed to the mission of the partnership (see Section 2, below, for details on conducting partner assessments). Commitment: Results Take Time And finally, a company considering a PPP must be ready to make a commitment of time and flexibility and be ready to cede some control. Successful partnerships can often take one to two years to begin delivering intended results; thus, a commitment of time (and keeping it) is essential. Companies have different expectations and needs, and bring different skills to partnerships than do governments, NGOs and other partners. Inevitably, each partner will play a unique role in the PPP, requiring a different type of commitment. While one partner may serve as a catalyst to help form a relationship requiring a short-term commitment, another may serve as a producer contributing products, thus requiring a commitment of a few years. Meanwhile, the driver will need to commit for the duration of the project. Companies must make a commitment to remain involved as long as their specific roles require and encourage flexibility among internal management regarding when results might be realized. Partners may also face differing organizational cultures, national cultures, geographic and language barriers, and shifting priorities among participants. Making a partnership work is a challenge for any company and requires significant flexibility. Managed well, the diversity of the partners adds to the success of the relationship and the outcome of the partnership; but, this is a process that requires careful planning, management and review. And, most importantly, both the company and potential partners must be willing to cede a degree of control 4

5 to the partnership and accept a degree of uncertainty. One should have a profound understanding of his/her own critical path, and how partnering with other organizations can accelerate your organization down that path. 2. What core pre-design and design elements optimize success and impact? Once a company has determined that a PPP is the right form of collaboration, it must begin designing the PPP. The experience of nearly 60 leaders in PPPs provides some key practical steps to ensuring that PPPs are successful. Conduct robust planning and due diligence Identify a driver to continually lead the PPP to success Engage the right players and design quick wins for sound execution Anticipate transition and exit plans Upfront Planning: Go in Eyes Wide Open Jonathan Greenblatt, Co-founder, Ethos Water Partnerships can successfully function in many different shapes and sizes: there is no one size fits all in terms of structure and governance. Indeed, flexibility especially in the early phases of a partnership is often critical to navigating different organizational cultures and clarifying roles and expectations. And while there is no right or wrong governance structure for a PPP, conducting upfront planning for design and implementation is critical. Potential partners should not assume that a general agreement on the partnership purpose is the sole satisfactory entrance criterion for a PPP. All partners need to have a full understanding of the environment and the role each will play. A situational analysis is a powerful way to understand the landscape in which the partnership will operate and the various players involved. This helps companies to identify potential partners as well as potential advocates, naysayers and the risks the partnership may face. Companies cannot stop here, however. Not only must partners express interest, but they must also possess the necessary and complementary skills, capabilities and resources to contribute to the solution. Before entering into a PPP, companies should understand what each potential partner can bring to the partnership. In-depth partner analysis is an excellent due diligence tool to identify the strengths and weakness of potential partners as well as their performance record in the areas of anticipated contribution. And ultimately, upfront planning should include an agreement on the nature, scope and duration of each partner s commitment. All partners entering the PPP should understand each others roles and responsibilities. Effective communication at the outset borne of careful listening and capitalizing on synergies amongst participants are critical aspects of planning for a successful partnership. Reggie Van Lee, Senior Vice-President, Booz Allen Hamilton Driver: The Critical Ingredient to Success While several best practices are important in shaping a well-functioning partnership throughout the PPP lifecycle, only one is a consistent determinant of success: the sustained presence of a driver. The driver guides the pre-design and design process and remains invested to ensure that partners stay engaged, meet commitments and strive toward ultimate success. The driver consistently serves as the lead communicator across the lifecycle of the PPP. The driver can play multiple roles, including acting as the broker, translator, enforcer, subject matter expert and/or motivator. As a broker, the driver helps bring the right parties together As a translator, the driver speaks to those parties as a trusted neutral interlocutor 5

