I’m sure many of you have heard this standard uttered lately by billionaire entrepreneur, Marcus Lemonis of NBC’s “The Profit”.
Perhaps you mistakenly think he coined the phrase?
Mr. Lemonis is definitely someone to be admired, and he’s successfully used this event-driven business management tool better than most. He defines a good investment as one that has at least two of the three P’s covered.
The truth is, the methodology itself has been around for a long time now. It exists in every successful business, industry, niche, system, etc. Any successful business owner can likely identify this process in their own business, even if they’ve never put their management practises into this context.
If you have a failed business or two under your belt, the 3P’s could have saved you. If you’re starting a new business, or need to revamp a struggling one, the following information should be invaluable to you.
Defining the 3P’s
You’ll find a “3P” process in nearly every industry.
For instance, in manufacturing circles the 3P’s could stand for (Production, Preparation, Process) – the “People” and “Product” elements are lumped in with the entire production process, while this industry also puts a larger focus on their “Preparation” part of the process.
Without making things too complicated here: The 3P’s always contain much of the same elements; they’re just interchanged and moved around to suit the established process of a given industry or individual business.
Sometimes a fourth “P” is also added for “Performance” (see this article.) Though most 3P models incorporate performance elements into both the people and process model. It’s all subjective, but the core ideas are always the same nonetheless.
So enough of the digressions, let’s get on with how “People”, “Process”, and “Product” can help you create a successful business model and/or revamp existing ones that need a little kick in the pants to get profits flowing.
I’ll go into detail about the people and process elements below; a more detailed product creation and tweaking post will come in the future. It’s a fact that most businesses fail due to problems with the first two, not the product/service itself.
People, as you (hopefully) know are always integral. Even if you’re a one-man or woman operation, the business can’t survive without bodies filling the seats and keeping the proverbial “wheels” turning.
There’s much more to this part of the 3P’s idiom than just filling seats, taking orders, completing deliveries, completing sales, selling, yada-yada-yada. Of course most of you understand what the people in your company do.
According to Arman Sadeghi, the “right” people make you profitable, the wrong generally don’t. If you, as a manager don’t audit your people, and only bother with them when there’s a customer complaint or other problem, such as tardiness or absences, you’re missing the point.
- Watch your people work, ask them questions to determine their attitude and efficiency (poor attitudes create tension that will find its way to the rest of the team and your customers, thus affecting both the process and product(s).)
- Ask them if they’re satisfied, see if there’s something within reason that you can do to make them better at their job and happier doing it (often you’ll learn more about other employee problems and flaws in the company process when you do this on a semi-regular basis.)
- Train your people frequently (via outsourced trainers that have more expertise than you, in areas that matter to your business’s bottom line – this improves both your process and product(s).)
If it weren’t for the fact that people are so crucial, the process could easily be first on the list. If you don’t understand the key to successful franchises, and national, international and global corporate structures, you do now!
Success on a large scale is all about the process!
It’s equally crucial at smaller levels…
The process starts at the conception stage (i.e., product/service development) then moves the company along through the hiring of employees, marketing, accounting, expansion, etc.) If defining a business’s process is a difficult concept to understand, think of all the information that’s required for a business plan: Write a Business Plan – That’s the process.
There’s more to it, and your unique process will vary depending on what industry you work within. ISO certification was created so investors and the public can be assured that a company’s “process” is profitable and also compliant with other laws and regulations that need to be met, to avoid hiccups from happening; such as fines, lawsuits, and other unforseen expenses.
- Bring in the right people to audit your process (the earlier-on the better, during the business/product conception process is even better, and get people who know more than you do to analyze – don’t micromanage your process: design, HR, marketing, manufacturing, accounting, etc.)
- Identify a business modeling process early-on that works for your company (there is so much to do and learn here, which is why your people – employees, consultants, other – are so crucial. Change/tweak the process as needed.)
- Constantly audit the process, preferably in a two-fold approach: In-house and out (your regular employees need to give feedback to identify ways to streamline and improve; a good consultancy firm or trusted mentor should also be consulted for contrast.)
Rather than define what a product is, how to create it, improve it, etc., I think I’ll refer you to some excellent sources instead. You always have to tweak the process and the people involved with a product, but once you’ve developed a successful product it’s done.
The same goes for a product that happens to be a service – if you’re adding new elements to it or changing it completely then you’re either: a) Adding an element or two to an already successful one, or b) Re-vamping, re-branding, re-strategizing entirely (i.e., launching a new service.)
If you’re going to innovate or improve, often that’s a matter of launching a totally new product or service to compliment your existing one. valforex.com, for example, add cryptocurrency trading feature to their existing line of products, enhancing the value proposition offered to the market.
Useful Product/Service Creation Links:
- http://techcrunch.com/2011/04/24/what-should-you-do-with-your-crappy-little-services-business/ (Note: this one has a long intro, but the meat of the article is toward the end.)