Summary

Deciding who to work with and how to work with them is a critical factor in determining the success or failure of a development program.  This is true whether the goal is improving agriculture production, enhancing the contribution of small productive enterprises to economic growth or working to improve the policy and regulatory framework within which the private sector must operate.   In this blog post I explore some of what I have found to be critical elements of a successful development partnership and offer illustrations from my own experience.  I hope you will read through these examples, consider them in the light  of your own work and add your own experience and ideas in the comments section at the end.

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Partner Up

When I was a very young development cowboy at the beginning of my career, in 1973, I met a very important person. His name is Joe Allen and he lives in Ghana. He is important to me because of the lessons he helped me learn about entrepreneurial vision, fairness, flexibility, dogged determination and partnership. I was, at the time, working with a small enterprise development program, Technoserve, Inc., that was pretty much inventing the field on the run in those days. We operated then very little funding and no support (or strings) from government to help would-be entrepreneurs and farmer groups realize their dreams.

Sugar Production in Ghana

Joe brought us his idea for building a small sugar factory to process the sugar cane that he and other small-scale farmers were already growing. They could no longer sell it to the big state-owned mill that was too far away to transport it economically. His company would help those farmers by creating a market for their cane, creating jobs in an area where few employment opportunities existed, and providing sugar for the local market. Last but not least, it would hopefully operate at a profit. My colleagues and I agreed that this would be a good enterprise to assist and we started working with Joe as “arms length” advisers, ever-respectful of his “rights” as an entrepreneur in charge of his own enterprise. Together, we prepared a business plan and identified the kinds of technology that would be needed to operate at the targeted level. We also help raise the capital needed to put the factory together, without providing any investment capital ourselves,  and did a thousand other things – but always standing back two steps and making sure that the decisions were left to Joe.

Joe is a man who expresses himself very clearly. He came to me one day and said,  “Look, I trust and respect you people or I wouldn’t be working with you. You are always talking about ‘partnership’ and ‘shared risk’ but when we are doing hard things you are afraid to really get involved, saying that it is my decision to make. I know they are my decisions to make because it is my company and my loss when it fails but if we are really partners then I want you to really be with me all the way. Give me your advice and tell me what you think all the time, including when you think I am wrong. That is what real partners do.”  Our discussion went on for some time but at the end of it we were “real” partners and we went on to develop one of the most interesting and challenging enterprises I have ever been involved with.[1]

Our partnership involved us together in addressing many issues. We worked on the selection and, in some cases, the development of appropriate technologies. We worked together to find the financial means to acquire the equipment. We identified and developed reliable local markets. And, we jointly addressed operations management and the development of appropriate labor productivity standards. The success of the company was the result of our both contributing our relative strengths. There were some areas in which Joe had the superior knowledge as a result of his training in agriculture and experience in the area. There were others where our business education, international experience and access to outside experts was crucial. There were many other areas where we put our heads together and came up with a creative “new” solution to a problem. I particularly remember one steamy day spent cutting sugarcane myself so I could fully understand what the job involved before participating in the discussion of target harvesting rates for those employed to do the job all day every day. The result of that painful effort was a reduction in what I suggested should be the productivity norms for this task. It is HARD, DANGEROUS work I am grateful to not have to do every day.

The company operated in a most difficult political/economic environment for fifteen years. Eventually one more change of government resulted in loss of the land on which much of the sugarcane was grown and the factory had to close. Joe’s enterprise far outlived the state-owned mill that sparked its creation by refusing to buy the sugarcane it had encouraged the farmers to plant for it and provided incomes for a large number of people during a very difficult stage of Ghana’s economic history.