6 As an enforcer, the driver maintains accountability, follows through on commitments and ensures that best practices are adhered to As a subject matter expert, the driver understands domain issues, provides credibility and ensures that the partnership is on the right track As a motivator, the driver creates publicity and visibility, and pushes participants toward the PPP s aims and achievements The types of roles the driver may play depend on the complexity and number of partners involved, regardless of whether the partnership operates at the national or global level. A driver may be an invested partner or an objective party, but the central role is to ensure forward motion throughout the life of the PPP. There needs to be one partner that is willing to serve as the driver, to lead the effort. This partner s role can be to influence, to motivate, to ensure that all participants see the benefits of participation for themselves to serve as a neutral party to move the partnership forward. Emma Schmitt, Group Sustainability, Standard Chartered Bank Execution: Design for Support and Success It is commonly recognized that quick wins are a critical component in any programme or partnership to demonstrate early credibility and build momentum for future success. However, quick wins are not easily attained unless thorough planning is completed during pre-design. As noted earlier, cultural, geographic and language barriers, and shifting priorities can impact timelines and expected results. PPPs need to define goals, objectives, target populations and specific activities designed to The strategy must include early tangible deliverables on the ground and other quick wins. These are critical to sustain the partnership during the first year and to secure new partners and resources. Hugh G. Jagger, Chairman, Hugh Jagger Associates demonstrate early progress. It is only through effective pre-planning that PPPs can quickly deliver positive results. While it may be obvious that all successful partnerships must have measures of accountability, communication, decision-making and evaluation, what may be less obvious is how evaluation strengthens the partnership. Using metrics to monitor and evaluate tangible results can create trust among partners (let alone stakeholders served by the partnership) while sustaining enthusiasm to meet new challenges. Monitoring, documenting and communicating the benefits of collaboration can increase buy-in of existing and potential partners. This requires the active and consistent contributions of a representative from each of the partnering organizations. This motivated technocrat must not only exhibit strong collaboration skills and local knowledge, but also ensure that his or her own organization remains committed to and supportive of the partnership. Companies should also plan to secure two other types of support. Successful PPPs often engage a high-level champion to demonstrate credibility for the partnership and garner broad-sweeping interest and support. Given the other commitments of these champions, PPPs should also plan for their likely and eventual disengagement (see box below). Perhaps most importantly, the support of the host country government is critical to any PPP, regardless of whether the government plays a passive or active role in the PPP. At a minimum, the host government should understand and endorse the partnership s mission and ensure goodwill. Engaging and Disengaging a High-Level Champion A multinational technology firm engaged its CEO to introduce a PPP concept to other firms to gauge interest After the concept was designed, the CEO supported the launch Once the project management office was established, the CEO curtailed direct engagement 6

7 The real glue of a PPP is mutual interest the second critical element is champions at high levels, individuals who have personal involvement and leadership with authority. Alex Matter, Director, Novartis Institute for Tropical Diseases Transition and Exit Strategies: Plan for Sustainability The reality is that not all partnerships are successful. But even when they are, one or more partners may need to transition out of the partnership. By building procedures into the partnership that allow for the transition of one or more partners, the impact of such changes on the mission and other partnering organizations is minimized. Likewise, when PPPs are not successful, or elements of the partnership begin to decline, established exit strategies identify other mechanisms for addressing the mission once the partnership is disbanded. These procedures are critical for other reasons as well; transition strategies are particularly important to allow local institutions to succeed other partners and ensure the creation of sustainable activities. To plan for sustainability and ensure ease of transition, engaging local partners early on in the establishment of a PPP is critical. 3. How does the Global Health Initiative make PPPs work successfully? The Global Health Initiative was launched by Kofi Annan at the World Economic Forum Annual Meeting 2002 in Davos. The GHI s mission is to catalyse new PPPs in public health and drive existing ones in India, Africa, and South, East and South-East Asia. Currently, the GHI partners with companies, governments, UN agencies and other international organizations, foundations and civil society. technical advice and guidance, and launching partnerships Identifying appropriate partners and ensuring the ongoing presence of a driver Acting as the initial driver in partnerships and, in some cases, ensuring smooth transition to a permanent driver Through its involvement in global and regional PPPs, the GHI: Delivers innovative workplace programmes to tackle HIV/AIDS, tuberculosis and malaria across Africa and South, East and South-East Asia. Through these programmes, more than 9 million people have access to life-saving information, prevention, testing and treatment services Strengthens the health system in sub-saharan Africa, starting with a pilot project in Ghana Supports global and regional public-private partnerships, such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, the Stop TB and Roll Back Malaria Partnerships, the China Health Alliance and the India Business Alliance For further information on the Global Health Initiative and its activities please go to or contact + 41 (0) to speak with a GHI team member. For further information about the study conducted by the GHI and Booz Allen Hamilton, please contact a GHI team member or Margaret Lidstone, Booz Allen Hamilton, at lidstone_margaret@bah.com or The GHI can assist member companies in their public health efforts by: Acting as a catalyst and convener of partnerships, by identifying needs, developing ideas, providing 7

8 The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. ( Global Health Initiative of the World Economic Forum 91-93, route de la Capite CH-1233 Cologny/Geneva Switzerland This report was prepared in partnership with Booz Allen Hamilton. This material was prepared with the support of Sudler & Hennessey.