The McKinsey 7S Framework
What do you consider to be the best way in which to analyse and design organisations and why? When it comes to analysing and designing organisations, the main issue is to decide which factors should be studied in order to get the best feedback possible. This kind of study is extremely important to every company, since its architecture will determine the path that the company will go through to reach their goals.
Many ways to do this kind of analysis exist and are used world widely, but the ones that are able to give the best results are, in my opinion, McKinsey 7s model and Galbraith`s Star model. Both models are useful because they describe very important organisational elements and recognise the interaction between them. Both also require organisations to use a chosen strategy to inform structure decisions.
The two methods show critical limitations, especially regarding input and output elements and the external environment. A company`s organisational design has the role of arranging its process in a way that they are successful and realize the main qualities defined in their visions and values. Hence, I think that the best way to analyse it is using McKinsey 7S model. In this model, the shared values of the company are in the core of the system which they use to design the structure of the relations inside a company. As different models focus on different aspects, the 7S model focus on internal aspects and it was chosen considering that this is the focus of the analysis. The seven elements (S`s) considered are: Strategy, or the plan and directions to build competitive advantage; Structure, who reports to whom; Systems, daily procedures done by the workers; Skills, the abilities of the employees; Staff, the employees themselves; Style, the kind of leadership used within the company; and Shared values, core values of the corporation. I think these are great ones to internally analyse an organisation. The model is based on the premise that an organisation has to align seven internal aspects in order to achieve the desired success. The framework scheme can be seen on the image below:
Figure 1 – McKinsey 7S framework
I really like the how they divide these elements. Strategy, Structure and Systems are “hard” elements, because they are more tangible and easier to be fixed or managed. The others are “soft” elements, because they are more difficult to describe and define and less influenced by culture decision. I totally agree with that, having in mind that these adjectives do not refer to their importance, since both hard and soft elements are equally important to the organisation`s success.
Considered a diagnostic management tool, the 7S model will give the firm the basis to improve its performance, examine the expected effects of upcoming changes within it, determine how best to implement a suggested strategy and align departments and processes during a fusion or acquisition. It is designed to facilitate the process of strategy implementation within the context of a change.
As mentioned before, for me, the strongest point of this method is that the core aspect of its design is “Shared Values”. It shows that these values are critical to the analysis of the other elements. Staffs, Skills, Strategy, Structure and Style, all of them have their basis on what is the main purpose and principles of the company. If these basic values change, all other aspects will change subsequently.
Though this model is strong to analyse a company in the situation of a change (possible or concrete), it is also helpful just to identify which elements and relations are misaligned in order to help the organisation to improve its performance. A bad point about that is that 7S method does not have a performance variable.
As nowadays company`s strategies are almost always built upon shot term target besides the long term ones, I think that a model that analyses the structure based on changes is extremely helpful. Using it, the organisation is able to examine a current situation, an expected future situation and identify issues that stand in the way between them. The model sees how the elements are interrelated and what kind of impacts a change in with one of them can affect the others. Then you can adjust and mould the 7 elements to make sure that the aims will be reached and everything will work properly once it is done. Two main strengths and advantages of the 7S model is that it emphasises on a firm’s strategy implementation and it shows that organizational effectiveness is not dependent on just strategy and structure. The weaknesses that the model carries are that it may miss some very important external areas in which gaps in strategy conception or execution can easily happen and that the 7S is mostly a static model, there are no feedback loops. Additionally, a good point about the model is that it is simple to be implemented. As it is based on the relations and connexions between the elements, a table like the one shown above is what is necessary to structure the analysis.
Figure 2- McKinsey 7S Worksheet
The analysis should be made in a way that you can rate the quality of the relations between different elements and state if they fit perfectly. If it does not, there are two possible ways to find a solution: the firm can work to change the aspects of the “S`s” that are misaligned or it can change the strategy so it fits with the current situation of the company. As you make adjustments and realign the elements, it will start a iterative process. You will keep making them and reanalysing to see if those changes had any impact in other S`s and adjust them if yes. At the end of the process, the improvement on the corporation`s performance is huge. Some additional related tools can be used with the 7S model, like a SWOT analysis, in order to obtain more in-depth results.
This model is connected to the idea that structure will follow strategy, which is an important concept in modern theories and which I agree with. Therefore, I think that if an internal analysis is necessary, the McKinsey 7S model is the best choice, especially to analyse differences that expected
or planned changes can make in the organisation`s elements connexion.
1. Fleisher, Craig S. and Babette E. Bensoussan (2007). Business and Competitive Analysis: Effective Application of New and Classic Methods. Upper Saddle River, NJ: FT Press.
2. J. Galbraith (1995). Designing Organizations . San Francisco: Jossey-Bass Publishers.
3. (2012). The McKinsey 7S Framework. Available:
http://www.mindtools.com/pages/article/newSTR_91.htm. Last accessed 15th Nov 2013.