The McKinsey 7S Framework
The McKinsey 7S Framework is a conceptually-based tool for analyzing an organization and its internal environment. In this framework, improvement of an organization profitability, effectiveness and the ability to achieve objectives should all occur in a dynamic equilibrium. The McKinsey 7S Model was developed in the early 1980s by Tom Peters and Robert Waterman, two consultants from McKinsey & Co, a renowned consulting firm. The framework is based on the proposition that to be successful, a company must have seven internal constituent elements all in alignment and balanced. These seven elements are often referred to as the “7S” and divide into hard and soft components.
The hard elements of the 7S model are:
1. Strategy: This is the direction and scope of the organization over the long term. It is the guiding principle which determines the way the organization allocates its resources and how it seeks to achieve its objectives.
2. Structure: This is the organizational design used to allocate resources and divide activities and responsibilities such as centralization, decentralization, size of the organization, flexibility, and reporting relationships.
3. Systems: These are the processes and procedures that are used to manage the daily operations of an organization such as planning, staffing, assessment, and communications.
The soft elements of the 7S model are:
1. Shared Values: These are the fundamental values and beliefs shared by all members of the organization about the organization itself and about the customers.
2. Style: This is the way that management makes decisions and the managerial approach taken to achieve results.
3. Staff: This refers to the organization’s personnel and the selection, performance, motivation and development processes used to manage them.
4. Skills: These are the capabilities and expertise of the organization’s personnel as well as the ability to utilize and sustain the available resources.
The 7S model provides a road map of how the elements of the organization must be linked together and balanced to work effectively. It emphasizes the need for a “whole system” approach and suggests that any change in one element of the organization can affect the other elements.
The use of the 7S model provides several advantages for managers. It provides a framework for analyzing the current environment of an organization and identifying areas for improvement. It also provides guidance for the development of an effective organizational design and plan. The model is also a useful tool for communication among all the stakeholders to ensure that everyone is working towards the same goals.
One key strength of the 7S model is that it can be easily linked to other frameworks, models and theories. The 7S model also offers a holistic perspective on an organization. The model aims to create an organizational structure that takes into account the entire system of an organization by considering the various elements, structures, systems, skills, shared values, styles, and staff.
The 7S framework is widely used and has become an essential tool in the process of organizational design and development. It provides a straightforward, yet comprehensive, approach to assess an organization’s internal environment and the necessary elements required for effective organization. It also serves as a starting point for the creation of strategies to achieve desired objectives.