I remember my partnership with Joe with great fondness and respect. I often think back to the time we spent together finding solutions and making something new happen in a place it was badly needed.[2]  That lesson has been a cornerstone of my work with entrepreneurs ever since. It does not make me universally popular by any means when I tell businessmen that my program cannot really help them unless we understand a great deal about their business and work with them on the basis of an open partnership of give and take. It has, however, resulted in quite a number of very positive partnerships over the years with private companies and other beneficiary groups, with donor organizations and with other partner organizations. I am sure there are others who have just written me off as a pompous twit, but they have at least had the grace (for the most part) to not say so publicly in my presence. I have met my fair share of pompous twits myself so I suppose I should consider turn about to be fair play.

There are, of course, cases where a company really does only need a loan, or a technical production solution, or a new market. My experience has been that these “needs” are more often symptoms of other problems that must be addressed before the “needs” can be sustainably satisfied. For example, it is useless to help a business find a new customer if it does not have the right product for that customer in terms of packaging, pricing or quality or if it will not be able to supply the customer in the right volumes according to the specified schedule.

Ghana Fruit and Vegetable Exports

Another experience from Ghana (Yes, I have had the good fortune of spending quite a few years in Ghana.) illustrates this principle working with private companies. One of the activities I was most involved with for a period there was trying to help Ghanaian farmers and packers develop markets for their fresh fruits and vegetables in Europe. At the time, Europe was rapidly raising the “bar” for imported products, especially those coming from Africa and other parts of the Third World by increasing quality standard and technical certification requirements. My job was to communicate those requirements to Ghanaian exporters and help them to adjust their operations to meet them and still be profitable. This was a chore indeed, especially working with several larger companies who were pretty sure that Europe should be adjusting to Ghanaian standards rather than the other way round.

I became both the guy who kept giving the exporters the bad news and a, even less comfortably, frequent spokesman for the industry. By putting myself firmly inside the “house” I became a member of the family, if perhaps not always the most popular member. Even when the companies did not like what I had to say, they did respect that I was sincere and I was on their side – even though they felt I was most likely misguided in thinking that those new requirements would apply to Ghanaian produce.

We approached the problems together. First of all, we had to learn what the new European requirements (legal and market) actually were. Rumors, suspicions and misrepresentation had to be with documented facts about “maximum allowable residue levels (MRLs) , EurepGap (now GlobalG.A.P.), and others. Then, we ran training programs to communicate that information to individual farmers and exporters. My team worked with any companies who requested our assistance to help them adjust their operations to comply with those new requirements by making changes in their packhouses, spraying programs or other aspects of their operations. We advised them on the strengthening of their exporter associations and streamlining their port and shipping operations to reduce time and quality losses. Finally, we helped them to broaden their access to European buyers by direct participation in trade shows and other promotional activities.

I was very pleasantly surprised, when finally ready to leave the country, to be presented with a very nice token of appreciation. Accompanying this gift was an even more thoughtful letter from one of the exporters who had always been among the most resistant to change in his operations or cooperation with others.

In his letter he expressed his gratitude for all of my hard work with him and the others and his wish that I understand how much difference my efforts had made in his business. That is the kind of “payoff” that makes all the effort worthwhile for this development cowboy.

Peace Corps Education (Kenya)

My first lesson in understanding the value of open partnerships came in the Peace Corps.  I was not the “normal” late ‘60s version B.A. generalist TEFL volunteer. I was recruited for a specific position with the Ministry of Lands and Settlement in the Central Province of Kenya. Even more unusual for the Peace Corps at the time, when I arrived there was an actual, and useful, job for me to do and people who wanted me to do it,  as well as a place to live. That was the upside. On the downside was that I was living in the provincial capital, Nyeri, and working with eleven different farmers’ cooperatives spread around the district. Thus I did not have the “ideal” Peace Corps experience of village life, nor did I have the opportunity to really get to know most of the people I was working with outside of our government office.

Peace Corps training in 1968 placed heavy emphasis on peer evaluation, cross cultural sensitivity training and T Groups, which were thought to be at least as important as any discernible technical skills. I was judged to be “excessively job oriented” and insufficiently sensitive to the plight of poor Africans by my peers but was allowed to slide through the final selection process anyway. These personality defects probably enhanced my suitability for the situation I found myself in when I finally arrived in Kenya.

