Vested’s Rule #1 directs companies starting on their Vested journey to focus on outcomes, not transactions. Once the business model mapping analysis is completed (see Element 1), the parties then take the next step—through Element 2—by working together to formulate their joint vision, which will guide them for the duration of their Vested journey.
Why is this vital? If you are establishing a Vested Agreement, you should already be onboard with a what’s-in-it-for-we (WIIFWe) mindset. Most people who choose to adopt the Vested model have experienced firsthand how what’s-in-it-for-me (WIIFMe) thinking can cause relationships and commercial agreements to deteriorate. When creating a Vested agreement, strive together for the win-win. The problem is that businesspeople often have a blind spot when it comes time to collaborate, as illustrated in Ailment #4, the Junkyard Dog Factor.
So the culture and mentality must shift from “us-versus-them” to the WIIFWe philosophy. That’s how transformational results occur under the Vested framework, and it all starts with working on a Statement of Intent that outlines and solidifies the parties’ Shared Vision for their enterprise.
The SOI shifts the focus so that that the parties work together on how they will deliver better value and better performance while generating greater profit potential. Both organizations are working together to achieve a common set of results, essentially laying the foundation of their partnership. Each organization may have different motivations, but by sharing the vision they are vested in each other’s success.
The two-step process of Element 2 is to develop a Shared Vision and then distill that vision into the SOI, which includes both guiding principles and intended behaviors that promote a collaborative, value creation culture between the parties.
The Shared Vision statement is the cornerstone of the Vested Agreement. It sets forth the larger purpose for going on the Vested journey together. The mission at this point is to ask questions until you find the words that represent and define the link between the core purpose of the agreement and the paradigm shift that occurs through collaboration. The Shared Vision statement must be included in the Vested Agreement: it aligns the companies toward a common goal and also transcends the self-interests of each company.
The parties will then develop a formal statement of intentions. This is important because “business happens.” Events occur that can destabilize relationships. The parties must have clearly stated intentions that describe how they will align the business relationship if and when it gets out of sync. Simply put, how will each company behave? Ground rules are necessary for the business relationship in order to avoid miscommunication and misalignment. Sharing intentions through the SOI builds the foundation for the Vested Agreement.
Your SOI should include three components.
- Shared Vision and purpose
- Guiding Principles – a common set of relationship or social norms that drive and support collaboration and trust. These include reciprocity, autonomy, honesty, equity, loyalty and integrity.
- Expected intentions on desired behaviors – this includes gaining consensus and establishing expected behaviors for how you will work together to achieve your Desired Outcomes once the agreement is documented in a written contract. Typical SOI behavior statements overview intended behaviors around:
– Trust and confidence
Developing your SOI is not necessarily easy; corporate cultures and mindsets have to evolve from insularity and self-interest to openness, cooperation and collaboration. You should be in sync on your joint intentions right from the get-go, and you must stay in sync. The SOI does not have to be extensive or highly detailed, but it does need to have teeth, it needs to matter and it is accomplished jointly.
The amount of time devoted to addressing each of the points is up to you and your partner. What is important is to discuss them jointly – and to have full buy-in. Candor is vital; think of the SOI as the pathway past the conventional, the selfish and the short-term. It is essential that the parties feel comfortable “calling each other out” when they see each other not honoring or complying into their stated intentions.