Last time we presented in more depth the 5P Model. Now it is time to come with some examples showing how it can be applied, and how using its strength - the causality relation between its components - leads to results.
In this insight, we will take as example defining a business idea. It is simplified enough to bring some additional light on the possible use of this model, therefore not covering all the aspects and questions you might think when defining a new business, not even the main ones we include in our web site.
Starting Point - Position
As a rule of thumb, we start the synthesis from the Position part, and end on Performance. As you will see, the synthesis is not sequential, but more iterative, so expect to have full or partial iterations while applying the method.
The first question we ask - "WHY would I start the business?" - provides the first topic to be included in the Position category - the mission:
Continuing to Portfolio
Helping companies evolve is a too generic term. We need to be more concrete, therefore WHAT can we offer, as a company, to help our clients evolve? Answering this leads to first attempt to define the portfolio:
Is this offer good enough? In this rough form, not really. It is not explicit enough, nor differentiating enough.
So let's go back to Positioning:
There are many companies on the market offering consultancy services in various business aspects. This means we need to differentiate more from a "traditional" consultancy company - offer not only advice, but also support the implementation of the advice, and make sure the introduced changes stick. And since any organization change starts with people in the organization, we should put people aspects under focus.
This slightly changes the positioning, and the mission of the business:
Back to Portfolio with the new mission defined, we further refine the offer. Guidance and advice is too generic. Can we be more concrete? Sure, especially if we consider People aspects.
Continuing to People
To refine the Portfolio in this case, it makes sense to think of the people. Advisory services are dependent on the profiles of people offering advice, so we answered the first people related question: WITH WHOM are we going to perform the services in the portfolio?
With the profiles in mind, we can go back to Portfolio, to make its content more concrete:
... just to return to more People topics. We revisit the team profiles, completing it with the existing partners' profiles just to identify more relevant points that may influence the Portfolio:
- Can we use Numeric modelling skills?
- Can we take advantage of overlapping complementary skills?
- Can we leverage the passion of the partners for using their experience in management to defining and improving management tools?
These question lead to the following existing profiles:
... and accomodating the existing profiles influence again the Portfolio part:
Furthermore, we mentioned in Positioning part that we want to help people in Client's organization to evolve. People analysis showed the capability and willingess to develop and introduce management tools. So, finally, the Portfolio will contain:
Continuing to Processes
Having a more concrete image of Portfolio, there are two related points to address in processes: how to sell, and how to deliver. Of course, there are more other topics to be included in this section, like support processes and procedures, but we will focus on how to sell, because it usually has influence on the other Ps, as you will see in a moment.
To define how to sell the portfolio elements requires several iterations through Portfolio and Position, but not disregarding People topics.
So far, Positioning referred more to WHY the business should exist, but doesn't mention too much about the profile of the clients. With People having extensive experience in Information Technology, and interacting mostly with European clients, we can add additional Positioning topics:
Thinking further on market segments and how to address and differentiate on each segment will help refining the Portfolio elements, making them even more concrete.
For example: the portfolio mentions a combination of services, adapted for each customer. Can we be more explicit? Of course, we define
We have now the company situations, can we position them to our potential clients in a meaningul way? Yes, we define
... as an umbrella over the business situations were we can offer our Portfolio elements. With this concept in mind, we can mvoe the list of busines situations from Portfolio to Positioning using it to define the Company Journey concept.
Ending with Performance
So far, we identified qualitative topics. The Performance category links together all the ther topics by putting them into numbers. For this example we will not get into the details on how to model them, business modelling is a huge topic itself, but more about how the entire Performance part of the model is influencing the rest.
Performance can be expressed in different kind of numbers. The most used, and obvious, are financial numbers. For the sake of simplicity, we will focus on these numbers only in this example.
When thinking of the new business, we had in mind a very rough idea on where we would like to be, financially, both in terms of revenues and profitability.
Since we just started to define the desired performance, we will address the first question: given Positioning, Portfolio, People and Process, what would be the financial results in the first 3-5 years after business starts?
We answer it by developing a business plan. This plan will rely on assumptions and facts, and defining these assumptions will trigger further refinement on the other Ps' topics.
For example, assumptions on cost of team members may refine/adjust the people profiles needed to provide the services in the portfolio. Or, assumptions on pricing models will help both refining the geographical segments (part of Position), but also how the services will be offered (part of Process).
The Result of 5P Synthesis
After a first round, the content below summarizes the results of the synthesis. It is extremely simplified, so we will not get lost in the details.
We help companies evolve by supporting the through their Company Journey
- Business definition
- Business scaling
- Business turnaround
We help people working in these companies to improve and solve business problems
We target European clients in need of strong Digital Core
Agile Management Services
Digital Core Services
Business Modelling Services
General and specialized Tools and Methods
... all combined to fit the need of a Company Journey situation
Founders' profiles, competences, experiences, skills
Additional needed team members' profiles
Go-to-market processes (tuned for each market segment and portfolio element)
Service delivery processes (tuned for each portfolio element)
Documented assumptions, including facts supporting the assumptions
Do we end the synthesis with Performance category?
Short answer - definitely not.
Longer answer - there are at least two reasons to continue:
The level of details may not be enough. The summary above is definitely very brief, and requires significantly more refinement. In such situation, we can continue the analysis from any point we consider it is not detailed enough, and follow the logical links between the 5Ps to complete and detail the topics.
The resulted business plan is far from the initial expectations. This is usually happening, and it triggers a new iteration:
- we start by understanding why the plan is not according to the expectation.
- we continue by adjusting the used assumptions, or introducing new ones, which will affect the topics introduced in each of the five categories
- we will rebuild the business plan considering the previous adjustments
- ... and if still not reasonably close to the expectations, start a new iteration.
As you can see from this simplified example, 5P model provides more than a structure, it introduces a thinking process.
The entire process is not sequential, starting from Position and ending to Performance. Multiple iterations are the norm, as well as going forth and back in one iteration to clarify, complete or adjust the content.
We saw many people adopting the model having dilemas on clasifying the topics in one of the five Ps. In the such situations when you have doubts, the classification is most likely less important. What matters is the thinking process and the logical connection you are creating between the topics, helping you complete the picture you started to define using 5P Synthesis method.