McKinsey 7S Framework

Synopsis

To know how well your organization is positioned to meet its goals and what elements influence its capability to carry through the change, you need a powerful tool. McKinsey 7S framework has been around for 50 years and proved to serve this purpose well. With our McKinsey 7S Framework presentation, you can identify the weakest links in your venture's processes, improve performance, maintain alignment and manage the change with maximum efficiency.

Questions and answers

How can the McKinsey 7S framework be used to align an organization's strategy with its structure?

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The McKinsey 7S framework can be used to align an organization's strategy with its structure by identifying the weakest links in the organization's processes. It helps in improving performance, maintaining alignment, and managing change with maximum efficiency. The 7S framework focuses on seven aspects: strategy, structure, systems, shared values, skills, style, and staff. By analyzing these aspects, an organization can understand how well it is positioned to meet its goals and what elements influence its capability to implement change.

What are some criticisms of the McKinsey 7S framework?

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While the McKinsey 7S framework is a powerful tool for organizational analysis and change management, it does have its critics. Some argue that the model is too simplistic and fails to account for the complexity and dynamism of modern organizations. Others point out that it does not provide clear guidance on how to implement change or address conflicts between the seven elements. Additionally, the model assumes that all seven elements must be in alignment for an organization to be successful, which may not always be the case.

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Slide highlights

Use this slide to touch upon the seven elements of the framework. They are strategy, structure, systems, shared values, style, staff and skills. Below you will find more information about each of the McKinsey 7S framework elements.

With this slide, you can highlight the benefits of employing the McKinsey 7S model. You can mention that it shows the wider impacts of any change and helps an organization to work out what it needs to do to get where it wants to be.

Use this slide to demonstrate the McKinsey 7S model in action through a case study. Business Case Study add credibility and support your main clause and explain how problems were solved; they "paint" better pictures and evoke emotions.

Overview

"Featured in the book In Search of Excellence, by former McKinsey consultants Thomas J. Peters and Robert H. Waterman, the framework maps a constellation of interrelated factors that influence an organization's ability to change. The lack of hierarchy among these factors suggests that significant progress in one part of the organization will be difficult without working on the others," McKinsey & Co website states.

Questions and answers

What is the relevance of the McKinsey 7S Framework in today's business environment?

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The McKinsey 7S Framework remains relevant in today's business environment as it provides a holistic view of an organization. It maps interrelated factors that influence an organization's ability to change, suggesting that progress in one area will be difficult without working on the others. This comprehensive approach is crucial in today's complex and dynamic business environment.

How does the McKinsey 7S Framework help in strategic decision making?

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The McKinsey 7S Framework aids in strategic decision making by providing a holistic view of an organization. It maps a constellation of interrelated factors that influence an organization's ability to change. This lack of hierarchy among these factors suggests that significant progress in one part of the organization will be difficult without working on the others. Therefore, it helps leaders understand the complex relationship between different parts of the organization and make strategic decisions accordingly.

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Per McKinsey, the seven elements of the framework are:

1. Strategy – this is your organization's plan for building and maintaining a competitive advantage over its competitors.
2. Structure – this how your company is organized (that is, how departments and teams are structured, including who reports to whom).
3. Systems – the daily activities and procedures that staff use to get the job done.
4. Shared values – these are the core values of the organization, as shown in its corporate culture and general work ethic. They were called "superordinate goals" when the model was first developed.
5. Style – the style of leadership adopted.
6. Staff – the employees and their general capabilities.
7. Skills – the actual skills and competencies of the organization's employees.

Application

Workflow improvement service, Tallyfy, lists these steps on the way to implementing the McKinsey 7S model:

• Recognize the loose threads – the first step is all about self-assessment, the Tallyfy team says. See that all the elements are aligned and that there are no loose threads because, with one cut, everything might tumble.
• Set your goals – set clear goals for the organization to meet with deadlines and create purpose in the workforce. "With all the elements connected, use it as a blueprint to design the strategy. Thereby, making sure the plan or goal set up is in alignment with the rest," the experts say.
• Identify what needs changing – as you are working on the strategy, it is likely that you come across some segments of the organization that don't align with the work plan. Now is the time to decide the changes that need to be done, create new parts if necessary and concentrate on maintaining the alignment.
• Put your plan to action – executing the project is tedious and may bring up new questions and require more than what was assigned. It is critical for the executive team to roll with the punches, stay in touch for effective communication and ensure that all the elements are connected.

Example

Mind Tools, a resource for improving management, leadership and personal effectiveness skills, illustrates the McKinsey 7S framework with the following example.

Imagine that Whitehawk Electronics is a startup that has five team members. Because Whitehawk Electronics is a developing business, it relies almost solely on the vision and values of the founder. Let's call her Alix. The start-up sells into one market and uses off-the-shelf IT and accounting systems. As the business grows, however, the staff expands to 30 members, and Whitehawk Electronics starts to explore and conquer different markets. New customer demands require new skills in various departments: from marketing to financial management. Alix decides to apply the McKinsey 7-S framework analysis and learns that her company's developing sales strategy doesn't align with its small-business skill set any more.

Questions and answers

How do the key elements of the McKinsey 7S Framework enhance business strategy?

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The key elements of the McKinsey 7S Framework enhance business strategy by providing a holistic view of the organization. The seven elements - Strategy, Structure, Systems, Shared Values, Skills, Style, and Staff - are interconnected and changes in one area can impact others. This framework helps in identifying areas of misalignment and implementing necessary changes to ensure all elements are working towards the organization's goals. It also aids in managing change effectively, as it considers both hard (Strategy, Structure, Systems) and soft (Shared Values, Skills, Style, Staff) elements of the organization.

What are the main components of the McKinsey 7S Framework?

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The main components of the McKinsey 7S Framework are: Strategy, Structure, Systems, Shared Values, Skills, Style, and Staff. These seven elements are interconnected and changes in one element can have effects on others. This framework is used to analyze organizations and their effectiveness.

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Due to the rapid stream of new employees and changes in tech, some staff doesn't possess the systems skills needed. On top of that, the organization's values and mission are not clear to everyone on the team. After performing the McKinsey 7S model analysis and discovering this, Alix resolves the issues by introducing onboarding and learning programs and brings all Whitehawk's key elements back into alignment.

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