The Power of Public-Private Partnerships
For executives, the real question is not whether public-private partnerships are worthwhile, but which ones deserve scarce leadership attention. PPPs can create outsized impact, yet they also consume senior sponsorship, legal review, assurance effort and stakeholder management capacity. That means leaders should treat them as a portfolio decision: which partnerships are strategic, which are experimental, and which should be stopped before they absorb time without producing measurable public value.
Governance is the difference between a durable alliance and a symbolic initiative. The article rightly highlights top-level sponsorship, but decision rights need to be explicit as well: who approves scope changes, who owns outcomes, how escalation works, and what evidence triggers a reset. For CIOs, CTOs and transformation leaders, the practical test is whether the partnership has a clear operating model for data sharing, reporting cadence, risk acceptance and public accountability across both organisations.
There is also an organisational trade-off that is often underestimated. PPPs ask leaders to balance speed with legitimacy. Public-sector review cycles may slow delivery, but they also protect transparency and trust; private-sector urgency can accelerate innovation, but may create pressure to overpromise. The management challenge is to set realistic milestones, align them to decision gates, and design benefits measures that reflect both commercial sustainability and societal outcomes.
Next questions for executives: What is the minimum governance needed to keep the partnership credible? Which metrics matter to both sides, and which are merely reporting noise? Do we have leaders with the authority and patience to sustain the relationship through staffing changes, political shifts and changing priorities?
How both sectors can collaborate to tackle global challenges.
Current global challenges are daunting.ย Weโreย not on track to reach the Sustainable Development Goals by 2030. In fact, the United Nations warns that weโve entered an age of โpolycrisisโ in which increased conflicts, the climate emergency and widening economic and social disparities threaten our collective future.ย
The public sector canโt address this sobering reality on its own.ย
When well-planned and well-executed, public-private partnerships (PPPs)ย โ where firms collaborate with public-sector entities such as government agencies and international organisationsย โย can be an effective force to tackle global problems. For example, PPPs can deliver (or have delivered) positive impacts inย public health and HIV/AIDS containment,ย infrastructure projects in Indonesia andย education in Pakistan.
PPPs can create value for each partner by leveraging complementary competencies. They help public organisations allocate resources,ย spread risk and foster innovation and knowledge transfer. For companies, they can extend reach, build networks, create jobs, strengthen their brand, improve employee engagement and bring a companyโs coreย valuesย to life.ย
The reality, however, is that PPPs are often more complex than partnerships between two private companies. This isย due to the nature and goals of stakeholders involved but also often due to the challenges that PPPs aim to address. They try to contribute to solving the worldโs most pressing problems by bringing together organisations with different goals, cultures, histories and areas of expertise.
PPP is complicated and both sides have to take a strategic approach to the realities of such cross-sector collaboration.
Working relationships
At their core, PPPs are long-term relationships. Like any relationship, you donโt know what itโs really like until youโre in it. And like any relationship, PPPs need to evolve and innovate over time. Each partnership is different, but we can learn from those that have prospered.ย
One successful example is theย 17-year partnership betweenย dsm-firmenichย (previously Royal DSM), a nutrition, health and beauty company, and the World Food Programme* (WFP) to fight malnutrition. Harnessing dsm-firmenichโs science innovation and technical expertise and the WFPโs nutritional knowledge, the partnership, in collaboration with other partners, has co-created ten nutritionally enhanced foods. These foods help addressย hidden hunger, which refers to the lack of key micronutrients (vitamins and minerals) which affects at least two billion people worldwide. Each year, WFP distributes these nutritious foods directly to 35 million people, while providing technical support to governments to reach an additional 15 million people through social assistance programmes. The partnership also invests in activities that build capacity for countries to initiate and scale up the production of fortified foods includingย fortified rice in 20 countries and educates millions of consumers about nutrition.
Alignment and commitmentย
Oneย of the biggest challenges in PPPs is the time frame. Tackling malnutrition around the world is not a quick fix. WFP and dsm-firmenich are working together to address big challenges, which means progress is measured over years, not months.
How do you maintain these partnerships over such long time periods? After all, itโs inevitable that internal shifts, from boardroom reshuffles to staff changesย and external stresses, such as economic downturns or political upheavals, could potentially impact these relationships. PPPs require a steadfast commitment to long-term change, achieved through incremental steps.
