The three Ps of business, people, product and process, is a concept that has been floating around for decades and has been used by countless organizations to improve and enhance their performance. While the iterations vary slightly, at its core, the three Ps are the fundamental building blocks for the success of any business. For the franchise candidate, this concept can be a good measuring stick to examine a brand’s offering.
Lee Iacocca, the business executive credited with reviving the then floundering Chrysler Corporation in the 1980s, is quoted as saying, “In the end, all business operations can be reduced to three words: people, product and profits. People come first.”
Around the same time, Toyota was looking for ways to stay competitive and turned to the International Motor Vehicle Program research team at MIT, headed by Jim Womack, Ph.D. Womack coined the term ‘’lean production,” with the core idea of maximizing customer value while eliminating waste, focusing on purpose, process and people.
More recently, multi-millionaire and entrepreneur Marcus Lemonis brought the three Ps of business concept back to the forefront through his CNBC show, “The Profit”, where he invests in struggling businesses to help turn them around. Adapting the Ps for the modern-day marketplace, Lemonis emphasized the core principles that make a business successful: people, product and process.
Let’s examine Lemonis’ three Ps in the context of a franchise business offering:
People: To grow any business, you need the right people in place. First off, does the discovery process carefully consider fit of the business model to the candidate? If a company is quick to the sale, it’s not a good sign. Beyond that, consider the company culture. Is it an environment that fosters growth? Look for clues of a company’s culture in the Franchise Disclosure Document, particularly Item 20 (Read more about what to look for here.) Iacocca says it best, “People come first.” A people-first culture leads to long-term success.
Product: Has the product the brand sells been fine-tuned and optimized? Does it match the marketplace? Has a key target demographic been determined? This is where Womack’s guide to lean transformation “purpose” comes in. Is it the right product to the right market at the right time? Has the brand listened to customers’ needs and created a solution to cater to those needs?
Process: A business must have solid processes in place to thrive. Business management expert, W. Edwards Deming says, “A bad system will beat a good person every time.” What is the model’s track record? Has it been proven? Can the model be replicated when it’s time to scale? After you have considered that, ask yourself whether you can follow that system. Your success depends on your ability to adhere to the blueprint the brand provides.
These time-tested principles have been shown to be the building blocks of success. By examining a business model with the three Ps of business – people, product, process – in mind, you position yourself to make a more informed decision about whether to invest in a business model.
(*Sections of content sourced from Lead On Purpose)