At the same time that the public is asking government and nonprofit organizations to be more effective, produce demonstrable results, and make more of the public and philanthropic capital invested in them, it is also asking businesses to take more responsibility for the well-being of the communities in which they operate. Given these heightened demands, more and more leaders are finding an innovative answer both to community problems and to the furtherance of their own long-term interests.

Healthy communities are a competitive advantage. In the intensified global competition for talent, the quality of the community in which an organization operates can create a competitive edge. Morton Mandel, former CEO of Premier Industrial Corporation, explains that his business community's activism was "fueled by our growing concern about the image Cleveland had nationally and internationally, and the impact of that image on how people might feel about joining our companies or relocating to Cleveland." Likewise, Marilyn Carlson Nelson, CEO of the $20 billion Carlson Companies, says, "The quality of life in the Twin Cities and in Minnesota is the differentiator for us. It is what attracts the best and the brightest. In this competitive environment we have all needed to create an extra edge for our community and ourselves." The message is clear: sick cities seldom produce a vibrant business sector.

Community service makes better leaders. Senior executives are finding they gain personal satisfaction from community engagement and enhance their leadership skills. General Mills CEO Steve Sanger points to three benefits: "One, you find that you can really contribute; two, you meet other people in the community that you enjoy interacting with, learning about, and getting to know; three, the time spent on problems away from the direct business problems is helpful in giving you a broader perspective that helps you become a better leader within your organization. I tell people here all the time, 'we support your volunteering not just because we know you'll help the community, but because we believe that volunteering helps you be a better leader.'"

Service is part of the local business culture. Some cities appear to have a long history of civic activism by business leaders, so community service is embedded into the business culture. In Minneapolis, James Campbell, president of Norwest Bank Minnesota, says, "There's something magical here, a feeling of responsibility, of giving back to the community and making everyone's life better. It is an ingrained expectation. One example is a global corporation that feels the incredible involvement of business leaders here. There is an inescapable expectation that every CEO must be involved in making this a better city." The effects of this long tradition can be powerful. Leaders build a base of shared values, learning, and experience that makes the business community itself more vibrant. Strong community service norms can be a powerful force shaping leaders' behavior.

With the growth of public-private partnerships, we are learning what it takes to make them work. Indeed, we know that for cross-sector partnerships to work, leaders must ensure participation, build relationships, create value, and achieve accountability.

Ensuring participation. It was common in decades past for business leaders, often operating through business leadership coalitions, to exercise power secretively with their government counterparts. But that decision-making model, which had CEOs striking deals with mayors and governors behind the guarded doors of private clubs, has been disintegrating. As Thomas O'Brien, former chairman of Pittsburgh's Allegheny Conference on Community Development (ACCD) says, "It's not like the old days when banker Mellon and Mayor Lawrence would get together and just do it. You need to draw a much larger consensus to get things done. The real challenge is to broaden the participation to those sectors that are creating and driving a lot of the growth, and at the same time not to dilute the power or the effectiveness of the Conference."

Atlanta's business leadership coalition, Central Atlanta Progress (CAP), focused on expanding its sphere of influence by "building a bigger tent," as CAP's chairman, Duane Ackerman, chairman and CEO of BellSouth, puts it. The consolidation of businesses has also meant that some members are top executives of their companies in the area, but not the CEO. Charlie Battle, the current CAP president, says, "We have a much broader membership now. We are not just downtown organizations and we have everybody from huge corporations to nonprofits that are members. You have to put together those kinds of partnerships to make things happen."

The process of partnering can be as important as the substance. For example, in 1987 Detroit Renaissance proposed a needed strategic plan to tackle the city's social and economic problems comprehensively. Mayor Young took umbrage at the business leaders' unilateral presentation of the plan, as it made his administration appear unresponsive. Consequently he never supported the effort. (For an illustration of the importance of community participation, see sidebar "The Atlanta Project.")

Genuine participation in collective decision making demonstrates respect, and respect fosters trust. But Richard Stafford, ACCD's executive director, points to a trade-off: "The more inclusion you get, the more power to influence you have; but the less ability you have to come to a conclusion." Reaching consensus in a public-private partnership will often test the patience of business leaders used to quick decision-making processes. Entering into such partnerships is analogous to doing business in a foreign country. The culture, the language, the form of interaction are different, and the most successful international business people are those who study, understand, and respect the different cultural norms and expectations. Furthermore, they learn at least the basics of the other's language and culture to communicate effectively. The resultant broadening of leadership, communication, negotiating skills, and general knowledge makes them better managers back in the business.

Building relationships. The new partnerships of business and government and nonprofits do not just happen. They are built. As business statesman David Rockefeller put it, "One has to make an effort to get to know the leaders in government, and make them feel that you're not there as supplicants, but that you're there as citizens who are trying to work with them in jointly doing something to improve the city and the state." But Rockefeller also pointed out that "nonprofit and government leaders need to have a positive attitude towards business, be cooperative and not denigrating, and recognize the role of business is very important."

Relationships between business and government are often particularly fragile and can easily turn sour. A bridge-building mind-set and an array of political skills are critical for the executive directors of the business leadership coalitions. For example, the recently recruited executive directors of Detroit Renaissance and the Minnesota Business Partnership were formerly leaders in their states' legislatures and seen as highly skilled in relationship building. Similarly, the executive director of Central Atlanta Progress from the early 1970s to the late 1980s was described by a colleague as, "steeped in the political wherewithal to get things done."