To ensure these partnerships can be sustained over the long-term, companies should seek out public sector partners with complementary strengths who share their values and purpose. As dsm-firmenichโs CEO, Dimitri de Vreeze wrote in aย World Economic Forum articleย in 2022: โCollaborations, however, are never done for the sole purpose of collaboration: it needs to fit into a companyโs purpose and long-term vision.โ
Both dsm-firmenich and WFP have always shared a vision of a world without malnutrition. The partnership serves more people than either could have on their own by leveraging each partyโs strengths:ย dsm-firmenichโs scientific innovation and WFPโs global network and development expertise. This strategic alignment creates opportunities for large-scale social impact.
PPPs must be owned and sponsored by the heads of each organisation. The leaders of each partner must be a vocal supporter both internally and externally of these highly visible strategic initiatives. From a governance perspective, the partnershipโs manager should have a direct reporting line to the top. They must not be housed within a business unit, or they risk being compromised by short-term commercial interests.
PPPs are more sustainable when they are linked to the organisationsโ core strategy and are supported from the top. For example, both WFP andย dsm-firmenich have experienced leadership change multiple times over the past 17 years. Yet the partnership has strengthened over time because leadership commitment has been constant. This has been the case even through the recent dsm-firmenich merger. ย
Negotiating cultural differences
Another challenge with PPPs is internal: the different ways in which each organisation works.
Companies that have only collaborated in the private sector may experience โculture shockโ with PPPs.ย In general, decision-making processes in public organisations tend to move at a slower pace than in most firms.ย This is because public sector organisations, as stewards of public resources, often require extensive consultation and multi-party review of project deliverablesย โ from contracts to targets and reporting โ to consider diverse perspectives and ensure full accountability and transparency. On the other hand, companies can typically take swifter action since they are usually beholden to fewer stakeholders.ย
There is also the reality of market forces. Companies need to earn profits, but public organisations donโt. PPPs need to be structured such that the private partnerโs financial interests are met and they can continue to invest in R&D. This will both sustain impact over time and open up opportunities to address new global challenges. All parties benefit when the business is profitable.
The key to negotiating differences is in the hands of each organisationโs project leader.ย Leaders who manage the PPP have to be more than a technical expert. They act as stewards of the relationship between the organisations, whose primary role is to nurture and strengthen human connections through active empathy. PPPs will be short-lived if relationships suffer. The leader must know when to push, pamper or pause in order to bridge gaps and build connections that drive a shared mission.
The value of trust
Without a doubt,ย trustย โ which we define as โthe business of making and keeping promisesโย โ is the most critical success factor that determines whether or not a partnership lasts.ย
According toย research on interorganisational relationships, trust exists when each party has confidence in the otherโs integrity and reliability. In other words, do partners perceive each other to be competent? Will they deliver and behave as expected? Trust takes time to develop, but can be destroyed in an instant. In practice, itโs built project by project through the way you communicate and follow through on commitments.ย
In management, we say that trust is built and maintained through visual cues. In PPPs, partnerships that are transparent foster a high degree of trust; they donโt exaggerate claims and are honest when results donโt meet expectations. On a tactical level, one way to achieve this is to develop impact reports audited by third parties. More broadly, when progress stalls, partners can strengthen trust by focusing on joint learnings to further their shared mission.ย
Collective efforts for real impact
Essentially, PPPs take time and are hard work. But theyโre vital because the big issues of our timeย canโt be solved by individual actors operating alone.
Effective PPPs need top-down commitment from both sides, alongside a shared strategic vision and flexible project leaders. Above all, they need a strong level of trust between both partners.ย
Companies and public sector organisations need to work together to develop innovative broad-based solutions to address our worldโs greatest challenges.ย By doing so, they can contribute to a better world, while also discovering unparalleled opportunities for meaningful innovation and growth.
*The World Food Programme does not endorse any product or service.
Edited by:
Nick MeasuresAbout the author(s)
Wolfgang Ulaga
is Professor of Management Practice and Co-Director of the INSEAD Marketing & Sales Excellence Initiative (MSEI).
Mauricio Adade
is President – Latin America, Africa & Global Malnutrition Partnerships and Programs – dsm-firmenich.
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