10 Elements Series Introduction

Far too many companies have developed business agreements that were created for a bygone century. Or worse, they are buying strategic services using an overly simplified commodity approach. When we studied how the world’s most successful strategic business relationships approach contracting, we uncovered some of the best strategies, tactics and tools that organizations have in […]

Element 1: Business Model Map

Vested’s Rule #1 directs companies starting on their Vested journey to focus on outcomes, not transactions. Thus, it makes sense that the first step in the Vested methodology, Element 1, is to understand and document your business model to ensure you are aligned with the underlying constructs of how the relationship and agreement should be […]

Element 2: Shared Vision and Statement of Intent

Vested’s Rule #1 directs companies starting on their Vested journey to focus on outcomes, not transactions. Once the business model mapping analysis is completed (see Element 1), the parties then take the next step—through Element 2—by working together to formulate their joint vision, which will guide them for the duration of their Vested journey. Why […]

Element 3: Desired Outcomes, Statement of Objectives, Workload Allocation

Vested’s Rule #2 directs companies on the Vested journey to focus on the what, not the how. After the initial groundwork (in connection with Rule #1) of business model mapping (Element #1) and developing your Shared Vision and Statement of Intent (Element #2), the real spadework under Element 3 begins: enabling the parties to do […]

Element 4: Top-Level Desired Outcomes

A successful Vested Agreement depends largely on clear thinking and accurate answers to two essential questions: What are the results needed from our Vested Agreement? And how will we know when we get the needed results? Adhering to Element 3 (covered in the previous 10 Elements series) means you have answered the first question by […]

Element 5: Performance Management

Under Vested’s Rule #3 the parties work together and reach agreement on clearly defined and measurable outcomes. A key to good Performance Management—Element 5—is making sure your metrics tightly align with your outcomes and objectives (see Element 4 of the 10 Elements series). Performance Management is necessary and important because Vested is an outcomes-based business […]

Element 6: Pricing Model and Incentives

Pricing is typically one of the top items on the table—and it can be the most complex issue—because getting pricing and the pricing model right speaks directly to the bottom line of an enterprise and its ultimate success. Unfortunately, the approach of many procurement professionals remains stuck the Dark Ages: The focus centers on getting […]

Element 7: Relationship Management

Following the first four rules of Vested helps the parties get to a good Vested agreement; keeping your agreement aligned and smoothly operating hinges on Rule #5, which creates a sound governance structure based on insight, not oversight. The main thing to keep in mind is to manage the business and the relationship, not the […]

Element 8: Transformation Management

One thing is certain: change is a constant. That is why Element 8, Transformation Management, is so crucial to a Vested agreement. Element 8 is the second of the four implementing steps of Vested’s Rule #5, which creates a sound governance structure based on insight, not oversight. Transformation management provides the framework that helps an […]

Element 9: Exit Management

Organizations – especially buyers – often fear that a negative consequence of a Vested Agreement is that they will become too dependent on their partner. They believe this will produce what is often called “lock in” and create too much risk associated with potentially changing providers. If you have structured a sound agreement under Rules […]