My job involved advising the leaders of the eleven cooperatives in our district on management and marketing matters. I spent a great deal of time auditing cooperative books (a most unhappy task) and moving from meeting to meeting on the beat up motorcycle I was assigned by the Kenyan government. Nyeri District being the literal heart of the old “White Highlands” of British Colonial fame and the farmers being mostly former laborers on the white- owned farms, they had a pretty fixed idea of how to “handle” white folks – especially young idealistic ones from America. Everyone was painfully polite and insincerely appreciative of the many sacrifices I was making to help them “better their pitiful existence.”  At the same time, they were not just rejecting my advice, they were not paying any attention to it at all. They wouldn’t even dispute it. This was a problem.

I am a fairly persistent person, however. I just kept trying again and again, each time acting like they were really interested in whatever was my recommendation of the week. After six months I was ready to pack up and head for home writing off the whole experience as a waste of time. The military draft deferment that accompanied Peace Corps service in those days of the Viet Nam war that had served as part of my motivation for joining the Peace Corps in the first place served as a strong disincentive to pursuing this rash course. I did not even want the farmers to follow my advice if they wouldn’t argue with it. I was young and innocent but I did realize that there were important factors about which I was quite likely unaware that they should consider along with my advice.

Like in any good novel, just when the situation looked darkest, a ray of light shone through. In one of the cooperative meetings, I had made my presentation on some subject of obvious (in my mind, anyway) import and was preparing to climb on my motorcycle and head back to the office when one of the wazee (old men) in the meeting shook his head and said, “I don’t agree with you. There is something else you should know.”  We talked some more about the point and then went for a cup of chai together still considering what the best course would be given my ideas and his knowledge of the local situation. After that, we did have a real partnership and gradually the other coop boards developed the same level of trust. We had a great time and accomplished a few things, as well. But it was not possible until we were both participating in the discussion.

Passing the Torch (Palestine)

I offer one more example for those who are still interested. This was a case in Ramallah, the functional capital of Palestine.Very soon after my arrival on another USAID project, I was asked to advise a prominent local confectionery company on the restructuring of its management to facilitate passing of the torch from the founding generation of family owners to the next. I was skeptical, to say the least, that these folks were going to actually share enough of their family and business history with me allow me to make a very meaningful contribution to their problem. My expectation was that I would learn what little I could and write them a general “paper” on the principles of transition in family owned companies, declare “victory” and move on.

I arrived at my first meeting with the family, which looked a lot like the board of directors as well. Without preliminaries, one after another they just unloaded all of their dirty laundry on me. It was a game of “he said, she said” along with various accusations of broken promises, youthful indiscretion, senility, jealousy, resentment, arrogance, greed, stupidity, etc., etc. In fact, I learned quite a lot more than I really cared to know and felt a bit like the belle of the ball as all sides (yes, there were more than two) courted my favor. It seems that the only thing they did agree on was that they were going to bring in an impartial outsider to vent to, if nothing else.

The result was actually quite satisfactory in that I was able to develop a very open partnership with the whole family and help them work through their some of their management and relationship issues. Along the way, we were also able to revamp their marketing strategy, improve their production facilities and qualify for ISO certification. This was possible only because they had somehow come to the conclusion that they needed some outside expertise and were going to make good use of it – not blindly following advice whether right or wrong, but taking my recommendations into account along with their own knowledge and experience as they considered different issues.

The discerning reader will realize that it is not always so easy. Many company owners and managers actively resist sharing true information about their operations. They certainly don’t want strangers as their “partners” in any sense that does not involve getting a lot of money in exchange for a very small share of the company ownership. The kind of intangible partnership that I prefer and have had such good experience with is just a concept they do not comprehend. This was especially true in Armenia where mistrust and secrecy are major hallmarks of business thinking. I understand that the same situation prevails in other parts of the former Soviet empire and seen evidence of it myself in a few places like Georgia, Azerbaijan, Tajikistan and, most recently Moldova.

