Introduction

As Mr. John Maxwell said once, ‘Change is inevitable’ it holds forever. And to be successful, we must come out of our comfort zones and embrace the change. 

Such things hold even for businesses to scale and grow. You should be ready to change and adapt to the latest trends to avoid getting outdated. So, adapting to change becomes necessary. 

But the change should make sense to your business as well. You should be aware of your organization’s position to own a change and its implications successfully. 

So, to help organizations measure their capability to handle a change, Robert Waterman and Tom Peters designed a model in the late 1970s. It is known as the McKinsey 7s model. 

The model describes seven organizational elements that decide the worth and success of an organization. These elements should be in alignment to be successful. Let us learn about the 7s model in greater detail.

  1. What is McKinsey 7s model?
  2. The Seven Elements of McKinsey 7s Model
  3. How to make use of the McKinsey 7S Model?
  4. Example of the Model

1. What is McKinsey 7s model?

Mckinsey 7s framework is a strategic planning tool designed to help an organization understand if it’s in accordance in a way that allows it to achieve its objectives. McKinsey model says that seven factors should remain in harmony to embrace a change and last successful in the marketplace. 

As you can see in the diagram, these seven factors are inter-connected with each other. It means a change in a single area has implications for the rest. Also, all the elements are equally important and do not have a hierarchy. 

The elements categorize into hard and soft areas. The hard areas are easy for management to change and influence. While the soft areas, depending on the corporate culture or the culture of the organization. And since Shared Values lie at the center of the diagram, this means an organization’s values are vital to each element in an organization and hence can affect invariably. 

So, the hard elements are the structure, strategy, and systems. While the soft elements are shared values, skills, style, and staff. Let us understand these seven elements of McKinsey 7s model in greater detail.

2. The Seven Elements of McKinsey 7s Model

According to McKinsey seven s model, seven elements define an organization’s effectiveness, and these seven elements should remain in harmony to make the organization successful in the marketplace. We will learn about the hard ones first.

Hard Elements

The hard elements of the 7s framework are easily visible and can be influenced immediately by the organization. These are:

  • Strategy: These are the company’s plans to remain competitive and victorious in the marketplace.
  • Structure: It is the hierarchy of your organization i.e, who is answerable to whom.
  • Systems: These are the regular procedures, processes, and activities undertaken by the employees to get the work done.

Soft Elements

These factors are difficult to examine because the employee capabilities, organization culture and corporate values develop and change continuously. But these elements hold equal importance as the hard elements, for the success of the organization. These are:

  • Shared Values: These are the core values designed and adopted by an organization and its employees. 
  • Style: The behavior and style of working of the managers and other professionals. 
  • Staff: The employees of the organization and their general capabilities.
  •  Skills: The individual skillset and competencies of employees in an organization. 

So the underlying statement about the 7s framework is that these seven elements need to maintain a balance and align properly to earn a name in the market.

3. How to make use of the McKinsey 7S Model?

The McKinsey 7s model is generally used to assist with organizational changes such as acquisitions, mergers, restructuring, leadership changes, implementing new policies, and understanding the weaknesses or blind spots of an organization. Various businesses use the 7s model for the following purposes:

  • To know about how will the organization achieve its goals and targets.
  • To boost performance and productivity.
  • To implement a proposed strategy.
  • To determine the effects of a change in an organization.
  • To implement policies for improving employee skillset and capability.

You can also use the following steps to implement the McKinsey 7s Model in your organization’s favor:

Step 1: Determine the areas that need an alignment.

To do this, you need answers to a few questions in respective areas

Strategy

  1. What is your organization’s goal?
  2. How to use resources to accomplish the goal?
  3. What is your company’s USP?
  4. How does your organization adapt to changes?

Structure

  1. How is the firm organized?
  2. How are decisions taken?
  3. How staff aligns themselves to the company’s objective?
  4. How is information distributed?

 Systems

  1. What financial systems are used for resource recruitment?
  2. What systems are there for recruitment, promotion and appraisal?
  3. What procedures are employed to get work done?

 Shared Values

  1. What are the core values of the organization?
  2. How do the values affect the daily life of an employee?

 Style

  1. Define leadership style of your company.
  2. What is the employee response to management?
  3. Do employees function collaboratively, competitively or cooperatively?

Staff

  1. Is the number of employees enough to reach the aim?
  2. Is there a need to staff?
  3. Is there a gap in the required resources or capabilities?

Skills

  1. What is the employee skill set at present?
  2. Is the skillset sufficient?
  3. What is unique about the organization?
  4. How are the employee competency and skill assessed, monitored and improved?

Once you get an answer to all these questions, analyze them, and find the alignment, conflicts, consistency, strengths, gaps, and weaknesses.

Step 2: Determine which organizational design suits you the best. You can do this by finding out what is working best for your competitors.

Step 3: Find out what needs to change. Once you have analyzed all the data from the previous steps, you exactly know which areas need to be realigned. For example, a particular manager’s behavior doesn’t go according to your company values. You have to decide what needs to be changed here. 

Step 4: Implement the changes.

Step 5: McKinsey 7s model is iterative. Review the elements after the change and keep changing them to grow effectively. 

4. Example of the Model

Let us understand the importance of this model with McKinsey 7s framework with company example. Supposedly there is a startup called Greenwave Electricals. It has 10 employees. The company is based on the vision and values of the owner. At present, the company sells goods in the single market, uses IT and accounting systems, and all its key elements are aligned.

As the business grows, the company now has 50 staff members and sells in diverse markets. Now the newer customer demands require skills in product development, marketing, technology, and financial management. 

So the owner analyses the seven s framework and finds out that 7 elements are no longer aligned. She finds out there is a huge technological gap, some staff does not have the necessary skill set, while some do not know the company values. She then aligns all the key elements to reach further heights.

Conclusion

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