We, the di3logy partners, have one point in common. We are constantly looking for tools and models that will allow us approach business problems. This is how 5P Model idea appeared and, because it proved useful, why we have it in di3logy portfolio.
5P is a mental model, and got its name from five categories: Positioning, Portfolio, Process, People, Performance. You can use it to group topics, ideas, statements, etc. under one of the five categories. But 5P is more than that. The five categories have a cause-effect relation that can be used for structuring both analysis and synthesis.
The model is based on the extensive management experience of di3logy partners. We introduced it to our clients, we apply it in our own activities and, what is most important, we observe its outcomes of its usage and constantly look for improvements, making 5P Model an evolving tool.
What is the meaning of each P?
Before talking about when and how to use such a model, it is important to clarify its structure. So let’s go through each of the five categories.
Use this category to group topics related to external context. If you are considering a company, it could group aspects related to company positioning on the market, competition, differentiators. On the other hand, if you are think of your department in a larger organization, you might group aspects related to the other departments, position in the organization, etc. And if you not sure about classification, consider that the topics in this category are usually the answers to the WHY question (why does the company exist, why my department exists).
Use this category to classify topics related to the offer. The topics in this category usually answer to the question WHAT (what products/services does my company offer, what services does my department offer to the peer departments). To put this category in the cause-effect relation, think of the items in Portfolio as the ones offered to the external context described by Position items.
This category is obvious, it refers to topics related to people. These topics are usually the answer to the question WITH WHOM, and may include skills, competences, organization structure, culture, roles, etc. From the cause-effect relation perspective you can think of People category as grouping topics related to people performing actions described by Process category, required to fulfill the items contained in Portfolio category in the context described by Position category.
This category is focused on actions that can potentially change the situation/status of items in other Ps. For example, a Career Management process has the potential to change the skill structure of the organization (usually classified in Processes). The Go-to-market process is affecting the Portfolio topics. The strategic management processes affect the Positioning topics. Marketing activities can influence Positioning topics by clarifying the competition and target client segments. The items classified here are usually answering to the question HOW. To understand the relation with the other Ps, you could see Process category describing actions performed by People to fulfill Portfolio items offered in the context described by Position.
No action is relevant if it doesn’t have results. So the last (but not least) category is grouping the results of the other Ps. The items in this category are addressing the question WITH WHAT RESULTS or WHAT IS THE IMPACT? When talking about a business or business unit context, one obvious example is the financial results. Nevertheless, you could add non-financial results that could fit into this category, like to be the in the top 5 players in a market segment.
With this final P, the relationship is complete. We put it already in one sentence in 5P Model offering: Performance groups the results produced by actions from Process, performed by People focusing on fulfillment of the offer contained in Portfolio, addressed to the external context defined by Position.
When the entire 5P system is changed, we are talking about a Transformation. For example, when a company decides to accelerate the business, by repositioning on the market, adjusting the portfolio content, bearing all the implications at people and processes level and with expected accelerated financial results, the entire change is a Transformation program.
How to use it?
Regardless of the context it is used in (business, personal), the model can be applied for analysis and synthesis. The logical order of addressing the categories changes in each of the two approaches.
When performing synthesis activities (e.g. defining a business idea), you usually start from Positioning, then derive Portfolio, People and Processes aspects, then have as the final implications the items in Performance.
When performing analysis (for technical colleagues – reverse engineering), the approach is in a different order. You start with Performance topics, build hypothesis through analysis on things that might be unusual in Processes, People and Portfolio, with a final impact on Positioning. We apply this method in an extensive way, calling it 5P Backwards Analysis.
Why to use it?
You have now an idea about the meaning of the 5P model, so the next question is why should I use it?
There are many mental models available, some with general purpose, some more specialized. We see all of them (including 5P) as tools to help solving different situations. Is 5P model a silver bullet, a solution to all the problems? No, but it can still help you a lot.
We apply 5P model on our own skin and made it evolving into a quite versatile tool. You can use it for business purposes (we used it a lot for defining or analyzing businesses, business units, business ideas, plans, etc.). You can also use it for personal matters (we plan to come in one of the future posts an example).
We encourage you to experiment and see if it helps you. While doing it, be aware that there is no right or wrong in using the model. Through exercising it, you may define your own, useful method to apply it.
Should you need guidance through the process, we will be happy to support.