Building Partnerships in Armenia

It was very difficult to find a group of Armenian agribusiness companies with which we could work in my favored mode. First, there is a level of over-confidence (arrogance?) among the business people born in their ancient culture and fed by many years of isolation from world markets. The first assumption of many is that the way they do things is the way things should be done. One should not suggest that there is something worth knowing that is not already known – and, very often, already known by the speaker. Second, there is a very strong preference for secrecy related to business or personal matters. It is not an open society. Communication is limited and there is a high level of dedication to protecting ones own interests and areas of operation. I suspect this has something to do with living for 70 years in a Soviet Republic where individuality and openness were not rewarded. From whatever their source, those two factors make it very difficult to figure out what is going on in Armenia. And the first response to almost any suggestion is “che, che, che” (No, No, No).

How did we overcome these problems?  Well, I suppose imperfectly at best. We looked for potential partners who were exceptions to the rule and would serve as examples to others. And we just kept trying. We assumed that if people keep coming back with requests for assistance, they must realize on some level that they need it. One favorite example is the owner of a small cannery I met soon after my arrival. On my first (off season) visit to his cannery it was abundantly clear that he faced multiple “challenges” in preparing his plant for any serious food safety inspection.  The birds nesting in the rafters over the cooking pots provided my first hint. As I pointed out some of the more obvious problems he would have to deal with, his response was always “che, che, che  – I don’t need to do those things because everybody knows my product is safe and the best.”  I did notice on my next visit, though, that some of the recommendations I had made were implemented. He was paying attention after all. We did, over the next three years, work with this gentleman on many issues and his company is now 20 times larger than it was when we met and when I saw him last he was in the final stages of preparing for a full ISO and food safety systems (HACCP) audit.

Partnership Rules

This business of partnership consulting is clearly a tricky and highly personal endeavor. What works for me may well require considerable adjustment before it can be successful for someone else. Communication skills, personal experience and personalities vary. Therefore, effective personal relationships, which are the essence of partnership consulting, will also vary. Let’s consider some of the general rules that seem to me to be generally “key” to the process.

Understand the client’s risk.

We can’t really be anyone’s partner until we understand their risk tolerance – not just the amount of risk they can accept but the kind of risk that most affects them. In earlier days I often heard various colleagues bemoan the fact that small farmers are so “risk averse.”  They are slow to adopt new crops or often even new varieties of their traditional crops that have the potential to multiply yields and thus cash income for them. What was often not understood was the impact of the fact that the new crops were not proven with these farmers and therefore also carried the risk of crop failure. That is a risk subsistence farmers cannot afford.

These folks live with risk everyday – and it is not the risk that I take when I buy a few more shares of Microsoft. My risk might make some marginal difference in my quality of life someday but I can evaluate that the downside will be limited and the upside potential is far greater. Subsistence farmers cannot afford to take on very much increased downside risk at all because the difference can mean feeding their children through the hungry season or not.

Dare to be radical.

Sometimes we tend to be too sensitive to the risks and experience of the people we work with, deciding on their behalf what information and advice they can deal with. As advisers from a different background and with wider experience than the people we work with, we owe them our best thinking and most creative ideas. They will generally be quite capable of evaluating for themselves how our advice might apply to their situation, inviting our participation if they think it will help. I cannot think of any examples of clients rushing headlong into one of my radical ideas and suffering when it turned out to be less brilliant than I might have thought. There are many more examples of my ideas being slowly adopted over time (sometimes over a frustratingly long time) into the clients own thinking and adapted in a way that makes more sense to him or her than to me..

The temptation that must be avoided is the urge to oversell our ideas with the effect of either “bullying” the client into doing something he or she doesn’t believe in or offending them by aggressively pushing ideas they have either decided against or are not ready to deal with. There is a fine line we must seek between being too aggressive in selling our ideas and being too timid and thus underestimating the ability of SME clients to process new information. As is often the case in our work, finding this fine line is far more a matter of art than science.

