MCKINSEY’S 7S FRAMEWORK

The McKinsey 7S is a tool that analyze that firm’s organizational design by looking at 7 key
internal elements: strategy, structure, systems, shared values, style, staff and skills, in order to
identify if they are effectively aligned and allow organization to achieve its objectives.
McKinsey 7S model was developed in 1980s by McKinsey consultants Tom Peters, Robert
Waterman and Julien Philips with a help from Richard Pascale and Anthony G Athos. Since the
introduction, the model has been widely used by academics and practitioners and remains one of
the most popular strategic planning tools. It sought to present an emphasis on human resources,
rather than the traditional mass production tangibles of capital, infrastructure, and equipment, as
a key to higher organizational performance. The model is based on the theory that, for an
organization to perform well, the 7 elements need to be aligned and mutually reinforcing. So, the
model can be used to identify what needs to be realigned to improve performance, or to maintain
alignment 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 s taken into consideration.
The model can be applied to many situations and is a valuable tool when organizational design is
at question. The most common uses of the framework:
 To facilitate organizational change
 To implement new strategy
 To identify how each area may change in a future
 To facilitate the merger of organization

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 and acquisition
 Determine how best to implement a proposed strategy

The Seven Interdependent Elements

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- Purpose of the business and the way the organization seeks to enhance its
competitive advantage.
 Structure- Division of activities; integration and coordination mechanisms.
 Systems- Formal procedures for measurement, reward and resource allocation
Soft Elements
 Shared values
 Skills- The organization’s core competencies and distinctive capabilities
 Staff- Organization’s human resources, demographic, educational and attitudinal
characteristics
 Style- Typical behavior patterns of key groups, such as managers, and other professionals

Limitations
This framework, though highly laudable, gives rise to a few vital points, like:
(A)What type of analysis is this? Or what is the action triggered after putting your organization
into this drill?
(B)Does this give you real guidelines as to how to proceed further, after the analysis is
completed?
(C)Do we treat this as a guideline or checklist and proceed with using other techniques to
formulate further steps?
(D)There have been other techniques in vogue which have to be used to arrive at actionable
points. Here too, a similar approach may be needed, as a tool, to really put this into action.
(E)The above seems to be an abstract list of generic elements in any organization. But to
improve each business process, such as marketing, finance, manufacturing etc. what steps to be
initiated is not spelt out.

Overview – Hard S’s

McKinsey developed a new framework for analyzing and improving organizational
effectiveness, the 7S model.
The 3 S across the top of the model are described as hard S:
 Strategy: the direction and scope of the company over the long term.
 Structure: the basic organization of the company, its departments.
Reporting lines, areas of expertise, and responsibility (and how they interrelate.)
 Systems: formal and informal procedures that govern everyday activity,
Covering everything from management information systems, through to the systems at the point
of contract with the customer

Overview –Soft S’s

The 4 S across the bottom of the model are less tangible, more
Cultural in nature, and were termed as soft S by McKinsey:
 Skills: the capabilities and competencies that exist within the company.
What it does best.
 Shared values: the values and belief of the company, ultimately they guide employees
towards valued behavior.
 Staff: the company’s people resources and how they are developed, trained, and
motivated.
 Style: the leadership approach of top management and the company’s overall operating
approach.