What Is the McKinsey 7S Model?
The McKinsey 7S Model is a framework for organizational effectiveness that postulates that there are seven internal factors of an organization that need to be aligned and reinforced in order for it to be successful.
Key Takeaways
- The McKinsey 7S Model is an organizational tool that assesses the well-being and future success of a company.
- It looks to seven internal factors of an organization as a means of determining whether a company has the structural support to be successful.
- The model comprises a mix of hard elements, which are clear-cut and influenced by management, and soft elements, which are influenced bycorporate culture.
What Are the Key Elements in 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 intangible, and influenced bycorporate culture. The hard elements are as follows:
- Strategy
- Structure
- Systems
The soft elements are as follows:
- Shared values
- Skills
- Style
- Staff
The framework is used as a strategic planning tool by organizations to show how seemingly disparate aspects of a company are, in fact, interrelated and reliant upon one another to achieve overall success.
Consultants Thomas Peters and Robert Waterman Jr., authors of the management bestseller "In Search Of Excellence," conceived of the McKinsey 7S Model atconsulting firmMcKinsey & Co. in the late 1970s.
How Are the 7 S's Used in Strategic Planning?
Below, we take a closer look at each element in the 7S Model:
- The strategy is the plan deployed by an organization in order 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 organization’s objective and goals are.
- The structure of the organization is made up of its corporate hierarchy, the chain of command, and divisional makeup that outlines how the operations function and interconnect. In effect, it details the management configuration and responsibilities of workers.
- Systems of the company referto the daily 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 both influence and temper the behavior of the entire staff and management. This may be detailed in company guidelines presented to the staff. Inpractice, shared valuesrelateto the actual accepted behavior within the workplace.
- Skills comprise the talents and capabilities of the organization’s staff and management, which can determine the types of achievements and work the company can accomplish. There may come a time when a company assesses its available skills and decides it must make changes in order to achieve the goals set forth in its strategy.
- Style speaks to the example and approach that management takes in leading the company, as well as how this influences performance, productivity, and corporate culture.
- Staff refers to the personnel of the company, how large the workforce is, where their motivations reside, as well as how they are trained and prepared to accomplish the tasks set before them.
The McKinsey 7-S Model is applicable in a wide variety of situations where it's useful to understand how the various parts of an organization work together. It can be used as a tool to make decisions on 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. Elements of the McKinsey Model 7s can also be used with individual teams or projects.
What is McKinsey, and What Do They Do?
McKinsey & Co. is a global consulting and accounting firm founded by University of Chicago management professor James O. McKinsey in 1926. The firm specializes in management consulting for a wide range of corporations, governments, and other organizations.
What Are the 7S Factors?
The seven factors in McKinsey's model are strategy, structure, systems, shared values, skills, style, and staff.
Why Follow McKinsey's 7S Model?
Among the primary reasons corporate management uses McKinsey's 7S Model is to identify where a company excels and where it needs more work in creating an optimal and efficient workforce. Additionally, it used to evaluate the performance of a company following a merger or other restructuring to identify areas in the business that need greater improvement and alignment. In many ways, it allows organizations to target problems and set a course of action to implement change.
The Bottom Line
The McKinsey 7S Model is a framework for optimizing organizational design through analyzing seven core elements: strategy, structure, systems, shared values, skills, style, and staff. As a widely-used strategic planning tool, it allows organizations to function more effectively through aligning each of these elements in order to achieve its goals and objectives.
