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McKinsey 7’s Model

McKinsey 7’s Model

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Published by: dipikarathod on Mar 11, 2012
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McKinsey 7’s Model

Ensuring that all parts of your organization work in harmony

How do you go about analyzing how well your organization is positioned to achieve its intended objective?

. the basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful.The McKinsey 7S framework. • Developed in the early 1980s by Tom Peters and Robert Waterman. two consultants working at the McKinsey & Company consulting firm.

for example to help you: • Improve the performance of a company. • Examine the likely effects of future changes within a company. • Determine how best to implement a proposed strategy. .• The 7S model can be used in a wide variety of situations where an alignment perspective is useful. • Align departments and processes during a merger or acquisition.

can be more difficult to describe. these soft elements are as important as the hard elements if the organization is going to be successful. • Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements. organization charts and reporting lines. and are less tangible and more influenced by culture. and formal processes and IT systems. . • "Soft" elements. However.The Seven Elements • The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements. on the other hand.

Hard Elements • Strategy • Structure • Systems • • • • Soft Elements Shared Values Skills Style Staff .


• Systems: the daily activities and procedures that staff members engage in to get the job done.• Strategy: the plan devised to maintain and build competitive advantage over the competition. • Structure: the way the organization is structured and who reports to whom. • Style: the style of leadership adopted. • Skills: the actual skills and competencies of the employees working for the company. • Shared Values: called "super ordinate goals" when the model was first developed. these are the core values of the company that are evidenced in the corporate culture and the general work ethic. • Staff: the employees and their general capabilities. .

strategy. • The original vision of the company was formed from the values of the creators. staff and skills all stem from why the organization was originally created. style. As the values change. and what it stands for. systems. so do all the other elements .• Placing Shared Values in the middle of the model emphasizes that these values are central to the development of all the other critical elements. • The company's structure.

Description of 7 Ss .

strategy is designed to transform the firm from the present position to the new position described by objectives. or anticipation of. . It deals with essentially three questions : • Where the organisation is at this moment in time. Strategy is differentiated by tactics or operational actions by its nature of being premeditated.Strategy • Strategy is the plan of action an organisation prepares in response to. • Thus. • Where the organisation wants to be in a particular length of time and • How to get there. well thought through and often practically rehearsed. changes in its external environment. subject to constraints of the capabilities or the potential.

the recent trend is increasingly towards a flat structure where the work is done in teams of specialists rather than fixed departments. each responsible for a specific task such as human resources management. the businesses have been structured in a hierarchical way with several divisions and departments. .Structure • Business needs to be organised in a specific form of shape that is generally referred to as organisational structure.Traditionally. with each answerable to the upper layer of management. • Although this is still the most widely used organisational structure. • The structure of the company often dictates the way it operates and performs . Organisations are structured in a variety of ways. • Many layers of management controlled the operations. dependent on their objectives and culture. • The idea is to make the organisation more flexible and devolve the power by empowering the employees and eliminate the middle management layers. production or marketing.

Traditionally the organisations have been following a bureaucratic-style process model where most decisions are taken at the higher management level and there are various and sometimes unnecessary requirements for a specific decision (e. . Increasingly. For example. the organisations are simplifying and modernising their process by innovation and use of new technology to make the decision-making process quicker.Systems • Every organisation has some systems or internal processes to support and implement the strategy and run day-to-day affairs. a company may follow a particular process for recruitment. • These processes are normally strictly followed and are designed to achieve maximum effectiveness. • Special emphasis is on the customers with the intention to make the processes that involve customers as user friendly as possible. procurement of daily use goods) to be taken.g.

Style/Culture • All organisations have their own distinct culture and management style. • However. . It includes the dominant values. • It also entails the way managers interact with the employees and the way they spend their time. there have been extensive efforts in the past couple of decades to change to culture to a more open. • Culture remains an important consideration in the implementation of any strategy in the organisation. • The businesses have traditionally been influenced by the military style of management and culture where strict adherence to the upper management and procedures was expected from the lower-rank employees. innovative and friendly environment with fewer hierarchies and smaller chain of command. beliefs and norms which develop over time and become relatively enduring features of the organisational life.

and pushing their staff to limits in achieving professional excellence. • All leading organisations such as IBM. providing them with rigorous training and mentoring support. • The importance of human resources has thus got the central position in the strategy of the organisation. etc put extraordinary emphasis on hiring the best staff. and this forms the basis of these organisations' strategy and competitive advantage over their competitors. . • It is also important for the organisation to instil confidence among the employees about their future in the organisation and future career growth as an incentive for hard work.Staff • Organisations are made up of humans and it's the people who make the real difference to the success of the organisation in the increasingly knowledge-based society. Microsoft. away from the traditional model of capital and land.

Shared Values/Superordinate Goals • All members of the organisation share some common fundamental ideas or guiding concepts around which the business is built. • The organisations with weak values and common goals often find their employees following their own personal goals that may be different or even in conflict with those of the organisation or their fellow colleagues. This may be to make money or to achieve excellence in a particular field. • These values and common goals keep the employees working towards a common destination as a coherent team and are important to keep the team spirit alive. .

and so ensure that the wider impact of changes made in one area is taken into consideration. new processes. So. or to maintain alignment (and performance) during other types of change. a proposed future situation (Point B) and to identify gaps and inconsistencies between them. .How to Use the Model • The model is based on the theory that. • You can use the 7S model to help analyze the current situation (Point A). and so on – the model can be used to understand how the organizational elements are interrelated. • Whatever the type of change – restructuring. these seven elements need to be aligned and mutually reinforcing. organizational merger. It's then a question of adjusting and tuning the elements of the 7S model to ensure that your organization works effectively and well once you reach the desired endpoint. for an organization to perform well. change of leadership. the model can be used to help identify what needs to be realigned to improve performance. new systems.

7S Checklist Questions • • • • • 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? .

given what we're doing? • Where are the lines of communication? Explicit and implicit? .• • • • • 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.

• 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? .• Systems: • What are the main systems that run the organization? Consider financial and HR systems as well as communications and document storage.

• • • • • • • • • • • • • • • 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? .

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