Why is a Vested Agreement Different?

In a nutshell, Vested is different because:

• Traditional business relationships are focused on win-lose arrangements where one-party benefits at the other’s expense (a “what’s in it for me” or “WIIFMe” mentality). In contrast, Vested creates a win-win relationship in which the parties are equally vested in each other’s success (a “what’s in it for we” or “WIIFWe” mentality).
• Vested partners are invested in the success of their partner’s overall business. The mutual commitment to long-term common goals fosters an environment of joint innovation and risk mitigation because both parties are in the same boat.
• Vested relationships depend on collaboration, transparency, flexibility and trust. Rather than conventional arrangements where companies buy transactions or services from suppliers, Vested arrangements instead focus on “buying results”.
• A Vested Agreement is built on a flexible framework that follows the Five Rules. Having a flexible framework as a contract foundation is essential.
• The Vested approach leverages the first-level meaning of the common word “vested” and expands its use to embody and convey the principles of Vested®: shared value, behavioural economics, mutual success, and where the “size of the pie” is not predetermined.
• Vested relationships and agreements create value for both parties that did not exist previously. Vested shifts beyond conventional value exchange or a power-based value extraction approach.
• Vested helps companies go beyond the usual lip service of “saying” partnership to helping them contract and manage their most strategic business relationships. Vested relationships have the power to achieve transformational results – often results so significant that many considered them impossible.

Be assured, Vested is not for the faint of heart; it challenges the mindset of senior executives, middle managers, and especially procurement specialists. It often requires the willpower to walk away from an immediate price savings gained from procurement muscle in order to save more money in the future.

It requires committed executive leadership from each organisation. The need for senior management support is true for every major business improvement, whether it is total quality management, re–engineering, or Lean. Unfortunately, many senior executives have reached that position because of their adherence to a conventional approach to outsourcing, and they may be unwilling to change their business style.

Simply put, making a shift to a Vested business model demands a willingness to transcend the conventional win-lose approach most companies take in procuring goods and services.