At the heart of strong relationships are respect and trust. A community leader and CAP member explains the difficulty: "The biggest challenge is establishing an effective working relationship among all of the parties, principally business and government and the community activists. The community activists basically don't trust the business people, and the business people, in a sense, don't trust them. They don't trust our motives, and we're not sure we trust their methods." ACCD's O'Brien, based on his frequent interactions with the mayor of Pittsburgh, counsels, "Even if you had a disagreement with the political philosophy, you would still have said, 'we all live here and we all want to make this a better place,' and throw those things aside and work at it. The reason that we've been successful is that we've got our hand into all the discussions with a basis of trust -- trust between the private and public sector."

Creating value. The power of collaboration comes from combining partners' core competencies in mutually reinforcing ways. Business needs to contribute what it does best. Michael Bonsignore, CEO of Honeywell, says, "Getting the business community to step in alongside government and nonprofits -- not to take responsibility away from them, but to bring management methods, communication, prioritization, structure, and discipline to allow them to function more effectively -- ends up a huge win-win." Businesses have considerable competency in problem analysis and planning. The business leadership coalitions in Pittsburgh and Cleveland added value by providing higher-quality analysis of priority problems, often in partnership with local research centers. Both of these business leadership groups were also active in planning regional development strategies formulated with broad community participation.

Public-private collaboration in Minneapolis created the highest possible value -- it saved lives. In the summer of 1996 the city was shocked by a record 40 murders. The New York Times labeled the city "Murderopolis" because its per capita homicide rate exceeded New York's. The governor sent the state's National Guard reserves into Minneapolis and asked Honeywell to help fund a consultant to work on this problem.

Instead of just paying for a consultant, Honeywell's CEO used his influence to mobilize a coalition of other business leaders, judges, law enforcement officials, community leaders, and nonprofit groups. The objective was simple: have a safer summer in 1997 than 1996. The group focused on immediate problems of guns, gangs, and drugs, with a community prevention approach and also began tackling the structural problems of jobs, housing, and neighborhood revitalization. The coalition brought together groups that did not know each other, such as different law enforcement units and community organizations. The corporations helped coordinate efforts by providing management practices for interdepartmental communication, prioritization, and performance measurement to a diverse and dispersed set of public-sector institutions.

The coalition's effort (Hope, Education, Law & Safety, or HEALS) reduced the number of murders the next summer to seven and attracted the U.S. Attorney General and Secretary of Labor to the Twin Cities to see how complex problems can be tackled through cross-sector collaboration. Honeywell Foundation president Patricia Hoven explains, "It's not about money or Honeywell getting credit. It is about leveraging the unbelievable perceived leadership ability to bring multiple groups together and to be a bridge between the public and private sectors... We are seen as an objective party, as are other business leaders in the coalition. Moreover, the second objective of creating jobs and revitalizing neighborhoods will never happen without private sector CEOs' being involved."

Of all the business leadership coalitions, Pittsburgh's ACCD has perhaps moved most aggressively in creating an accountability mechanism. In 1993 ACCD commissioned a "White Paper" on economic revitalization by Robert Mehrabian, president of Carnegie Mellon University. This paper led to the 1994 formation of the Working Together Consortium (WTC), a committee with a representative cross-section of stakeholders from business, education, labor, public and community agencies, and philanthropies. ACCD works closely with WTC and some leaders sit on both boards. In addition to reporting on the community's progress on carrying out its economic development agenda, WTC also fosters the creation of other partnerships to implement the agenda.

Keeping the torch lit. Many communities and organizations are recognizing the need to engage the next generation of collaborators. This challenge has been complicated by the globalization of businesses, which not only has CEOs on the road more but also multiplies the number of communities companies are interacting with. The headquarters' community does not have the same preferential call on corporate resources that it had in the past. Mergers and consolidations lead to larger and different companies, which often disrupts long-standing relationships between business leaders and their counterparts in the other sectors. There is increasing scarcity of CEO time. Thus, just as there are growing pressures and expectations for higher business engagement with the community, there are also conflicting constraints on such involvement. Carlson Companies CEO Marilyn Carlson Nelson says, "There are trends in business that are undermining our sense of place, and threaten to undo the good so many have done. Our corporations, however global, must not be stateless -- homeless. If that happens, our corporate cultures will be soulless and we will fail."

To address this challenge, some cities have created civic leadership development organizations (for example, Leadership Cleveland, Leadership Atlanta, and New York's David Rockefeller Fellows Program) that engage upcoming leaders from the business, government, and social sectors and in shared learning and interaction. The purposes are to increase their understanding of significant problems facing the communities, to create a network of relationships across the sectors, and to deepen their commitment to community stewardship. Margot Copeland, executive director of Leadership Cleveland, says, "The story of Cleveland's turnaround is how we cultivate the ground for leaders from different points of view to sit down and talk together, listen to each other, share information, and then agree on a common purpose." Some corporations lend executives to the business leadership coalitions or to government or nonprofit organizations to provide expertise -- and also to enrich their professional development.