Vested® is a business model, methodology, mindset and movement for creating highly collaborative business relationships that enable true win-win relationships in which both parties are equally committed to each other’s success. When applied, a Vested approach fosters an environment that sparks innovation, resulting in improved service, reduced costs and value that didn’t exist before — for both parties.
Vested is based on award-winning research conducted by the University of Tennessee College of Business Administration and funded by the U.S. Air Force. Kate Vitasek has successfully combined her role as Faculty for the Center for Executive Education at the University of Tennessee with her role as Founder of Supply Chain Visions, a Top 10 Boutique Consulting firm. Kate recently spoke to CoreNet about the Vested way of business. Here is some of what she shared:
Q. Where did your research start?
The University of Tennessee is number one in the world in the area of supply chain management research. We have a very large research contract with the United States Air Force. They challenged us to see how business can work together in a more highly collaborative way to generate better outcomes for the Air Force.
The lesson is simple yet powerful. If you aren't getting satisfying results from your partners, it's likely because you are not treating—or paying—them like true partners. More specifically, our research found that most companies are developing supplier and outsourcing agreements that simply pay for people in seats—not for innovative partners who help solve real business problems.
We began to look at other companies and industries to see why some were more successful at outsourcing than others. We found that they approached the nature of outsourcing differently. And that’s where we get the five rules and the term Vested Outsourcing.
Q. What is Vested Outsourcing?
One of our clients said,
Win-win isn’t just a nice thing to say. If you aren’t doing it you’re leaving money on the table.
Basically, a buyer can extract value, exchange value, or better yet the buyer and seller can create value. Vested Outsourcing is a game changing approach to outsourcing that is centered on buying results rather than tasks and / or activities with the conscious effort to use incentives to drive process innovation.
We use the term Vested Outsourcing because we found these successful agreements were the result of a company and its service provider having a vested interest in each other’s success and working collaboratively to achieve mutually-created
Q. What are the "five rules" to create a mutually beneficial outsourcing agreement?
All of the highly successful outsourcing relationships we studied had five things in common:
Q. What are the benefits to a vested outsourcing approach?
A client once told us that this method is “radical common sense.” It creates better competition – creating not just suppliers but solutions because you gain from supplier buy-in and shared interest. When you focus on intended results and not activities there is an increased likelihood of meeting corporate goals and objectives. Moreover, mutually beneficial shared incentives permit innovation and cost effectiveness.
Q. What advice would you give to a company looking for an outsource partner?
The first step in the journey is to take the time to map potential outcomes and outline each other’s goals. Aligning strategic interests leads to collaboration, loyalty and mutual satisfaction, market share, and sustainable profit. Defined outcomes creates a culture where the company and the service provider can maximize profits by working together more efficiently, no matter who is doing the activity.