Pagunsan, Rabbi D.

11413583
HRNEEDS

1. What is the 7s Model?

McKinsey 7s model can be termed as an internal assessment tool for business
organizations. It determines the organizational effectiveness by examining the
alignment of the seven essential elements (i.e., hard elements – systems, strategy,
structure; and soft elements – share values, staff, style, skills) with the core values of
the entity. Robert Waterman, Richard Pascale and Tom Peters introduced the concept
of 7s framework in the year 1970. They were employed as consultants in McKinsey
Consulting firm at that time. Thus, the tool was named McKinsey 7s model.
 2. What are the 7s?
An organization comprises of different aspects, the functioning of which defines the
organizational strengths or weaknesses. Thus, this framework consists of seven such
crucial factors. Moreover, these can be broadly bifurcated into the following two
categories:
Hard Elements

The elements which can be easily recognized and treated by the management in case
of any issues are known as hard elements. This model states the following three hard
components of an organization:

Strategy - A strategy is a set of actions formulated by the management, keeping in

view the long term organizational objectives. The company must be prepared in
advance to cope up with the market competition. The organizational strategies should
be in synchronization with the company’s vision, goals, values and mission. The
McKinsey 7s model provides the following checklist for the alignment of organizational
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?

The above figure lists some questions whose answers must be known to the
management.

It, therefore, explains the plan formulated and enlist the ways of attaining the
organizational goals, handling the market competition, coping with changing consumer
demands and dealing with the business environment problems.

Structure - The organization’s roles, responsibilities, authority and hierarchical

arrangement determine its structure.

It defines the level of accountability and answerability of each personnel. It clearly states
that who will report to whom, defining the superior-subordinate relations within the
company.

The checklist for the organizational structure includes:

How is the company or 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?

Thus, clarifying the team division, hierarchical structure, inter-department coordination,

team arrangement or alignment, level of centralization and line of business
communication.

Systems - The methods, procedures and process which forms the base of carrying out
the routine business operations are termed as an organizational system. For instance,
accepting only cash payment is a system in some organizations.

McKinsey model helps the management to set standards for regular decision making.
Thus, it emphasizes on designing and establishing a robust system.

Given below is the checklist for this element:

What are the main system 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?

Here, ascertainment of an organizational system in terms of security, human resource,

finance and communication takes place.

Also, the control and evaluation mechanism of these systems, along with the internal
tracking process is carried out.

Soft Elements

On the contrary, soft elements are complex and dynamic. These factors, usually define
the organizational culture.

This model highlights the four essential soft elements which are explained in detail
below:
Shared Values - This element can be entitled as the foundation of an entity. Shared
values are the standards, principles, believes and norms set by the organization as
guidelines for its people.

It is the core of any business, to better understand this element, go through its given
checklist:

What are the core values?

What is the corporate or team culture?

How strong are the values?

What are the fundamental values that the company or team was built on?

The answers to the above questions highlight an organization’s core values, corporate

culture, the potential of the set values and fundamental or foundation values.

Style - In simple terms, style refers to how leadership and management of an

organization are carried out to attain organizational goals.

The checklist comprises of the following questions:

How participative is the management or leadership style?

How effective is that leadership?

Do employees or team members ten to be competitive or cooperative?

Are there real teams functioning within the organization or are they just nominal groups?

Here, we can find out the level of employee participation in decision making allowed by
the management style.

Also, an organization’s leadership effectiveness, employees’ competencies and team

efforts can be determined.

Staff - Here, we can find out the level of employee participation in decision making
allowed by the management style.

Also, an organization’s leadership effectiveness, employees’ competencies and team

efforts can be determined. The checklist under the McKinsey framework for this element
is:

What positions or specializations are represented within the team?

What positions need to be filled?

Are there gaps in required competencies?

It brings into notice the team specialization, positions available within a team and areas
of incompetence.

Skills - The competencies or abilities of efficiently performing a particular task is termed

as skills.

An organization has to find out the strengths and weaknesses of its personnel by
adequately understanding their skills set. Following checklist enlightens us on this
element:

What are the strongest skills represented within the company or team?

Are there any skills gaps?

What is the company or team known for doing well?

Do the current employees or team members have the ability to do the job?

How are skills monitored and assessed?

This factor analyzes the most active team skills, loopholes in the skills set, team
strength, team abilities and ways to evaluate the personnel skills.

3. How it is used?

A. Firstly, the management needs to find out the problem area, which requires the
application of this model.
B. The next step is to make sure that the organizational design is optimal. Also,
through research and benchmarking, the level of alignment of the seven
elements with this corporate design is ascertained.
C. After analyzing the degree of alignment among the seven elements, the
management has to outline the areas which demand change or needs to be
reorganized; along with the kind of modification required.
D. Next comes the successful implementation of the planned change with the help
of experienced personnel, for acquiring effective outcomes.
E. As we already know that these elements improvise from time to time, thus, they
should be regularly assessed, to maintain the organizational efficiency.
 4. Why is it important?

Using the McKinsey 7-S Model. You can use it to identify which elements you need to
realign to improve performance, or to maintain alignment and performance during other
changes. These changes could include restructuring, new processes, an organizational
merger, new systems, and change of leadership.