The public and private sectors have a lot to gain by working together on disasters. The private sector can help humanitarian organisations improve how they get people, goods, money and information to disaster zones. In return, companies can learn valuable lessons about working in extreme conditions and make a positive contribution to society as well.
“Humanitarian organisations recognise that the private sector can help with resources and expertise, while the private sector is looking for opportunities to improve its impact on society through responsible actions,” say INSEAD Professor Luk Van Wassenhove and Researcher Rolando Tomasini in their new book Humanitarian Logistics. “Successful partnerships help to improve the competitive advantage of both parties as a result of the exchange of best practices and knowledge.”
Until recently, humanitarian organisations undervalued logistics in disaster operations. Due to a lack of funding, they responded to crises as they happened with little advance preparation. But that attitude is now changing due to several factors. One is the increasing frequency, complexity and severity of disasters, such as the Asian Tsunami in 2004, Hurricane Katrina in 2005, and the earthquake that struck Pakistan the same year.
Another factor is high visibility. The media now broadcast disasters directly from the scene to audiences worldwide in real-time. They also broadcast the difficulties humanitarian organisations sometimes have in responding to disasters. This immediacy of information has set high expectations for organisations to respond rapidly and efficiently, and to be better prepared for the next disaster and collaborate with all relevant parties, including the private sector.
In Humanitarian Logistics, Tomasini and Van Wassenhove identify areas in which humanitarian organisations can collaborate with the private sector to improve their responses to humanitarian crises. The book is based on seven years of research and collaboration with private companies and humanitarian partners, such as United Nations agencies and the International Federation of the Red Cross and Red Crescent Societies.
While humanitarian organisations were learning to recognise the benefits of logistics, the private sector was beginning to realise it could play a broader role in contributing to society. For example, companies have long supported humanitarian activities but mostly in their home countries. But as they expand their operations around the world, businesses have come to realise that supporting humanitarian activities wherever they operate should be part of their overall corporate social responsibility (CSR) strategy.
Companies also realised they could do more than give cash. They can also offer expertise, technology and other resources to help humanitarian organisations improve their supply chain management, something at which the private sector has managed to excel by focusing on the interaction between the numerous players involved, as well as by developing appropriate information and communication technology platforms. In addition, the profit-and-loss logic of the business holds private sector actors together.
But the private sector can find that working with the humanitarian sector on disaster response poses challenges different to those of a commercial operation, such as the heavy physical and emotional toll on people that working in a disaster zone can entail.
In addition, humanitarian organisations often must make do with a limited number of qualified personnel, damaged or inexistent infrastructure, politics, and (as a result of the current financial crisis) less and less funding.
On the other hand, humanitarian organisations have become extremely agile and adaptable after years of working under challenging conditions and can offer this knowledge to their private sector counterparts.
By working together on disaster relief, they can learn a lot from each other and so become more competitive through the exchange of their best practices. This might not always be as easy as it sounds due to their cultural differences but the two sides have no other choice.
“Disasters affect companies and communities alike so it is natural that employees and customers will ask the companies to get involved,” Van Wassenhove says. “Humanitarians on the other hand are running out of money and need better trained staff. There are so many disasters, and they're getting bigger and the funding is drying up. So you have to work together whether you like it or not.”
“Some of these humanitarian organisations are unable to hire overnight for short missions the senior expertise that these companies have,” Tomasini adds. “But they might, if they have a good partnership with a company through which they can have quick access to these experts. That's what we're talking about -- going beyond just goodwill or written contracts and actually collaborating.”
While the frequency and scale of disasters have increased markedly over last few decades, the humanitarian world has changed as well. Coming from a low level of competency in supply chain management and a distrust of business, more and more humanitarian organisations have come to accept both. Likewise, the private sector is coming to the realisation that partnering with humanitarian groups will bring with it new knowledge and result in some currently much-needed goodwill. Such partnerships also promise to help ease the suffering of countless disaster victims worldwide.