What is the McKinsey 7S?
The McKinsey 7S model is a framework for organizational effectiveness that posits that there are seven factors internal to an organization that must be aligned and reinforced for it to be successful.
- The McKinsey 7S Model is an organizational tool that assesses the well-being of seven internal factors within an organization as a means of determining whether a business has the structural support to be successful.
- The Model comprises a mixture of hard elements, clearly defined and influenced by management, and soft elements, more diffuse and influenced by corporate culture.
Understanding the McKinsey 7S Model
The 7S model specifies seven factors that are classified as “hard” and “soft” elements. Hard elements are easily identified and influenced by management, while soft elements are more diffuse, more intangible and influenced by corporate culture. The hard elements are as follows:
The soft elements are the following:
- Shared values
Organizations use the framework as a strategic planning tool to show how the seemingly disparate aspects of a business are, in fact, interrelated and dependent on each other for overall success.
Consultants Thomas Peters and Robert Waterman Jr., authors of the management bestseller “In Pursuit of Excellence,” conceived the McKinsey 7S at consulting firm McKinsey & Co. in the late 1970s.
Strategy is the plan implemented by an organization to remain competitive in its industry and market. An ideal approach is to establish a long-term strategy that aligns with the other elements of the model and clearly communicates what the objectives and goals of the organization are.
The organization’s structure is made up of its corporate hierarchy, chain of command, and divisional composition that describes how operations function and interconnect. In effect, it details the management setup and worker responsibilities.
Business systems refer to the day-to-day procedures, workflow, and decisions that make up the standard operations within the organization.
Shared values are the commonly accepted standards and norms within the company that influence and moderate the behavior of all staff and management. This can be detailed in company guidelines presented to staff. In practice, shared values relate to actual accepted behavior in the workplace.
Skills comprise the talents and capabilities of the organization’s staff and leadership, which can determine the types of accomplishments and the work that the company can perform. There may come a time when a company evaluates its available skills and decides that it must make changes to achieve the goals set out in its strategy.
The style speaks to the example and approach that management takes to lead the company, as well as how this influences performance, productivity and corporate culture.
Personnel refers to the company’s personnel, how large the workforce is, where their motivations lie, as well as how they are trained and prepared to fulfill the tasks that are set before them.
The McKinsey 7-S model is applicable in a wide variety of situations where it is helpful to understand how the various parts of an organization work together. It can be used as a tool to make decisions about future corporate strategy.
The framework can also be used to examine the likely effects of future changes in the organization or to align departments and processes during a merger or acquisition. McKinsey Model 7 elements can also be used with teams or individual projects.