Did you know that nearly 70% of the world’s top economic entities are companies — not countries? We know businesses and corporations hold enormous power. And when social entrepreneurs partner with companies, they can move beyond what was possible on their own.

In 2018, Ashoka surveyed its network of Fellows in Africa, hoping to better understand their perspectives and best practices for working with the private sector. We learned that social entrepreneurs are very open to working with businesses — 97 percent said they see businesses as valuable strategic partners. In fact, 83 percent already work with corporate partners.

At the same time, most Fellows reported that the worlds of business and social impact are still too separate. The hard part: finding like-minded business partners.

From misaligned business incentives to conflicting values, there are many obstacles to forming effective partnerships. However, case studies in Ashoka’s recently released report reveal guiding principles and practices integral to collaborative, mutually beneficial partnerships.

Social and Business Co-Creation 101

“Social and business co-creation” is a collaborative relationship between companies and social entrepreneurs leading the way to solve social and environmental problems.

This relationship offers opportunities on both ends: Social entrepreneurs want to work with business to further their impact, and consumers want to see business be more socially and environmentally conscious. The relationship can also help companies to shift their corporate culture and priorities to focus more on people, not just profit.

Ingredients for Effective Co-Creation

According to insights from experienced social entrepreneurs, here are six key ingredients for a successful partnership.

1. Recognize the strategic business opportunity.

It’s important for the private sector to see that investing in a social entrepreneur is not charity — it’s a savvy business strategy. Social and Business Co-Creation is an investment in a business’s long-term profitability, because consumers increasingly express preferences for companies that have social missions.

Focusing in on Africa, the continent is full of overlooked and underserved markets. The continent is developing rapidly, and conventional wisdom that low-income, rural residents are not viable consumers is quickly becoming obsolete.

2. Prepare for the future by balancing short and long-term interests.

Corporations frequently eschew long-term gains in favor of short-term profit. Social entrepreneurship, however, operates with a long-term vision of changing systems, which can be at odds with pressing corporate incentives. Both parties must acknowledge these conflicting interests and agree to a business model that offers short-term successes as well as the long-term sustainability necessary for true social change.

3. Establish a win-win model.

Each party in a co-creative partnership must ensure that it is actively enabling its counterpart’s business and social objectives. Although this sounds easy, the goal needs to be revisited frequently to ensure that the win-win dimension is still intact.

4. Put the mission first.

Merging different cultures, business practices, and working styles can be a barrier for a growing business partnership. Anytime there is conflict or a disconnect, “return to the mission” — mission focus is your new business culture, because at the end of the day, both institutions have signed on for the same social outcomes.

5. Build on hybrid financing models

Hybrid financing models lend greater effectiveness and smarter financing. Many social entrepreneurs have blurred the traditional borders between the concepts of for-profit and nonprofit by carefully engineering a range of activities that can be funded by different types of financing, from grants to impact investments.

6. Commit to ethical and transparent business practices.

Corruption, kickbacks, and nepotism are still common, so it‘s important that each party agrees to a code of conduct in order to preserve a constructive partnership. This kind of partnership is made possible by building trust early on in one another’s capacity to make important decisions based on the right motivations.

This article is adapted from a report prepared for Ashoka by Stephanie Schmidt, Jess Mills, and Lynsey Farrell.

Interested in learning more about social entrepreneurs who have built successful partnerships with companies? Stay tuned for more stories.