This article describes the concept of the 5 P’s of Strategy by Henry Mintzberg in a practical way. After reading you will understand the definition and basics of this powerful strategy tool.
Skill Booster: 5 P’s of Strategy video
What are the 5 P’s of Strategy?
In 1987, the Canadian management scientist Henry Mintzberg distinguished five visions for strategy for organisations. He calls them the 5 P’s of Strategy. They stand for Plan, Pattern, Position, Perspective and Ploy.
These five components allow an organisation to implement a more effective strategy. A strategy is aimed at the future, concerns the long term and involves different facets of an organisation. Competition is always a factor, but it would be a mistake to develop strategies only aimed at competitors. The strategies should also take into account the organisational culture and the other possibilities and developments within an organisation.
According to Mintzberg, developing a good strategy is difficult. With the help of the 5 P’s of Strategy, you can at least include as many different aspects as possible and approach the strategy from different perspectives.
The 5 P’s of Strategy explained (video)
A strategy is a plan for dealing with situations. A plan has to be made before possible actions are taken and it’s also important that the plan is followed consciously and effectively. Goals can only be achieved with a good plan. They enable managers to give their teams clarity and work towards interim evaluations and final results. However, a clear organisational strategy requires more than just a plan.
Where making a plan is about the intended strategy, patterns are about strategies that have been implemented before. On the one hand, there are strategies that achieved their intended result. On the other hand, there are strategies that still have to be worked out in more detail. For those, earlier patterns are an important part of developing the new strategy. It’s about a regular pattern in the decision-making flow. If certain choices have already been made in the past, an organisation is likely to make those decisions again in the future. In such cases, past behaviour is a pattern that’s included in strategy development. It’s about intentionally or unintentionally consistent behaviour displayed by employees and teams. Patterns are accepted without prejudice by everyone. By becoming aware of such patterns within the organisation, you are able to include their strengths in developing a strategy.
This is about the organisation’s position in the market, the interaction between the internal and external context. It’s important to consider carefully in advance how the organisation wants to position itself. What will its identity look like and does that match the idea stakeholders have of the organisation? This can contribute significantly to developing a lasting competitive advantage. Considering the strategic position helps against competitors and to give the organisation a firm place in the market.
Strategy is about more than the chosen position; it’s also about the larger perspective. It’s important to find out how different target audiences perceive the organisation. How do the employees regard their employer? What do customers think of the organisation? What is their image among investors? All these individual perspectives and thought patterns are a valuable source of information for the organisation, which they can use to make targeted strategic choices.
It’s also a strategic choice to use a ploy. For instance one that competitors don’t expect. Organisations can surprise their environment by implementing a plan that nobody saw coming. For instance, a phone service provider can mislead others by suddenly also offering internet service and digital television. That puts them in competition with other potential providers of those services. It’s a ploy to outsmart the competition.
The 5 P’s of Strategy is a planning process
Of course, the Mintzberg 5 P’s of Strategy are part of an organisation’s strategy, but it’s also wise to look at the 5 P’s as separate standpoints that all need to be considered for developing a strong and successful strategy. It’s useful to employ the 5 Ps throughout the planning process. They provide relevant information necessary in the initial stages of strategy development. When implementing the strategy, the 5 P’s of Strategy can help with testing, evaluation and possibly with making adjustments. Finally, the 5 P’s of Strategy can be used as a final check of the developed strategy at the end of the planning process, in order to discover if there are inconsistencies or if anything is missing. Identifying problems during the planning phase can save an organisation a lot of money in the end.
It’s Your Turn
What do you think? What is your experience with the 5 P’s of Strategy by Henry Mintzberg? Do you recognize the practical explanation or do you have more additions? What are your success factors for making strategic choices?
Share your experience and knowledge in the comments box below.
- Mintzberg, H. (1978). Patterns in strategy formation. Management science, 24(9), 934-948.
- Mintzberg, H. (1987). The strategy concept I: Five Ps for strategy. California management review, 30(1), 11-24.
- Mintzberg, H. (2000). The rise and fall of strategic planning. Pearson Education.
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