McKinsey 7-S

Model
History…
 It was first mentioned in "The Art Of Japanese
Management" by Richard Pascale & Anthony
Athos in 1981.

 At around the same time, Tom Peters & Robert

Waterman were exploring what made a company
excellent. The 7 S model was born at a meeting of
these four authors in 1978.

 It was taken up as a basic tool by the global

management consultancy company McKinsey.
What is the 7-S Framework?
 It is a management model that describes 7 factors
to organize a company in an holistic and effective
way.

 Together these factors determine the way in which

a corporation operates. Managers should take into
account all seven of these factors, to be sure of
successful implementation of a strategy. Large or
small.

 They're all interdependent, so if you fail to pay

proper attention to one of them, this may effect all
others as well. On top of that, the relative
importance of each factor may vary over time.
• The key point of the
model is that all the
seven areas are
interconnected and a
change in one area
requires change in the
rest of them for it to
function effectively.
The Seven Elements of the
McKinsey 7-S Framework

The model categorizes

the seven elements as
either "hard" or "soft":
"Hard" elements are easier to define or identify and
management can directly influence them: These are
strategy statements; organization charts and reporting
lines; and formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult

to describe, and are less tangible and more influenced by
culture. However, these soft elements are as important as
the hard elements if the organization is going to be
successful.
 Let's look at each of the
elements individually:
Hard Elements:
• Strategy: this is your organization's plan for building
and maintaining a competitive advantage over its
competitors.
• Structure: this how your company is organized (that is,
how departments and teams are structured, including
who reports to whom).
• Systems: the daily activities and procedures that staff
use to get the job done.
 Soft Elements:
• Shared values: these are the core values of the
organization, as shown in its corporate culture and
general work ethic. They were called "superordinate
goals" when the model was first developed.
• Style: the style of leadership adopted.
• Staff: the employees and their general capabilities.
• Skills: the actual skills and competencies of the
organization's employees.
How to use the model?
 To understand how the organizational elements are
interrelated, & to ensure that the wider impact of
changes made in one area is taken into consideration.

 To help identify what needs to be realigned to improve

performance, or to maintain alignment (and
performance) during other types of change.

 To identify gaps & inconsistencies between the current

position & the future position of the company.
 Checklist Questions for the
McKinsey 7-S Framework
Strategy:
• What is our strategy?
• How do we intend to achieve our objectives?
• How do we deal with competitive pressure?
• How are changes in customer demands dealt with?
• How is strategy adjusted for environmental issues?
 Structure:
• How is the company/team divided?
• What is the hierarchy?
• How do the various departments coordinate activities?
• How do the team members organize and align themselves?
• Is decision making and controlling centralized or
decentralized? Is this as it should be, given what we're
doing?
• Where are the lines of communication? Explicit and
implicit?
 Systems:
• What are the main systems that run the organization?
Consider financial and HR systems as well as
communications and document storage.
• Where are the controls and how are they monitored and
evaluated?
• What internal rules and processes does the team use to
keep on track?
 Shared Values :
• What are the core values?
• What is the corporate/team culture?
• How strong are the values?
• What are the fundamental values that the company/team
was built on?
 Style:
• How participative is the management/leadership style?
• How effective is that leadership?
• Do employees/team members tend to be competitive or
cooperative?
• Are there real teams functioning within the organization or
are they just nominal groups?
 Staff:
• What positions or specializations are represented within
the team?
• What positions need to be filled?
• Are there gaps in required competencies?
Skills:
• What are the strongest skills represented within the
company/team?
• Are there any skills gaps?
• What is the company/team known for doing well?
• Do the current employees/team members have the ability
to do the job?
• How are skills monitored and assessed?
 When to Use the McKinsey
7-S Model
• You can use the 7-S model in a wide variety of situations
where it's useful to examine how the various parts of your
organization work together.
• For example, it can help you to improve the performance
of your organization, or to determine the best way to
implement a proposed strategy.
• The framework can be used to examine the likely effects
of future changes in the organization, or to align
departments and processes during a merger or
acquisition. You can also apply the McKinsey 7-S model
to elements of a team or a project.
Where 7S model can be used?
• To improve the performance of a company,
• To examine the likely effects of future changes within a
company,
• To align departments and processes,
• To determine what is the best way to implement a
proposed strategy.
Example: Apple Inc
• Shared Values - business is aligned
around the values of design and user
experience
• Strategy - focus on a small number of
products and to make them
innovative and excellent – enabling
the business to capture a huge market
share relative to its size, and build a
loyal customer following
• Staff - offers their employees huge benefits
• Skills - highly qualified and creative employees
• Systems - supply chain with built capacity for
launching and supplying huge new market-dominating
products
• Style - people are free to innovate – as long as they met
Jobs’ high standards
 Benefits of the Model
 Improves the performance of a company.
 Examines the likely effects of future changes within a
company.
 Align departments & processes during a merger or
acquisition.
 Determines how best to implement a proposed strategy.
Drawbacks
 The external environment is not mentioned in the
McKinsey 7S Framework, although the other variables do
exist & that only the most crucial variables are depicted
in the model.
 The notion of performance or effectiveness is not made
explicit in the model.
 Key Points . . .
 The McKinsey 7Ss model is one that can be
applied to almost any organizational or team
effectiveness issue.
 Inconsistency between some of the elements
can be identified by this classic model.
Conclusion
The McKinsey 7S model can be applied to
elements of a team or a project as well. The
alignment issues apply, regardless of how you
decide to define the scope of the areas you
study.