Like many good ideas, the Four P’s Matrix – which now forms one of the cornerstones of my coaching IP – occurred to me unexpectedly, and almost by accident. I was coaching one of my clients and thinking about the challenge they faced in working out all the things they wanted to do in the business and in their life, and finding a way to prioritise them.
It occurred to me that if we could find a way to physically express this and delineate what fitted where, and where the main business priorities lay, we would have a workable tool to help clients to allocate their time more effectively in more profitable areas and make better business decisions.
I have used scaling models in the past. For example, on a scale of 1 to 10, and looking at all the things you want to do, you write them down independently with a numeric value attached to each. The next stage is to scale the activities interdependently and work out the impacts that they have on each other. That core concept sparked the idea that underpins the Four P’s Matrix.
It then occurred to me that if people could understand where they PRODUCE their profit, and make their money in a business to business sense, and scale that as a percentage of their overall available time during the working week, we would have the basis of a very useful business tool.
PRODUCE is the first of four words that supports the four corners of the Matrix. The others are PRACtice, Play and possible and the use of capital letters is deliberate since they tell a story and denote levels of importance and significance to the business as well as the business owner.
PRODUCE (or production) represents core business … the main activities, energy and commitments that cover business costs and generate profits. The first task for all my clients working through the Four P’s Matrix model is to decide what activities are essential elements of profit generation, and then allocate a percentage of weekly time to those activities. For example, many business owners and stakeholders would agree that at least 70% of their time should be spent on efforts that are closely allied to core business and the generation of profits.
Therefore, if a business owners working week is 50 hours, he should agree with himself and his coach to absolutely commit 35 hours a week on PRODUCE.
PRACtice represents non-core activities that could generate wealth over time. For example, time and effort spent on massaging a share portfolio or learning how to day trade FOREX. A typical client might allocate 15% of their time (say 7.5 hours a week) to PRACtice pursuits.
Play – our hypothetical client might spend 10% of his time each week on playing with ideas such as property development or setting up an independent adjunct to the business which might or might not work after the appropriate research.
We all like the daydream at times and think about what might be possible. With just 5% of time allocated (and 2.5 hours) day dreaming is kept well in check. However, when true visionaries dream, great things can happen so never forget the Art of the possible.
In our next Four P’s Matrix article, we will drill down on the nutty gritty in far more detail and illustrate with a case study.