Making Your Organization’s Every Part Work cooperatively with McKinsey’s 7-S Framework

Do you know how well-positioned your company is to meet its objectives? Or what factors affect its capacity to successfully implement change? 

Organizational effectiveness models come and go, but the McKinsey 7-S framework has remained relevant throughout time. 

Former McKinsey & Company consultants Tom Peters and Robert Waterman created the concept in the late 1970s. They identified seven internal components that must cooperate for a company to succeed.

The seven parts will be thoroughly examined in this article, and you’ll discover how using them to make sure they all operate together can help firms manage change or perform better. 

We also offer a template that can be downloaded and a worked example so that you may use the model. 

The McKinsey 7-S Model: When to Use It 

The 7-S model can be applied in a variety of circumstances when it is beneficial to assess how the various components of your company interact. 

For instance, it can assist you in enhancing organizational performance or choosing the most effective method for carrying out a suggested approach. 

The framework can be used to integrate departments and processes after a merger or acquisition, as well as to analyze the effects of any future organizational changes. The McKinsey 7-S model can be used to analyze team or project components. 

The McKinsey’s 7-S Framework’s Seven Components 

The model divides the seven components into “hard” and “soft” categories: 

-The first of the three “hard” components is strategy. 

-Then Structures (such as organization charts and reporting lines) (such as organization charts and reporting lines). 

-And Systems (such as formal processes and IT systems) (such as formal processes and IT systems.) 

These factors are quite simple to recognize, and management has direct control over them. 

On the other hand, the four “soft” characteristics might be more influenced by your company’s culture and can be more difficult to define. But if the organization is to succeed, they are as crucial to the hard factors. 

The elements are dependent on one another, as shown in Figure 1, and any modification to one has an impact on the others. 

McKinsey’s 7-S model is shown in Figure below.

Let’s examine each of the components separately: 

–Strategy: This is how your company intends to gain and keep a competitive edge over its rivals. 

–Structure: How is your business set up? (how departments and teams are structured, including who reports to whom). 

–Systems: The routine tasks and practices that employees utilize to complete their work. 

–Shared Values: these represent the organization’s core principles and overall work culture. When the model was initially created, they were known as “superordinate goals.” 

–Style: the leadership stance taken. 

–Staff: The staff members and their general skills. 

–Talents: The personnel of the organization’s genuine skills and competences. 

Shared Values are positioned in the middle of the model to underline how important they are to the growth of all other crucial components. 

According to the model, the seven components must be balanced and supported one by one for an organization to function well. 

Using the McKinsey’s 7-S Framework

The model can be used to determine which 7-S components need realignment to improve performance or to keep alignment and performance during other adjustments. These adjustments could involve reorganization, new procedures, a merging of organizations, new systems, and a change in the leadership. 

To use the McKinsey 7-S Model in your company, take the following actions: 

1. Start with your shared values. Do they align with your organizational structure, strategy, and operating procedures? What needs to change if not? 

2. Next, consider your strategy, organizational structure, and system. Which one supports the others the best? Determine what needs to be changed. 

3. Next, consider the “soft” components, such as staff, shared values, abilities, and (leadership) style. Are the desired hard elements supported by them? Do they lend each other a hand? What needs to change if not? 

4. You’ll need to employ an iterative (and frequently time-consuming) approach of making adjustments and then re-analyzing how it influences other parts and their alignment as you adjust and align the elements. Better performance will pay off in the long run. 

Additionally, we’ve created a list of appropriate questions to ask, which you may see in the section after this one. You should add your own inquiries to our checklist, based on the unique conditions of your firm as well as your own knowledge and experience. 

Figure below shows a sample McKinsey 7-S matrix. 

McKinsey’s 7-S Framework Checklist Questions 

The 7-S framework can be used as a starting point for your investigation of the following questions. Then, repeat the technique for your proposed situation after using them to examine your current condition (Point A) (Point B). 

What is our plan of action? 

How do we plan to accomplish our goals? 

How do we handle the strain of competition? 

How are alterations in client requests handled? How are strategies changed in light of environmental concerns? 

How is the business or team divided? 

What is its structure? 

How are activities coordinated amongst the various departments? 

How do the members of the squad arrange and position themselves? 

Decentralized or centralized decision-making? Given what we’re doing, is this what should be happening? 

What channels of communication are there? Is it express or implied? 

What are the organization’s primary operating systems? Think about communication and document storage systems, as well as financial and HR systems. 

What controls are there, and how are they monitored and assessed? What internal procedures and laws does the team follow to stay on task? 

Shared Values: What are the guiding principles of your company? 

What kind of business culture does it have? 

How robust are the principles? 

What core principles did the business or team establish itself on? 

What is the management/leadership style’s level of participation? 

How successful is that management? 

Are employees or team members more likely to cooperate or compete? 

Are there actual teams working within the company, or are they only fictitious groups? 

Staff: 

What roles or areas of expertise does the team have represented? Which posts require filling? 

Exist any gaps in the necessary competencies? 

What are the team’s/strongest company’s areas of skill representation? 

Do you see any skill gaps? 

What accomplishments is the business/team renowned for? 

Do the current workers/team members possess the necessary skills? 

How are talents evaluated and monitored? 

An illustration of the McKinsey’s 7-S Framework 

Five people work for the startup Whitehawk Electronics. Although it is still a young company, all of its components are in line with Alix’s vision and principles. It sells to a single market and makes use of open-source IT and accounting programs. 

The company expands over time, hiring 30 people, and diversifying into new markets. New client demands necessitate the development of brand-new marketing, technological, product-creation, and financial management skills. 

A 7-S analysis is conducted by Alix. She discovers that the evolving sales strategy of Whitehawk is no longer compatible with its small business skill set. 

Due to the quick influx of new employees and technological advancements, some employees lack the system expertise required. Even worse, they lack a comprehensive understanding of the organization’s core principles and goals. 

Alix introduces onboarding and learning initiatives using the analysis, bringing all of Whitehawk’s essential components back into harmony. 

Major Points 

Almost any problem relating to organizational or team effectiveness can be solved using the McKinsey’s 7-S framework.

1. Strategy. 

2. Organization. 

3. Systems 

4. Mutual values

5. Style. 

6. Staff. 

7. Expertise 

It’s likely that one or more of these seven components are inconsistent if something in your team or organization isn’t working. 

Once you’ve identified these discrepancies, you can attempt to align these components so that they all support the common objectives and values of your firm. 

Analyzing your current situation in light of these factors is valuable in and of itself. But in order for it to be genuinely effective, you’ll also need to figure out what each aspect should be like in the future. So that all seven factors are aligned throughout your organization, this will assist you in making adjustments and enhancing performance.

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