We are in the final stretch of preparations before our annual user conference, TrueCommerce Connections. By now, attendees have heard all about the educational sessions, the networking, and the fun that we have scheduled. But, now it’s time to learn about our keynote speaker, Kate Vitasek, and her research on Vested®, a business model, methodology, mindset and movement for creating collaborative business relationships.
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Kate, before we talk about Vested and its approach, can you take us through some of your professional experience and how it led you to where you are now?
Sure! I’m a faculty member for the University of Tennessee
’s (UT) Haslam College of Business Graduate and Executive Education program and I have spent the last 15 years studying the art, science and practice of highly collaborative business relationships. My work has led to six books on a topic we call the “Vested” business model.
You’ve written six books? That’s impressive.
Well, I have had a fun career that has led to me being so passionate about highly collaborative win-win relationships.
(Editor’s Note: You can find Kate’s books and additional research by visiting http://www.vestedway.com/books/ and http://www.vestedway.com/vested-library/)
Tell us what you were doing before you began your research for the University of Tennessee.
Since my area of expertise is about buyer-supplier relationships, let me take you back to when I really started to find my niche. In 1994, I was part of Andersen Consulting’s Logistics Strategy Practice, now called Accenture, and we were consulting for Microsoft. I loved it so much that I joined Microsoft and led some of their early outsourcing initiatives. It was an amazing experience, but I was hungry to learn the other side of the equation, the supplier side. So, I took everything that I had learned at Microsoft and went to work for their largest supplier. I can definitely say that I would not have the perspective I have now without experiencing all sides of the buyer-supplier relationship.
For the people who may not be familiar with the Vested program, can you briefly explain some of Vested’s underlying principles and benefits?
Vested is mindset, methodology, and business model used to create a true “win-win.” It’s when two business partners seek to develop a common solution and a common bond based on mutual advantage to achieve their desired outcomes. And, our research shows that applying a Vested approach fosters a highly collaborative environment that sparks innovation, resulting in transformation, improved service and reduced costs.
I often use the analogy of a mountain climber and a Sherpa climbing Mt. Everest. Getting to the top of Mt. Everest is their shared vision and they can only get to the top (the future) together. They have a vested interest in each other’s success. A well-crafted Vested deal will mean a win for the buyer is a win for the supplier. And vice-versa.
That sounds very similar to our beliefs around supply chain management, which our Connections attendees have embraced. There are going to be a lot of captive listeners during your presentation. Can you explain your role in the Vested business model?
I am the lead researcher behind the University of Tennessee’s Haslam College of Business Administration research of the Vested methodology, funded by the U.S. Air Force.
The original research request stemmed from the U.S. Air Force to find a better way to outsource. You can imagine the Air Force spends billions of dollars with suppliers to develop goods and services tailored for their needs and they were trying to find a more effective way to work with their suppliers.
Our research team studied some of the world’s most successful business relationships – relationships based on collaboration that achieved real results. These included both governance and private sector buyer-supplier relationships. What we found was the best not only achieved great results, but also achieved transformational, game-changing, award-winning results. We took the learning from our research and codified them into what we coined as a the “Vested” methodology. We now teach Vested as part of our Certified Deal Architect program.
It is important to note I am just one of many who have spent hundreds of hours on our research/publications/course work to help teach the Vested model.
When did you realize your research was birthing something valuable?
It was evident early in our research there was a clear link with the most successful relationships being grounded in highly collaborative win-win relationships. As we dug in, we made the link that success went well beyond saying “collaboration” or “strategic partner,” but to making the shift in the underlying business model itself. The best transcended a traditional buy-sell transactional business model and shifted to a win-win business model where both parties worked together towards shared goals to drive innovation, create value, and reward success. Our researchers also made the link to the fact that the companies were actually leveraging Nobel Prize-winning concepts from Nash’s equilibrium theory to Williamson’s Transaction Cost Economics. The result? We codified our learnings into what we coined as a “Vested” business model.
People immediately got the concept of the Vested and the Five Rules but struggled with how to put the Vested rules into a contract. So, our next challenge (and book) was geared to teaching people how to turn these rules into an actual contract. Simply put, we took the theory and put it into practice with our Certified Deal Architect program.
There will be some people that say Vested is nothing new, is that a legitimate statement?
Yes and no. We definitely didn’t invent anything. Actually, I have heard many say the Vested Five Rules are radical common sense. I agree. We got the Five Rules from studying what was working and what wasn’t. So, they are definitely not “new” in that regard. But what we did new was codify the rules into a repeatable methodology to help understand the why, what and how of the Five Rules. While others talk the talk about collaboration and sharing value, Vested walks the talk and helps companies put the concept to reality. We have one company in Sweden with five Vested deals.
Is there a company type or industry where Vested is more successful than others?
I get this question all the time and the short answer is no. Vested works for organizations large and small, public and private. We have seen the Vested methodology and business model adopted across virtually all industries and markets. We’ve had over 1,300 individuals from over 300 organizations take one or more of the University’s paid courses as part of our Certified Deal Architect program. As I mentioned earlier, one organization has five Vested deals. In addition, we have 13 public case studies
that are available to inspire organizations about the power of Vested. You can access the case studies through the University of Tennessee’s dedicated website to Vested
If someone is interested in the Vested methodology, how do they begin the implementation process?
A good start is to read our first book, Vested Outsourcing: Five Rules That Will Transform Outsourcing. In addition, the Vested site has free/open source online orientation courses that introduce Vested. For those that are interested, we’d love to see you enroll in one of more of our courses. While the Certified Deal Architect consists of six courses – the courses can be taken independently. In addition, four of the courses are online/distance learning courses - including the Creating a Vested Agreement online courses which is designed to be taken by a joint buyer-supplier team where they will learn how to put the Vested Five Rules into practice in a contract. Besides the University of Tennessee courses, we work with a dozen Vested Centers of Excellence around the world who provide hands on guidance and support.
Kate, thank you for stopping by and giving us some insight into Vested. This is going to be very beneficial for our Connections attendees as they prepare for your keynote on May 8. Is there anything that you would like to add?
Just to say thank you for the opportunity to share our research and work on Vested. It is exciting to see Connection attendees being interested in making the shift from more traditional transactional deals to a Vested business model.
Kate Vitasek is an author, educator and international authority on strategic business relationships. To learn more about Kate and the Vested approach, visit www.vestedway.com
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