The point is that we must respect the people we work with enough to give them our best thinking. Very few of our radical ideas are going to be accepted right away. Some of them are wrong and will never catch on. Others, not always what we consider to be the best ones, will be processed by our partners over time and brought to life in a uniquely appropriate way. We must not be afraid to plant a lot of seeds that will sometimes flourish and sometimes not.

Charge for services/Share the cost.

Fees are an effective filter to separate those who are committed to the acquisition of a particular good or service from those who will try anything as long as it is free but not be committed to making it work. The amount of the fee or the share of the cost to be paid by the client is often less important that the fact that something is to be paid. The fact of the payment establishes “ownership” of the activity or asset and defines the pattern by which the parties work together.

Another example from Ghana comes to mind where a group of farmers had formed a cooperative and come to us with their plan for establishing a small-scale intermediate processing operation for their produce that would add value to their produce before selling it to the larger processing plant. It sounded like a viable idea so I asked the group how much money they had raised for its implementation. “But we are only poor farmers and we have no money” was the response. I suggested that some investment on their part was going to be required for their idea to be realized and that they should come to see me again when they had figured out how to raise these funds. A few weeks went by and they did come back – this time with a paper sack full of cash, which they somewhat defiantly plunked down squarely in the middle of my desk clearly calling my bluff. I expressed my admiration for what they had accomplished and asked what they were going to do with the money. The response was that I had asked for it so I should take it.  I suspect they really assumed that this was some sort of payoff required to gain access to the “goodies” my program was offering,  which was not an unheard of way of doing business in Ghana in the mid-1970s. Nevertheless, I declined and suggested that maybe they should decide which one of their group they would entrust with their capital until it could be used in developing their project. They said, “The one we trust is you. You keep it for us.”  Again I declined but suggested that we could help them open an account at Barclay’s Bank where the money would not only be stored, but would also earn interest for them. So off we all trooped to the bank where information was recorded, thumbprints were recorded and the cooperative was legally connected with its first asset.

The next discussion was about the amount of the fee they were going to pay for our services. Again, there was great surprise that a “rich” organization like ours should charge fees to provide assistance to “poor” people like them. Nevertheless, hard negotiations ensued and a fee was eventually agreed in exchange for a set of services that included business planning, management training and technical (production) assistance. The fee was less than 1% of what we expected to spend on assisting the project but they didn’t know that and the fact that they were paying it made it clear that we were working for them in this deal. It was their money, their risk, and their responsibility to be sure that they got full value for their money – and it worked.

The best client partners select themselves.

Every enterprise development program starts out with a set of criteria that it will use to select the companies that will be eligible for its assistance. A strict, top-down application of too specific criteria can result in the waste of a lot of time, effort and money. Eligibility criteria should generally be loose enough to enable far more companies to qualify than can possibly be assisted directly.

The most successful projects I have been associated with have used the following system effectively. First we publicize and demonstrate the value of the services we are able to offer and invite a large number of potential clients to meet with us to explore how we might work together. After a fairly brief period of confirming that a company does satisfy the basic criteria we begin doing some background research on the company and ask them to provide us with certain information. We do nothing else until that information is provided, at which point we will go to the next step that will require some other action on their part. This process continues throughout our relationship with a company. In some (many) cases it is a short relationship indeed when the companies are clearly more interested in what we can do for them (e.g. give them a grant) than they are in what they can do for themselves. In other cases, clearly the best ones, the relationships are long and productive with a lot of learning on both sides and shared responsibility for making things work. To the occasional consternation of some of my colleagues I am sure, I am forever making sure that they are always leaving a meeting with the ball in the other guy’s court – he or she has something to do that will justify our going the next step with them.

