The 7s Model by McKinsey is the strategic tool that carefully analyzes the company’s organizational design by looking and analyzing the 7 different internal elements that are strategy, structure, systems, shared values, style, staff, and skills.
The main aim of the model is to identify if they are effectively and efficiently aligned with the core values of the organization and helps it to accomplish its goals and the overall business objectives.
In-depth study of the 7s Framework by McKinsey :
The 7s model was developed by the partners of McKinsey Consultants Tom Peters, Robert Waterman, and Julien Philips along with the help of Richard Pascale and Anthony G. Athos in the decade of 1980’s.
Since the inception of the model, the McKinsey 7s Framework is one of the widely famous strategic planner tools and is used by various academic organizations and renowned practitioners.
It lays the major emphasis on the aspect of human resources (Soft S) working as a key to the higher level of organizational performance rather than focusing on the traditional mass production tangible factors such as equipment, capital, and infrastructure.
The main aim of the 7s model is to highlight and make the management of the organization understand how the 7 key elements can be well aligned.
- Shared values
They can be defined together in order to attain high efficiency and effectiveness in the overall business processes.
All the seven elements are interconnected and change in one element requires the related alteration in the others for the firm to function in an effective manner.
The shape of the model represents the interconnectedness of all the seven elements and divides them into the ‘Soft Ss’ and ‘Hard Ss’.
- It is one of the most valuable tools for the various organizational domains and can be applied in many situations.
- It facilitates the overall change in the organization in an effective and efficient manner.
- It helps to implement new strategies and plans.
- It helps in the growth and development of the organization by the way of mergers and acquisitions.
- It also helps to identify the possibilities of change in the organization in the future.
The 7 elements of the McKinsey 7s Model :
In the model, all the seven elements are divided into the soft and hard areas. The hard areas include strategy, structure, and systems as they are much easier to identify and manage when compared to the soft elements.
Whereas, the soft elements work as the foundation of the organization and are more likely to create the sustained level of competitive advantage in the market even though they are a bit harder to manage.
The strategy can be defined as the plan framed and developed by the company to gain a competitive advantage in the market by beating the competition and successfully thrive on a long-term basis. But what does a well aligned and defined strategy means in the 7s model by McKinsey?
The model defines the factor of strategy as the one that is carefully and clearly articulated with the long-term vision in mind that helps the firm to attain the long-term and sustainable competitive advantage plus it is backed by the strong set of goals, mission, vision, and core values.
The model helps the management to understand if the strategy is aligned with the other factors such as systems and structure for its successful implementation. The short-term strategy is a poor choice but if it is well aligned with the other factors, then it will certainly provide strong and better results as per the model.
The aspect of structure harps on the organizational chart of the firm and is one of the easiest and visible elements of the framework to change and alter. It represents the way the roles and responsibilities are divided amongst the various business divisions and units that shows that who is accountable and answerable to whom in the entire hierarchy.
The factor of the system determines the aspects that how the business is done and the goals are achieved. It has to be the main focus of the management and the key staff members during the process of organizational change. Systems form as the various procedures and processes of the organization and reveal the daily activities of the business that helps in the decision making and other crucial aspects.
The 7s Framework by McKinsey harps on the fact that what skills will be required by the organization that will help it to reinforce the new strategies and structures during the process of organizational change. Skills can be defined as the abilities that the employees of the firm perform their functions in an efficient manner. The skill set also includes the capabilities and competencies required to attain the goals and objectives of the firm.
The element of staff highlights the fact that how many and what type of employees the company needs to be recruited, trained, rewarded, and motivated to attain its aims and objectives. The number of employees that needs to be recruited also needs to be decided by the company.
The element of style represents the management style of the leaders of the company and the way they manage their staff through their actions and interactions during the process of organizational change and attainment of the goals and objectives.
7) Shared Values
The factor of shared values lay at the core of the 7s Framework by the McKinsey model. They work as the foundation of every organization and are a set of norms, standards, and principles that guide the company actions and the behavioural aspects of the employees.
Here is a video by Marketing91 on 7s Framework by the McKinsey model.
Steps to use the 7s Framework by the McKinsey model
1) Figure out the areas that are not aligned effectively
The first and foremost step in using the model is to check and identify if all the seven elements are effectively aligned with each other or not in your organization.
If the answer is no, then you have to figure out the gaps, bottlenecks, and inconsistencies between all the elements of the model. For example, you have designed a wonderful and novel product that is sure to capture the market but the promotional strategy for the same is not in place.
2) Determine the optimal and best fit organizational design
The second step involves in finding out the effective and best fit organizational design that you and top management wants to attain.
This helps in the desired alignment of the elements that helps in the achievement of the goals easier with the effective action plans. This step is not that easy and straightforward as it sounds as it requires collecting the data, answering crucial questions, setting up the strategies and action plan to get the best and optimal alignment and organizational design.
3) Decide the changes to be made
This is one of the main steps and determines your action plan and will help you to figure out the areas and elements that need changes for the proper alignment and how to attain the same.
If the management style is not aligned with the structure of the firm, then you need to take actions to fix the same by reorganizing the reporting structure and make the management aware on how their management style is not that effective to accomplish the overall objectives of the firm.
4) Make the required and necessary changes
The next step involves making the necessary and required changes that have been figured out in the above-mentioned steps. It is an important step to get the positive effects, it is necessary to implement the changes. You can also hire outside consultants that have the required expertise to implement the changes.
5) Review the seven factors
All the seven elements of the 7s Framework of McKinsey structure, strategy, systems, skills, style, staff, and shared values are dynamic in nature and change on a constant basis. It is very imperative to review them on a continuous basis as a change in one element has an effect on the other elements resulting in the implementation of the new organizational design.