The Four Ps of Strategy Creation
By Ron Price
When it comes to creating a strategy for your
business, it is rarely wise to move forward with just one carefully thought
out course of action. Instead, it is wiser to encourage vigorous debate and
develop several alternatives as part of the strategic discussion. The best
scenario is to have three to five alternatives that are all so good that you
experience a lot of angst over which one to choose. This process provides
several benefits; among them are better critical thinking, increased
creativity, and a number of alternatives to choose from as the future
Unfortunately, many organizations don't value this approach and they quickly
move strategic discussions toward consensus. As a result, these
organizations often end up caught by the marketplace when circumstances
change. While their strategy may have been great at the time they created
it, factors outside of their control can change the dynamics of their
business and, without alternatives that were developed in their strategic
planning process, they cannot respond quickly enough to leverage an
opportunity or avoid a significant threat.
In order to remain relevant and effective, businesses need some way to
monitor both the execution of their strategic plan and the changing
environment in which they do business. With these management tools providing
input in real time, organizations can quickly adjust course as circumstances
present new opportunities or threats. A simple model made up of "Four Ps"
can help companies create this advantage. These Ps are Perceptions,
Performance, Purpose and Process.
There are six different stakeholder groups you should be listening to
periodically to determine whether you're moving in the right direction.
These six groups are:
1. Customers: How your customers see you is critical to any organization.
Since not all feedback systems work equally to uncover customer perceptions,
you should use a variety of feedback systems. Some examples are suggestion
cards, phone calls, emails, interviews, focus groups, and so on.
2. Employees: You should to track your employees' level of engagement and
satisfaction. Again, you should use a variety of feedback systems to gauge
their perceptions. Your employees have a big impact on your long-term
performance, especially when you're trying to execute changes in strategy.
3. Vendors: In the old world, companies didn't care what their vendors
thought of them. But in the new world, everyone is connected and part of a
greater whole. In developing flexibility with your strategy, all of your
relationships are potential assets that you can draw upon to execute or
change your strategy when it's necessary. So understanding how your vendors
perceive you is important. Do they view you as one of their prime customers,
or as one of the troublesome ones?
4. Regulators: Depending on your industry, you have different guidelines to
follow. Sometimes those guidelines play a significant role in strategy.
Therefore, know how your industry's regulators view you.
5. Owners or shareholders: Whether your company has one or several major
investors, you need to fully understand how each perceives the organization.
Since the person or people who hold the purse strings play a major role in
the company, they have dynamic relevance in terms of strategy.
6. Community: This could include the Chambers of Commerce, the media, the
other significant businesses in the area, or even the government. How these
outside groups view your company can significantly impact your strategy.
Performance relates to the following four questions:
1. How are we doing implementing and executing on our strategy, including
the goals and the timelines? Are we ahead? Are we behind? Are we performing
according to plan or are we in some way out of sync with the plan?
2. What are the current economics of our business? Has anything changed from
what we assumed when we created our strategic plan?
3. What are the operational results that we're producing? If you break these
down to business units or individual strategies or functions, figure out the
actual operational results you're getting. You may be doing a great job
executing on your strategy, but it may not be producing the results you
4. How are we performing relative to the performance agreements that we
established in the organization? The performance agreements are the
specifics of the operational plan that were created in the strategy. How are
you lining up with the milestones for specific initiatives? Or what's
happening with the consequences? Are you getting greater or lesser results
When you review your purpose as an organization, you need to ask the
question, "What has changed?" or "What is or will be changing in the
environment?" Your answer should impact the way you look at your vision or
your long-term goals for the organization. The goal is to look for new
opportunities or to identify what threats may be emerging because of changes
in the environment.
Continually ask, "What has changed internally since we met last?" Do we have
some new strength that we didn't have before? Did we obtain some new
equipment, technology, or intellectual property? Did we get some great
talent that we didn't have before that should be impacting our strategy? Has
there been a new limitation that's emerged since we last looked at this
Based on your answers, you should review whether you still have the right
strategy, goals, or timelines. You also have to determine what you can
redefine and adjust in your plan to improve in any of the areas you've
analyzed. Finally, you need to ask yourself, "Where should we focus our
improvement efforts to create new value in the future?"
All work is a process. It's a series of tasks combined to achieve a
particular goal. Such is the case with strategy as well. There are steps you
go through, there are people involved, and there are processes you have to
look at to determine where you can improve your implementation and in what
order of priority. Are you creating waste? Is there rework? Are there
inefficiencies in your various processes? Are the processes really creating
the results you're looking for? How are you doing tactically? How are you
improving your processes? How should you adjust your resources?
Finally, you should be asking how you can create the sense of urgency and
the accountability to ensure superior execution of your plan. You may have a
great plan, but if you don't have the right sense of urgency or the right
level of accountability in the execution of it, a great plan poorly executed
still produces poor results.
Keep Score for Better Results
Good strategic thinking and monitoring takes the four Ps into consideration.
It's about constantly looking at your environment and adjusting your plan as
necessary. Developing this kind of monitoring system, along with a more
robust development of alternatives in strategy moves you away from rigid
organizational charts toward more team-based environments. As a result,
you're better able to adapt your strategy to the environment while it's
changing. When you implement the four Ps into your organization, you keep
your strategy fresh and don't become stagnant or obsolete in the
implementation of your plan…or in the marketplace.
About the Author
Ron Price is the founder and CEO of Price Associates, a company dedicated to
helping business leaders and entrepreneurs solve problems, identify
solutions and implement change in strategy and performance. Ron is also the
author of "Finding Hidden Treasures," a series of essays with action steps
to aid readers in mining their own inner talents. As the former president of
the AIM Companies, Ron directed the strategic, marketing, compensation and
incentive planning, as well as field training and operations. For more
information, visit www.Price-Associates.com or call 866-442-0556.