McKinsey's 7S

McKinsey 7S model

McKinsey 7S model is a useful framework to reviewing capabilities of an organisation from different viewpoints. The 7S model was designed by the consultants (like Robert Waterman, Jr. and Tom Peters) of ‘McKinsey’- an American consulting firm. It covers the key organisation capabilities needed to implement strategy successfully, whether for reviewing a business, marketing or digital strategy. It also works well in different types of business of all sectors and sizes, although it works best in medium and large businesses. The theory helps to change thinking of manager about how companies could be improved.

7S’s are- Strategy, Structure, Systems, Style, Staff, Skills, and Shared value.

They are divided into hard and soft elements.

7S’s  elements: Strategy, Structure, Systems, Style, Staff, Skills, and Shared value	Hard elements: Strategy, Structure and Systems
	Soft elements: Shared values, Skills, Style and Staff

Elements of 7S can be defined as follows:

Strategy: Strategy can be defined as the determination of a course of action to be followed in order to achieve a desired goal, position or vision.

Structure: An organisations structure is the interrelationship of process and human capital in order to fulfill the enterprise’s strategic objectives.

Systems: The organisations information systems and infrastructure.

Staff: Human resources management. The type of employees, remuneration packages and how they are attracted and retained.

Style: Corporate style is a synthesis of the leadership philosophy of executive management, the internal corporate culture generated, and the orientation an organisation adopts to its markets, customers, and competitors.

Skills: The unique or discinctive characteristics associated with an organisations human capital.

Shared Values: The concepts that an organisation utilizes to drive toward a common goal through common objectives and a common value set.

Use of 7S model:

-       Can be used to help analysing the current situation, a proposed future goal and then indentify gaps and inconsistencies between them.

-       Review the effectiveness of an organisation in its marketing operations.

-       Determine how to best realign an organisation to support a new strategic direction.

-       Assess the changes needed to support Transformation of an organisation.

***[N.B]***

Detailed questions to be asked to find out each elements of 7S’s are provided in the following-

Strategy-

-       What is our Strategy?

-       What are the objectives and how do we intend to achieve them?

-       What makes us competitive and how do you deal with competition?

-       What environmental factors affect the business and how do you keep track on the factors?

Systems-

-       What are the main systems that support and drive the business? e.g. Resource planning, financial recording and reporting, information management, HR systems, Communications, etc.

-       What controls are there in the orgaisation and how is status feedback?

Structure-

-       What hierarchical structure does the firm have?

-       What are the reporting mechanisms?

-       How is the organisation divided? e.g. Martix or Bureaucratic?

-       How do the departments and functions co-ordinate activities?

-       Is decision making centralized or decentralized??

Shared Values-

-       What are the corporate values of the organisation?

-       Do these values align with competitive pressure and strategy?

-       What is the ‘internal culture’ like in the work force?

-       Is the culture conductive to progressive improvements?

Style-

-       What is the general Leadership style of the organisation?

-       Is the Leadership participative or largely autocratic?

-       Are there participative teams or just merely groups of people?

-       Are people empowered and encouraged to proactively take risks and challenge the norm?

Skills-

-       In line with the strategy and vision, are there any skills gaps?

-       In line with operations at a team level, are there any skills gaps?

-       How is training and skills monitored and evaluated?

-       What are the strongest skills?

-       What are the core competencies or the organisation or team?

Staff-

-       What positions are vacant or need to be filled?

-       What competency gaps are needed to be filled?

-       What type of people and skills are needed to support the other 7 elements of the firm?

Bibliography:

Plant, R. T. (2000), eCommerce: Formulation of Strategy, NJ: Prentice-Hall, Inc.

Waterman, R.H., Peters, T.J. and Phillips, J.R. (1980) Structure is not organization. McKinsey Quarterly, in-house journal. McKinsey & Co., New York.