Famed investor, Marcus Lemonis always repeats the same mantra about the 3 P’s when he goes into a business. He explains that without the right product, the right people, and the right process in place that no business large or small can be successful. He then uses that as his measure stick to determine whether or not he’ll invest in a company. If a business doesn’t have at least one of the 3 P’s nailed down, he won’t give it a second thought because as he explains, he can fix issues with products, people, or processes, but not all three. And with a title like “The Turnaround King” and an estimated net worth of $150 million, he knows what he’s talking about when it comes to businesses!
So what does it look like to have a good handle on product, people, and process? Like this:
So what does it look like to have a good handle on product, people, and process? Like this:
Product Improvements
The right product is the single most important thing for a business to have figured out. Many businesses have issues with personnel issues, parts procurement, manufacturing, shipping, and so on. But as long as the product that they’re putting out is good, consumers will continue to buy it. (Whether or not a business will be profitable selling it is a whole other issue, but at least you can say that there’s a demand to justify working on these other areas of the business.) It really doesn’t matter if you have great people and a great facility set up to make your product if the product itself is crap. Consumers aren’t going to pay for your good planning if it doesn’t create something that they want.
But simply having a good product isn’t enough. You need to have a great product! Marcus reminds us of this when he goes into a company producing key lime pies. The pies are selling well but they use a frozen premade crust, bags of key lime concentrate, and other ingredients that sacrifice quality for convenience. This business’s problem is not that their pies aren’t selling. In fact, they actually have an award for the best key lime pie in America, but Marcus sees plenty of room for improvement. He challenges them to make everything themselves using fresh ingredients and promises that they can be even more profitable doing so. And of course, he’s right! The suggestions he makes help them bring their pies from good to great, and their profitability increases substantially. This is a reminder that continuous product improvements need to be made to be as successful as possible.
Hiring and Retaining the Right People
Because Marcus helps so many family-run businesses, the “people element” is often a big contributor to success or failure. Sometimes good businesses are being torn apart by fighting amongst family members and Marcus has to step in and broker peace. Other times employees are at odds with owners after because too much is placed on their shoulders without receiving the gratitude and recognition that they deserve. While there can be a plethora of different people-related issues at play, Marcus always has one solution – rewarding the people who work the hardest and giving them “skin in the game” as he calls it.
There’s a very powerful lesson here that businesses of all sizes can learn, which is that employees need to feel like they matter. No other perk or benefit can come close to truly feeling valued. So whatever that means for your business (whether it’s a percent ownership, an attainable bonus structure, a title change and promotion, etc.), it needs to be a top priority!
Streamlining Processes
Having a messy or wasteful process costs a business money in terms of lost productivity and inventory, that’s obvious. What’s less obvious is that it can have other negative effects as well. The wrong process can hinder future growth, strangle innovation, result in poor customer service, increase the potential for accidents, hurt employee morale, and so much more! This is why arcus always observes a typical day at any business that he’s considering investing in to see whether they have their process down and how much additional capital may be needed to improve their processes. Sometimes expensive tools and machines are needed to ramp up production, but other times all companies need is just better organization and flow.
The key takeaway that Marcus demonstrates here is that you don’t need to throw money at a problem to fix it – you just need to be willing to look for a solution and be open to change. In one company that makes sports souvenirs, Marcus reworks the layout of their manufacturing plant so that their inventory for different product lines is separated and everything is properly cataloged. This makes employees’ jobs easier because they can find what they’re looking for quickly and determine when items need to be reordered before they run out.
In another company that makes drum kits, Marcus creates numbered stations that each drum needs to pass through for fabricating and machining before a finished product is achieved and shipped out. Just laying out each job station logically makes it easier for specialized workers to get their jobs done with less interruption.
No matter what Marcus is working on when he jumps in to save a struggling business, he reminds us that all three P’s need to be working together for ultimate success. So if you want to be truly successful, ask yourself, where are there opportunities for your business to improve on product, people, or process?
Kate Pierce is the owner of LionShark Digital Marketing LLC, a West Michigan internet marketing company. Her areas of expertise include Paid Search, Search Engine Optimization, Social Media, Web Consulting for small businesses, Copywriting and Local Online Marketing. She lives in the Grand Rapids area with her husband and enjoys cooking, watching sports and spending time outdoors. Like a true digital marketing expert (i.e. geek), she loves talking about marketing theory and SEM trends… so don’t say you weren’t warned!
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