McKinsey 7S model is a tool for analyzing organizational design. The model aims to illustrate how organizational effectiveness can be achieved through alignment of seven key elements. The model divides elements into two categories – hard elements and soft elements. Strategy, structure and systems represent hard elements, whereas shared values, skills, style and staff are soft elements.
Shared values are placed at the core of McKinsey 7S model because they are cornerstone to the development of all other elements
Strategy. Strategy is a plan to generate profit sustainably on the basis of competitive advantage(s). Answers to the following questions uncover company’s strategy:
- How company plans to maximize its profits?
- How company deals with competitive pressures?
- How the business deals with changes in customer demands, tastes and preferences?
Structure. Structure refers to the organization of the business, organizational chart depicting the chain of command. Companies can look for answers to the following questions to identify the pattern of their structure:
- How divisions/teams are divided?
- What is the hierarchy of the company?
- How activities of various divisions are organized?
- What is the level of autonomy in decision making in various departments?
- Are the lines of communication explicit or implicit?
Systems. Activities and procedures employees use daily to complete their job. The following questions can be used in regard to systems within companies:
- What are the main systems that maintain performance?
- How systems are controlled and evaluated?
- What are benchmarks are used to keep systems on track?
Skills. Skills relate to company’s core competencies and capabilities that enable employees to perform efficiently. The following are the main questions related to skills:
- What are the main important required skills for the company to succeed?
- Are there any gaps in required skills?
- What are the skills monitoring and control practices?
Staff. Company’s human resources and talent management practices. The following are important questions in this regard:
- Does the company have adequate numbers of workforce?
- What are important positions that remain unfilled?
- Are there gaps in required competencies?
Style. Leadership style exercised at the company. Answers to the following questions can shed a light into the leadership style:
- Does the company have effective leadership?
- Do managers micromanage or macromanage?
- Do employees at all level feel appreciated for their work?
Shared values. Values, objectives and mission of the company. Answers to the following questions shed a light into shared values:
- What is the official mission statement of the company, if any?
- How employees are aligned with the official mission statement?
- What are key characteristics of company’s culture?
- What are the fundamental values for the company?
According to the model it is important for elements to stay balanced and to reinforce each other so that company can achieve sustainable development. The model offers practical benefits in times of organizational changes, such as restructuring, mergers, implementation of new systems etc. Specifically, management can analyze each individual element within the model to assess its suitability to support proposed changes.
In this portal you can find application of McKinsey 7S model on major international companies.