A vested pricing model is structured around two things: shared risk and reward. It also focuses on a long-term, not a short-term, view.
Kate: I always encouraged Joe to have a long-term view of how he thinks about money. All too often young professionals take the short-term view, following jobs they hate but that pay well. As the owner of a small boutique consulting firm, I could not offer Joe the same level of salary and benefits that he could have likely gotten at other companies. But what I could offer him was a place where he would be rewarded when he did succeed, as well as an environment where it would be safe for him to take risks to grow and learn.
Joe: I knew working with Kate would not be a pot of gold at the end of the rainbow. She offered something I couldn’t get anywhere else: flexibility and intangible incentives. First, I’m able to live and work anywhere I want, when I want. I choose my schedule, which allows me to focus on other things, such as pet projects and family. Kate also provides intangible incentives by supporting me to devote time in leadership roles at the Warehousing Education and Research Council? (WERC) and CSCMP, and developing soft skills, such as speaking and writing. For example, I’m a co-author of WERC’s DC Measures Study, which I volunteer to do. SC Visions does not make money on the study, but it does cover costs and helps me grow personally and professionally. Also, Kate supports me in becoming a better speaker, and to share my expertise through WERCouncil events and writing articles.
Rule 5: Govern by Insight vs. Oversight
In an effective vested partnership, a company contracts with service providers that are real experts. Such partnerships should be managed to create a culture of insight, not layers of supervisory oversight. A common mistake is for companies to micro-manage their suppliers.
Kate: I think this is likely the best tip I can give for anyone—especially a boss—who is trying to develop a protégé. Don’t micro-manage! Think about it. Do you, as the boss, like to be micro-managed? Rather, you should seek to create a regular cadence for coaching and mentoring your protégé. And use tools and processes that drive insight.
Joe: Kate and I have regular reviews in which we discuss issues we’re having and to create a plan of action for improvement, especially on those goals I named in my Balance Scorecard for Life. In many instances, Kate achieved similar goals to the ones I set and her advice on how to close the gaps on my own performance for those goals is extremely helpful. Most importantly, Kate taught me to put in the processes to help me manage myself. As Kate moves from SC Visions to focus more on vested, I know our mentoring relationship will sustain. The bottom line for me is that following the five rules of being vested created an environment in which I am vested in my success and that is a lesson I hope every young professional seeks.
Developing and sustaining a mentoring relationship is a rewarding experience. It can also help a young professional blossom as a future leader in the profession. We hope this article provides a framework to help you get the most of your mentor/mentee relationship.
Kate Vitasek is a faculty member at the University of Tennessee’s Center for Executive Education and is author of the following books: Vested Outsourcing: Five Rules that Will Transform Outsourcing; The Vested Outsourcing Manual; The Vested Way; Vested: How P&G, McDonald’s and Microsoft Are Redefining Winning in Business Relationships; and Getting to We: Negotiating Agreements for Highly Collaborative Relationships.
Joe Tillman is a senior researcher with SC Visions, specializing in supply chain strategy and performance management. His keen interest in all things supply chain and his high-energy approach to life find him authoring articles for industry publications; acting as a subject matter expert for the American Productivity & Quality Center?; and leading the WERC annual benchmarking study DC Measures.