Things are most likely to get off-track with the consultant/helper/adviser starts driving the deal with a particular client/partner company because of his or her need to “make the numbers” as laid out in a design document written by partially informed program planners from far away months or years in the past. Once the agenda is “ours” the donor is likely to sit back and watch things happen, if he or she does not become overtly resistant to the changes mandated by field realities. Nevertheless, it is necessary that there be some kind of accountability on our programs. The way I have learned to satisfy these sometimes contradictory needs is to be sure that the portfolio of development activities and clients is large enough that we are not forced to push anyone beyond their natural limits to achieve them. If we are working with 25 or 30 clients at any given time, chances are that there is always something useful to be done with some of them. The others can spend the time they need to process earlier recommendations or just do something else if our work with them is not their top priority at the moment. If our attention is focused on only a handful of companies that satisfy a strict set of finely honed eligibility criteria, chances are that making “progress” in the short term will be more important to us than it is to the client. I have never seen this role reversal end well.

Honesty is the best policy.

I have found many times in my career that the best advice I have for clients is something they do not want to hear. Many company owners come to us with their desire to enter the export market with their product because someone has told them the price at which they saw similar products selling in American supermarkets, or because the Europeans are all rich and will pay big money for their product, or because the people in their village all agree that theirs is the best product of its kind in the world, or, or, or. . .  Most often a more careful analysis will show that there are certain flaws in their arguments and that there are, at best, a number of substantial things that must be accomplished before the riches of the export market can be brought into focus. The packaging needs to be developed. Product quality must be standardized and certified. Volumes must be increased. Etc.Etc.

While I am reluctant to tell anyone that their dream just isn’t likely to happen, I do try to make them understand the difficulty of what they must accomplish for it to come true and help them to find other tracks to follow with their business. Tracks that will lead back to the export trail eventually if they are done successfully. There are, of course, times when we have to tell people that we just don’t know how to help them get where they want to go. We should be honest in those cases as well to avoid wasting our time and the client’s.

In Armenia, my team worked with a number of companies with, in our mind, unrealistic dreams. We did not want to kill the dreams, or dissipate the energies such dreams generate, but neither could we encourage them in their pursuit of unrealistic objectives. In most cases we were able to help them address themselves first to the domestic market where they can perfect their product, develop appropriate quality control systems, increase their production capacity and start to generate some meaningful cash flow. Several companies passed through that process and are now able to address themselves to export markets more realistically. If we had started off helping them go to trade shows with their ill-prepared and poorly packaged product, they would have only failed, wasting our project resources and probably becoming discouraged. Others can do just fine securing a profitable place for themselves in the local market and avoiding the complications, costs and risks of exporting.

Not everybody wants to be your partner.

It is important to realize that developing productive consulting partnerships can be HARD. Some clients are convinced that they simply need us to give them a grant, or bring them a big buyer or help them get an important piece of equipment. They are really not interested in the other contributions we bring to the table.   Sometimes they are right – and there are commercial banks and marketing agents and consulting firms available in most places to provide whatever single factor they think themselves to be in need of. I have had many very unsatisfactory interviews with entrepreneurs who have all the answers and just “know” that my job is to write them a big check so that they can avoid the usurious banking system and get rich quick with their can’t-miss scheme.

A purely financial program, otherwise known as a bank in most instances, is set up to evaluate those proposals and make a purely financial decision based on risk and return calculations. The programs I have worked on are different. Our goal is to help the people to succeed who do not have all the answers and might need some help in strategic planning, financial management, branding, quality management, market development, etc. Many of those who start out with a simple request/demand for financial assistance eventually come back requesting the more comprehensive program that has the possibility of helping them reach their objectives.

While I have most often been engaged with private sector partners (SMEs and farmers), I have had considerable success using the same principles when working with government agencies and other organizations as well, but we can save those stories for another time.

If I have managed to either pique your interest or provoke your ire in this post, please go to the comments box that appears after the footnotes below to share you thinking. I would really like to share the experience the rest of you have had in this important area. And don’t forget to scroll back to the top and sign up to receive future posts in your email box automatically. I promise there won’t be too many and I will try to make them both pertinent and interesting.

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