Idea in short

McKinsey consultants Tom Peters, Robert Waterman and Julien Philips with a help from Richard Pascale and Anthony G. Athos developed the 7S model in the 1980s. Featured in the book In Search of Excellence, by former McKinsey consultants Thomas J. Peters and Robert H. Waterman, the framework maps a constellation of interrelated factors that influence an organization’s ability to change. Consultants use the 7S model to assist with organizational change, mergers and acquisitions, implementation of a new strategy and understanding the weaknesses (blind spots) of an organization. The McKinsey 7S Framework represented by the following diagram:

McKinsey 7S

Note that all areas in the diagram are interconnected. This means that a change to one area will have implications for all other areas. There is no hierarchy and all areas are the same size. In other words, the 7S model considers all areas equally important.

The areas are divided into hard and soft areas. Hard areas are easy for management to influence and change. The organization’s culture influence the soft areas. Positioning Shared Values in the center of the 7Ss indicates that the organization’s values are central to all elements.

Strategy

Strategy denotes the plan a firm develops to achieve sustained competitive advantage and successfully compete in the market. In the 7S McKinsey model and in general, a sound strategy is one that is:

  • Clearly articulated
  • Long-term
  • Helps achieve competitive advantage, and
  • Reinforced by a strong mission, vision, and values

But, it’s hard to tell if such strategy is well-aligned with other elements when analyzed alone. So, the key in 7S model is not to look at your company to find the great strategy, structure, systems and etc., but to look if its aligned with other elements. For example, short-term strategy is usually a poor choice for a company but if its aligned with other 6 elements, then it may provide strong results.

Structure

Structure represents how the business organizes its divisions and units. This item includes the reporting lines and organizational hierarchy. In other words, structure is the organizational chart of the firm. It is also one of the most visible and easy to change elements of the framework.

Systems

These are the processes and procedures of the company. Systems reveal business’ daily activities and decision-making. Systems determine how the company does its business. Managers should primarily focus on systems during organizational change.

Skills

These are the abilities that firm’s employees perform very well. They also include capabilities and competences. During organizational change, the question often arises of what skills the company will really need to reinforce its new strategy or new structure.

Staff

This element addresses the type and number of employees an organization will need, how it recruits, trains, motivates and rewards its employees.

Style

This represents how the top-level managers run the company, how they interact, what actions they undertake and their symbolic value. In other words, it is the management style of company’s leaders.

Shared Values

These are at the core of McKinsey 7S model. They are the norms and standards that guide employee behavior and company actions and thus, are the foundation of every organization.

Strengths

The McKinsey 7S Framework:

  • Shows the wider impacts of any change
  • Helps an organization work out what it needs to do to get where it wants to be
  • Helps align departments, processes, and softer issues

Weaknesses

The McKinsey 7S Framework:

  • Can be complicated to use and requires lots of research and benchmarking
  • Needs the support of very senior management
  • Is an internally focused tool. It doesn’t look at all at the external environment

Summary