McKinsey 7S Framework

The McKinsey 7S Framework is a

management ? model developed by business
consultants Robert H. Waterman, Jr. ? and Tom
Peters ? (who also developed the MBWA--
"Management By Walking Around ? " motif, and
authored In Search of Excellence ? ) in the
1980s. This was a strategic vision ? for groups,
to include businesses ? , business units ? , and
teams. The 7 S's are structure, strategy,
systems, skills, style, staff and shared values.

The model is most often used as an

organizational analysis ? tool to assess and
monitor changes in the internal situation of an
organization.

The model is based on the theory that, for an

organization to perform well, these seven
elements need to be aligned and mutually
reinforcing. So, the model can be used to help
identify what needs to be realigned to improve Visual representation of the model[1]
performance, or to maintain alignment (and
performance) during other types of change.

Whatever the type of change – restructuring, new processes, organizational merger, new systems,
change of leadership, and so on – the model can be used to understand how the organizational
elements are interrelated, and so ensure that the wider impact of changes made in one area is taken
into consideration.

Contents
History
In Search of Excellence
The Art of Japanese Management
Objective
References
External links

History
In 1977, McKinsey ? director ? Ron Daniel ? launched two projects. The first and major one, the
Business Strategy project, was allocated to top consultants at McKinsey's New York City ?
headquarters ? and was given significant resources. It was headed by Frederick Gluck ? , and despite
promise, the project could not manage to effectively implement the new strategies. The second project
was related to the problem of implementation: organizational effectiveness. This project was headed
by Cleveland-based James Bennet.[2]

Peters states that directly after graduating with a PhD from Stanford and returning to McKinsey,
Daniel handed him a "fascinating assignment."[3] Motivated by the new ideas coming from Bruce
Henderson's Boston Consulting Group ? , Peters "was asked [by Daniel] to look at 'organization
effectiveness' and 'implementation issues' in an inconsequential offshoot project nested in McKinsey's
rather offbeat San Francisco office."[3] While Daniel's first project was focused on Business Strategy,
this second project was concerned with "Organization" which Peters defined as involving "the
structure-and-people side.".[4] The "Organization" project was seen by Peters to be less important,
according to Peters in a Fast Company ? interview.

Despite being described as "marginal," the project "had an infinite travel budget that allowed [Peters]
to fly first-class and stay at top-notch hotels, and a license from McKinsey to talk to as many cool
people as [he] could all around the United States and the world."[4] Peters admits that "There was no
carefully designed work plan. There was no theory that I was out to prove. I went out and talked to
genuinely smart, remarkably interesting, first-rate people."[4] In addition to Karl Weick ? and Einar
Thorsrud ? , Peters notes that Douglas McGregor ? 's theory of motivation, known as Theory X and
Theory Y ? , was directly influential on the direction of the project.

In a 1978 article, "Symbols, Patterns and Settings," Peters argued that "shifting organizational
structure" and "inventing new processes" - structure and system, respectively - were only two tools of
organizational change. Peters then outlined eight "mundane" tools that every manager has at their
fingertips. He described this article as a "tentative presentation" and "the first public expression of
these ideas."[3]

In 1979, McKinsey's Munich ? office requested Peters to present his findings to Siemens ? . That
provided the spur for Peters to create a 700-slide two-day presentation. Word of the meeting reached
the US and Peters was invited to present also to PepsiCo ? . However, unlike the hyper-organised
Siemens, the PepsiCo management required a tighter format than 700 slides, so Tom Peters ?
consolidated the presentation into eight themes. Each of these eight would form a chapter of In
Search of Excellence.

In 1980, Waterman joined Peters, and, along with Waterman's friend Tony Athos and Richard Pascale
? - both academics - came together at a two-day retreat in San Francisco to develop what would

become known as the 7S Framework, the same framework that would organize In Search of
Excellence. In June 1980, Peters published an op-ed in the Manager's Journal section of the Wall
Street Journal ? titled "The Planning Fetish."[5] In this article, he "stressed the importance of
execution and dismissed the whole idea of strategy."[6] As strategy was McKinsey's main operation at
the time, this was seen as a "frontal assault" on the company, leading Mike Bulkin, the head of the
New York office, to demand that Daniel fire Peters.

The primary "innovative" theme that undergirded what would become the well-known book In Search
of Excellence book was that "structure is not organization." This also happened to be the title of a
1980 journal article authored by Bob Waterman, Tom Peters, and Julien Phillips in which they argue
that the "picture of the thing is not the thing.... An organizational structure is not an organization."[7]
This article also introduced what would become the McKinsey 7S Framework.

