I had a powerful reminder recently of the transformational power of public-private cooperation to solve world problems and create economic opportunity. For chief communication officers (CCOs) helping their enterprises think about how to create social value, there’s a good lesson here.
The occasion was a dinner in New York City celebrating the 30th anniversary of the Brady Plan, introduced by U.S. Treasury Secretary Nicholas F. Brady to convince banks to voluntarily reduce suffocating levels of debt in Latin American countries in return for market-based economic reforms in those countries. The previous decade had seen other attempts to solve the debt overhang devolve into ever-more-onerous levels of debt.
Brady had no authority to do this. It required privately held banks to write down the face value of debts owed to them in return for government promises to reform economic policies. Smart bankers knew that the debts were unlikely to be repaid, but there are powerful disincentives to forego attempts to collect. The key was to convince competing banks to act in concert with each other and with foreign governments.
Success was not guaranteed, but due to diligent efforts by Brady, supported by bankers, lawyers and diplomats, the plan actually took hold. The potential for a global economic meltdown was averted. A mountain of debt was removed. Free market economic policies encouraged economic growth and opportunity. Millions of people in developing countries were given a chance to build a better life. And the cost to the American taxpayer was exactly $0.
A group of Brady admirers gathered with him at The Americas Society in New York to celebrate the anniversary, including luminaries like Warren Buffet and Henry Kissinger. I was privileged (along with Jay Powell, the current chairman of the Federal Reserve Board), to be a member of the Brady Treasury alumni group that was invited.
After hearing many tributes to himself, the ever-self-effacing and under-stated Brady thanked the “capable people of the Treasury” and President George H.W. Bush, his close friend, who had “the encouragement to tackle complex problems and the backing to see it through.”
For chief communication officers (CCOs) seeking to help their enterprises create social value, this is a reminder of the power of public-private partnerships to solve problems together. We may not have the convening power of the Treasury secretary, but we can advocate for cooperation. As Harvard’s Michael Porter argues in his ground-breaking work on Shared Value, companies should work “across profit/nonprofit and private/public boundaries,” rather than “attempt[ing] to tackle societal problems on their own.”