5P Synthesis – An example for planning a new business

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: To held other companies evolve.

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: We offer guidance and advice for identifying and solving business problems.

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: To help companies evolve by supporting them through identifying problems, finding and implementing solutions. To help people working in those companies improve and through these, to have a positive influence on them.

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? The needed profiles – people experienced in management, information technology savvy.

With the profiles in mind, we can go back to Portfolio, to make its content more concrete: We use the experience and knowledge in management and information technology to introduce Agile Management and Digital Core services, 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:

• Management tools development skills
• Information Technology knowledge and experience
• Business modelling aspects

… and accommodating the existing profiles influence again the Portfolio part: We use the experience and knowledge in management and information technology to introduce an adapted combination of Agile Management, Digital Core and Business Modelling services.

Furthermore, we mentioned in Positioning part that we want to help people in Client’s organization to evolve. People analysis showed the capability and willingness to develop and introduce management tools. So, finally, the Portfolio will contain:

• Agile Management Services
• Digital Core Services
• General methods and tools
• Business Modelling Services

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: Targeting European clients in need of strong Digital Core infrastructure.

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 The business situations where we can offer concrete help by combining those portfolio elements (e.g. business starting up, business scaling, business turnaround, etc.)

We have now the company situations, can we position them to our potential clients in a meaningful way? Yes, we define The Company Journey concept 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 business 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.