Over the course of six years and more than 50 partnerships, Partnering for Innovation has learned many valuable lessons on working with the private sector. To better capture this knowledge, we recently released a Practitioner’s Guide that highlights the how, what and why of private sector partnerships in the development sphere.

What have we learned from the private sector?

Facilitation, relationship building and business acceleration stood out as key factors to success across our diverse portfolio of partners. Each partner taught us new lessons and provided different context for understanding best practices in developing a long-term, sustainable strategy for introducing commercial products and models to the agricultural sector. Here are a few highlights:

1. Take a Portfolio Approach to Investment. Balance a handful of risky, innovative investments with a sizeable group of more traditional, less risky investments.
2. Select Businesses With Strong, Committed Leaders. Leaders must be committed to the target market to achieve sustainable outcomes.
3. Negotiate Upfront for Clear Outcomes and Allow for More Flexibility. Clear expectations form the backbone of an open, collaborative relationship. At the same time, investments should give the business flexibility to change their approach or pivot their activities to react to evolving market demands.
4. Prepare for External Complications and Focus on Long-Term Impact. Businesses need to look past day-to-day operations and put longer-term strategies in place to manage inevitable complications.
5. Limit Additional Reporting Requirements. Rather than overburdening businesses with extensive reporting, we found success by pulling the information we needed from businesses’ existing administrative, production and sales tracking systems.

How are we using what we learned to partner with the private sector?

After seeing many examples of what works and what doesn’t work, we adapted our selection, negotiation and implementation methodologies to incorporate the lessons we learned. During the solicitation phase, we requested tailored applications focusing on four aspects: risk management, business models, commercial viability and organizational capacity. We received stronger applications as a result of this change and were better able to assess critical factors such as overall risk and leadership capacity.

As we moved into the negotiation phase, we learned to be more flexible in designing payment targets that focused on overall sales goals as opposed to itemized goals specific to different crops. For instance, instead of setting up sales goals for rice, maize and soy separately, we allowed more profitable crops to count toward an overall objective by accepting total volume of sales. Additionally, we required a strategic plan instead of a yearly work plan to give businesses more flexibility in revising their strategy based on market realities. All of these changes allow businesses to focus on the long-term impact and prepare for external complications as they arise.

As we look to the future, we hope our adaptive approach to soliciting and identifying partners will allow us to collectively scale up impact for our smallholder clients. As always, we welcome feedback; please email us at [email protected] or comment below if you have additional lessons learned or suggestions to share.