Mckinsey’s 7S Framework

The Mckinsey’s 7S Framework  suggests that there is a multiplicity of factors that influence an organization’s ability to change and its proper mode of change. Because of the interconnections of the variables, it would be difficult to make significant progress in one area without making progress in the others as well. There is no starting point or implied hierarchy in the shape of the diagram, and it is not obvious which of the seven factors would be the driving force in changing a particular organization at a certain point of time. The critical variables would be different across organizations and in the same organizations at different points of time.

History  of Mckinsey’s 7S Framework

The 7S Framework was first mentioned in “The Art Of Japanese Management” by  Richard Pascale  and  Anthony Athos  in 1981. They had been investigating how Japanese industry had been so successful. At around the same time that Tom Peters and Robert Waterman were exploring what made a company excellent. The Seven S model was born at a meeting of these four authors in 1978. It appeared also in “In Search of Excellence” by Peters and Waterman, and was taken up as a basic tool by the global management consultancy company McKinsey. Since then it is known as Mckinsey’s 7S Framework.

Seven Levels of Mckinsey’s 7S Framework

The Mckinsey’s 7S Framework  is a management model that describes seven factors to  organize a company in a holistic and effective way. Together these factors determine the way in which a corporation operates. Managers should take into account all seven of these factors, to be sure of successful implementation of a strategy.

The Mckinsey’s 7S Framework  involves seven interdependent factors which are categorized as either “hard” or “soft” elements:

Hard ElementsSoft Elements
  1. Strategy
  2. Structure
  3. Systems
  1. Shared Values
  2. Skills
  3. Style
  4. Staff

Hard  elements are feasible and easy to define or identify in an organization as they are normally well documented and seen in the form of tangible objects or reports such as strategy statements, corporate plans, organizational charts and other documents, and the management can directly influence them.

Soft  elements, on the other hand, can be more difficult to comprehend, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.

  1. Strategy  — Strategy is the plan of action an organisation prepares in response to, or anticipation of, changes in its external environment. Strategy is thought-out, well-structured and often practically rehearsed and is differentiated from tactics or operational actions. It sought to answer three questions; where the organisation is at this moment in time, where the organisation wants to be in a particular length of time and how to get there. Thus, strategy is designed to transform the firm from the present position to the new position described by objectives, subject to constraints of the capabilities or the potential.
  2. Structure — Business needs to be organised in a specific form of shape that is generally referred to as organizational structure. Organisations are structured in a variety of ways, dependent on their objectives and culture. The structure of the company often dictates the way it operates and performs. Traditionally, the businesses have been structured in a hierarchical way with several divisions and departments, each responsible for a specific task such as human resources management, production or marketing. Many layers of management controlled the operations, with each answerable to the upper layer of management. Although this is still the most widely used organisational structure, the recent trend is increasingly towards a flat structure where the work is done in teams of specialists rather than fixed departments. The idea is to make the organisation more flexible and devolve the power by empowering the employees and eliminate the middle management layers
  3. Systems — This refers to some systems or internal processes to support and implement the strategy and run day-to-day affairs. Different systems exist in companies for procurement, recruitment, promotion and so on. The traditional approach is bureaucratic which are intended to achieve maximum effectiveness but however creating bottle neck. The emerging trends in organisations are to simplify and modernize organizational processes by innovation and use of new technology to quicken decision-making process, especially those involving customers with the intention to make the processes that involve customers more user friendly.
  4. Staff — Organisations are made up of humans and it’s the people who make the real difference to the success of the organisation in the increasingly knowledge-based society. The importance of human resources has thus got the central position in the strategy of the organisation, away from the traditional model of capital and land. In order to ensure quality staff, organisations put considerable efforts into hiring the best staff, providing them with rigorous training and mentoring support, and pushing their staff to limits in achieving professional excellence, and this forms the basis of these organizations strategy and competitive advantage over their competitors. It is also important for the organisation to instill confidence among the employees about their future in the organisation and future career growth as an incentive for hard work  .
  5. Style —  Organizational style refers to distinct culture and management style in organizations. It generally includes the dominant values, beliefs and norms which develop over time and become relatively peculiar to the organisation. It consists of the way company’s top management interact the employees. Traditional approach has been largely military style of management and culture where strict adherence to top-down management, concentrating power at the center, thereby creating bottlenecks which invariably leads to time wastage and inefficiency. Recent efforts have sought to change culture to a more open, innovative and friendly environment with fewer hierarchies and smaller chain of command. Culture remains an important consideration in the implementation of any strategy in the organisation.
  6. Shared Values  — All members of the organisation share some common fundamental ideas or guiding concepts around which the business is built. This may be to make money or to achieve excellence in a particular field. These values and common goals keep the employees working towards a common destination as a coherent team and are important to keep the team spirit alive. The organisations with weak values and common goals often find their employees following their own personal goals that may be different or even in conflict with those of the organisation or their fellow colleagues.
  7. Skills — Skills refers to various distinctive capabilities of key personnel and the unit as a whole.  Staff without the right skills to perform any tasks can create several problems for the operations and may results into big disasters. Technology is improving our working environment and new skills needed to be developed into existing staff to fulfill their gaps. Skill development through training’s can help the staff to have the right skills to perform their tasks.

McKinsey's 7S Framework

Placing Shared Values in the middle of the Mckinsey’s 7S Framework emphasizes that these values are central to the development of all the other critical elements. The company’s structure, strategy, systems, style, staff and skills all stem from why the organization was originally created, and what it stands for. The original vision of the company was formed from the values of the creators. As the values change, so do all the other elements.

The Mckinsey’s 7S Framework can be used in two ways;

    1. Considering the links between each of the S’s one can identify strengths and weaknesses of an organization. No S is strength or a weakness in its own right, it is only its degree of support, or otherwise, for the other S’s which is relevant. Any S’s that harmonizes with all the other S’s can be thought of as strength and weaknesses
    2. The model highlights how a change made in any one of the S’s will have an impact on all the others. Thus if a planned change is to be effective, then changes in one S must be accompanied by complementary changes in the others.

Mckinsey’s 7S Framework  is most often used as a tool to assess and monitor changes in the internal situation of an organisation. 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 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.

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