Be aware that when you read about the 5Ps on various different blogs you will find the order can change i.e. PLOY in one blog may come second and in another it may come last. This in itself suggests the P’s are lined up in order of importance and so you’d better get this right ! Right?
Well actually after looking at these 5 Ps over a very long time I wouldn’t specifically put them in order other than to say PLAN is something that pops up first but is also actually a part of all the other Ps because it is the actual analysis of these that is designed to help you formulate the plan!
Everyone’s view will be different but for me any techniques, aid or acronym is there to help you ‘THINK’ it spurs the critical thinking to encourage you to think about factors that you might not otherwise naturally thought off.
REMEMBER this when you use similar models – they are there to assist you. You are not dominated by the models, you make use of them and therefore you can use them to suit you, but in doing this you do need to make sure you interpret the models correctly and this is where you can land yourself in a puddle of mud by not doing your research correctly.
So here are the 5P’s in Mintzberg’s order
You can read his article on this on his website under articles and in date order this particular one was published in 1987. Is it out of date? Well you must be the judge of that in your evaluation and I would say no. Its still relevant but there are aspects that I felt didn’t fit with ‘all’ organisations and after many discussions with students this also appears to be the case with others.
Starting with PLAN I’m a full on advocate on this. I plan everything as do most and the attitude of ‘letting the wind take you’ in business is not just high risk but to me incredibly short sighted. Every organisation needs to plan whether it’s a business strategy, a new service / product, operations, human resource requirements, finance …. I could go on.
As a Finance Director back then, my PLAN was all about the numbers and cashflow was king. Without planning there is no doubt in my mind that the business would have failed.
And it’s the same with a business plan, how do you know where you are going and how you will get there if you don’t PLAN. Theres an array of planning models you can use at this point to help you get started. My favourite is to SWOT, then PEST and follow on with scenario planning.
Mintzberg’s detail on PLAN is of course more complex and I will say as I did above that Planning fits into everything and needs to be included in the other P’s
I scanned the original article – or at least I think it was the original – and even though the header was clear on the 5Ps I couldn’t find a dedicated PLOY heading. What he does do I write about ploy within his heading of PLAN so combining the two. But to be honest when reading up on this elsewhere; this is the ‘P’ I had a bit of a problem with. PLOY, according to other sites, not original, suggest that it is about tripping up the competition.
Hmm so where is my issue?
Well, I am all for a good thorough competitor analysis and knowing who your competitors are, to not do so would be …well…silly!
BUT if my understanding of Mintzbergs PLOY is correct this takes it a step further to almost interfere with a competitors success. I am not a fan of this. I firmly believe that ‘you’ should be the competition. KNOW who the comparable organisations are and keep your eye on them but get on with your own business. Focus all that time and energy on the positive growth and success of your own companies vision, products and services. BE the innovation, look forward and look at the finish line. Spending negative energy on trying to cause problems for the competition doesn’t sit well with me as time well spent.
And I have to be honest, it doesn’t sound like Mintzberg much either and in his article he spends time quoting others such as Porter and so these opinions on PLOY do unfortunately come from other sources who interpret this. I prefer to think that it is about always being ahead of the game, out witting through your own fast thinking and innovation and pushing forward with your own PLAN. Many will disagree with me on this and there are other theories that take this further such as Game Theory. I get it ! In some industries playing chess with competitors particularly technology based could set one company ahead of the game. I personally deal with smaller companies that actually benefit through collaboration with others and so I’m more advocate for energy on forward thinking rather than throwing darts at others. Hey, if you have the resources, time and finance to spend on PLOY all the best to you.
For me pattern is about two things, internal and external trends.
Internal would refer to the historical information of the organisation, learning from past mistakes but also past successes. This includes the way things are done and I see this all the time when assessing students in the workplace. They speak about the way have improved processes and created workflow patterns that then become instilled in the organisation as part of a continuous improvement strategy. You can see these retrospectively and often a strategy emerges by itself simply by employees doing their job and making small incremental changes along the way.
External prompts a consideration of patterns and trends in the market and in industry and again looking historically how patterns emerge but also whats happening right now. This doesn’t appear to be considered by Mintzberg but as I said earlier, you should use the models to assist you and for me Patterns in the market is something I consider worth analysing.
The analysis of the above would assist in thinking about what your strategy should take into consideration when examining products and services.
This does lead on nicely from PATTERN as you can see that in thinking of trends and the market you must also determine where you sit in that market and where you actually want to be. Without this your strategic plan has no start point or end point. As I mentioned in PLOY a competitor analysis and comparison is always a good way to see how you match up to other comparable organisations. What pricing strategies do they use and what is their USP. What do you then offer that they don’t?
Knowing your POSITION then allows you to think about where you want to be and this largely depends on the industry sector you are in. A small online confectionary is unlikely to compare themselves to Haribo and look to place themselves In the same pond but its worth considering how they operate so they can think about their own uniqueness and who therefore their target audience is.
Finally, your outlook and approach to strategy which will very much include your attitude to risk or rather the organisations attitude to risk. Organisational Culture and structure plays a large part in approaches to strategy. A very traditional company with a top down approach and centralised structure is less likely to take many different viewpoints and can be in danger of missing out on new ideas. The more modern organisation that form a decentralised structure will very much encourage engagement and contributions to the planning stages, empowering its employees to get involved in the vision and direction of the business.
That said it does again depend on the industry sector too. A company that is expected to deliver on traditional products as part of its remit has the opportunity to remain low risk with a low simmering perspective on business strategy whereas a business involved in technology would take a very different perspective needing to be innovative, fast and forward thinking.
Perspective also refers to how you place importance on certain things – like the order of the 5Ps ! But if you take a step back then just like PLAN, PERSPECTIVE actually falls into all the other P’s.
If you read Mintzbergs original article you will see how he interrelates the 5Ps in a lot more detail than I have above suggesting theres is no order of importance – you can download this here….
Learners: If you are undertaking an ILM or CMI NVQ in Leadership and management this post will assist your learning for the following unit / criteria:
703 ML56 1.5 Evaluation a range of perspectives and approaches to business strategy development
500 ML45 1.1 Evaluate a range of strategic planning models
500 ML45 1.3 Analyse a range of perspectives of and approaches to business strategy
700 ML57 1.1 Evaluate a range of strategic planning theories and models.
703 ML56 1.6 Analyse the usefulness of strategic planning tools and theories