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 organization to alter itself with regard to both people and processes.

Transformation management also allows the parties and the overall agreement(s) to evolve in a controlled manner. A key theme of Element 8 is acknowledging that the parties are doing things differently and probably not operating in familiar comfort zones. Managing transformation, including transitioning from old to new—along with change management once the new agreement is up and running—is often difficult and complex to implement.

The transformation management element of your agreement should contain these key components, each targeted for different types of transformation.

• It should document a common understanding of how the initial transition of workscope is managed, known as initial transformation management. This will ensure that the relationship gets off to a good start by establishing a clear understanding of the transition.
• It should include philosophies for driving overall transformation initiatives—a continuous innovation management process. This part of the agreement is designed to establish the protocols and processes for how the company will manage ideas that the parties should agree upon and invest in so they can achieve their Desired Outcomes.
• The agreement should contain a process for managing day-to-day continuous improvement efforts or business problems that arise.
• It should include formal change control procedures that update and manage changes to the actual agreement. This is also referred to as contractual document management.

Element 8 is discussed more fully in chapter 7 of The Vested Outsourcing Manual. Also, Vested’s free self-assessment is a useful online tool to help benchmark how well you are applying Vested’s Rule 5. The 10 Elements assessment report will help identify the structural flaws that may be holding you back from achieving transformational success.