In Search of Excellence

The work of Peters, Waterman, Athos, and Pascale leading up to the widely successful In Search of
Excellence ? , not only elaborated the eight themes that would form each chapter, but also the 7 S's
frame the different ways in which the firms profiled in the book were "excellent."

The Art of Japanese Management

Athos and Pascale, although not named as co-authors of the 1982 publication of In Search of
Excellence, published their own study in a 1981 book titled The Art of Japanese Management. This
book used the 7S Framework to compare the Japanese firm Matsushita ? with the American company
ITT ? .[8] Just as Peters emphasized throughout his writing, the important distinction between
American and Japanese management was not the so-called "hard" technical aspects of organization,
but rather the "soft" cultural aspects.

Objective
(To analyze how well an organization is positioned to achieve its intended objective)

Usage

Improve the performance of a company

Examine the likely effects of future changes within a company
Align departments and processes during a merger or acquisition
Determine how best to implement a proposed strategy

The Seven Interdependent Elements[9]

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

Hard Elements

Strategy - Strategy is defined as the set of actions that a firm plans in response or anticipation of
changes to its external environment. These actions allow a firm to improve its competitive
positioning. Purpose of the business and the way the organization seeks to enhance its
competitive advantage.
Structure - Structure allow the firm to focus on areas that are deemed important for its evolution.
This includes division of activities; integration and coordination mechanisms.
Systems - These include formal and informal procedures for measurement, reward and resource
allocation.

Soft Elements

Shared Values - These values define the firm's key beliefs and aspirations that form the core of its
corporate culture.
 Skills - The organization's core competencies and distinctive capabilities. It is argued that old skills
can often act as hindrance in developing new skills.
Staff - Staff considers people as a pool of resources, which need to be nurtured, developed,
guarded, and allocated. It includes organization's human resources, demographic, educational
and attitudinal characteristics.
Style - Typical behaviour patterns of key groups, such as CEOs, managers, and other
professionals.

References
1. Hayes, John (2014). The Theory and Practice of Change Management. London: Palgrave
Macmillan. p. 137. ISBN ?  978-1-137-27534-9 ? .
2. McDonald, Duff (2014-09-30). The Firm: The Story of McKinsey and Its Secret Influence on
American Business (https://books.google.com/books?id=kAKZBAAAQBAJ). Simon & Schuster ? .
ISBN ?  978-1-4391-9098-2 ? .
3. "A Brief History of the 7-S ("McKinsey 7-S") Model - Tom Peters" (http://tompeters.com/2011/03/a-
brief-history-of-the-7-s-mckinsey-7-s-model/). 8 March 2011.
4. "Tom Peters's True Confessions" (https://www.fastcompany.com/44077/tom-peterss-true-confessi
ons). 30 November 2001.
5. Peters, T. (1980). The Planning Fetish. Manager's Journal," Wall Street Journal.
6. McDonald, Duff (30 September 2014). The Firm: The Story of McKinsey and Its Secret Influence
on American Business (https://books.google.com/books?id=kAKZBAAAQBAJ&q=%22stressed+th
e+importance+of+execution+and+dismissed+the+whole+idea+of+strategy.&pg=PA151). Simon &
Schuster. ISBN ?  9781439190982 ? – via Google Books.
7. Waterman, R. H., Peters, T. J., & Phillips, J. R. (1980). Structure is not organization. Business
Horizons, 23(3), 14-26.
8. "Richard Pascale" (https://www.economist.com/node/12676998). The Economist.
9. Channon, Derek F.; Cooper, Adrián A. (2015), "McKinsey 7S model" (https://onlinelibrary.wiley.co
m/doi/abs/10.1002/9781118785317.weom120005), Wiley Encyclopedia of Management, John
Wiley & Sons ? , pp. 1–1, doi ? :10.1002/9781118785317.weom120005 (https://doi.org/10.1002%2F9
781118785317.weom120005), ISBN ?  978-1-118-78531-7 ? , retrieved 2021-04-21

External links
A Brief History of the 7-S ("McKinsey 7-S") Model (http://tompeters.com/2011/03/a-brief-history-of-
the-7-s-mckinsey-7-s-model/) - Tom Peters' blog post describing the origins of the model.
Structure is Not Organization (http://www.tompeters.com/docs/Structure_Is_Not_Organization.pdf)
-Business Horizons, June 1980.

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