Organizational Design, McKinsey 7s Framework
Do you know how to guide your organization into salvation and achieve your goals? McKinsey 7s Framework, at its core, acts like a tool that focuses on investigating organizational design at seven key aspects: structure, strategy, style, shared values, systems, staff, and skills.
Although many management models lose their touch as time passes by and go out of fashion, the McKinsey 7s model always stood firm. Since its introduction, over and over again, it has proven to everybody the fact that it’s impeccable and irreplaceable.
This model was developed back in the late 1970s by a pair of intellectual consultants working in McKinsey & Company, Tom Peters and Robert Waterman. With a bit of help from some other colleagues like Richard Pascale and Anthony G. Athos, the framework has been widely accepted all across industries and nations alike and set the bar among the best planning tools. Many scholars and academics took to the McKinsey 7s framework to better capture the essence of what drives the companies and to pay more attention to human resources (Soft S), instead of the more classical prospective which centered around mass production, infrastructure, and equipment. For students, and the founders, if a company is to succeed, it needs to adopt the framework and work accordingly to it.
Breaking Down the McKinsey 7s Model
As explained above, to get the best results, the seven elements of the McKinsey 7s model must be aligned to bring growth and revenue to an organization. But, what exactly are these elements? Why should any business owner put its faith into this model, aside from the fact that everyone’s using it?
This model comes into play, especially when a manager wants to determine the level of efficiency in the organizational design. To do so, they can implement the model to reach their desired conclusions. Not only the framework applies to current times and standards, for example, shifting departments and processes to expand in a parallel way, but it’s also useful to examine the possible effects the future of the industry might bring to an organization. The McKinsey 7s framework can, too, be inserted into team or projects as well as a kindle of guidance.
Here are some common uses of the model:
- To facilitate organizational change.
- To help implement a new strategy.
- To identify how each area may change in the future.
- To facilitate the merger of organizations.
The Seven S’s in the McKinsey Model
At first glance, you might not be able to tell the connection between the elements, but don’t get discouraged; the McKinsey 7s framework is easier than you think. This model divides different areas of an organization or company into two groups of “hard” and “soft” elements, according to the McKinsey model. While the soft elements depict the less tangible and more influenced by company culture and worth ethics, the hard elements show us the features of a company that is more recognizable and easier to identify.
|Hard S||Soft S|
- Strategy: This is one of the most accessible elements to track in a company. A strategy is a plan coordinated to reach a sustainable yet competitive advantage over others. This plan helps with building and maintaining a market-presence. In McKinsey model, approach translates into a sound, well-developed, and precisely-calculated program to achieve the organization’s long-term competitive advantages; company strategy gets a more robust and firm standing when enforced by strong management vision, clear missions and goals, and impenetrable work-culture and inside values. Although marking a company strategy doesn’t cause any difficulties, realizing its connection to the other McKinsey factors and if it’s well-aligned with other elements or not, can be puzzling. You ask why? Well, the main point in the model isn’t to only track down the elements in the company; oh no, the key point is to look if they’re aligned and are working together. For example, a short-term strategy usually doesn’t promise much for a business owner and their company, but when set in the right order along with the other six elements, it can turn into a mighty tool with extemporary results, which bails the company out of a sticky situation.
- Structure: It gives us the procedures and processes through which daily activities and decisions are decided in the company. Systems determine how a manager or a leader should run his/her company and plays a massive role in the company’s success. Structure aids us in figuring out the shape of an organization and how teams come into work together and how they are constructed. This area of any firm should be the first concern of any manager, and they should pay close attention to it, particularly when there are going through changes in the organizational design.
- Skills: An element you can’t pinpoint quickly. Skills can mean the actual skill-sets, abilities, capabilities, and competencies employees of organizations have or acquire. Business leaders take careful note of employee talents, especially in the period of organizational reforms; identifying these talents helps them to select the most suitable workers with the necessary skills who empower the organization in the time of change.
- Staff: This includes the total amount of employees, type of skills, capabilities, and what they add to the company. Also, how they are found, recruited, trained, pushed, and rewarded falls under this category as well.
- Style: How the top-level managers decide on organizational design an how to shape the future of their company and guide it, can be explained in the style of leadership. What form they introduce into the work environment determines their methods of interacting with employees and other top-tier colleagues, the actions they take, and the values they hold above all. In the frankest way to put it, it is the management style they choose to adopt.
- Shared Values: This one lies at the core of McKinsey 7-s framework. It incorporates organizational values, the norm, and standards that define worker’s behavior and gives birth to corporate culture and general work ethic. Back in the late ’70s, people called these factors “superordinate goals” when the model was first out, and, today, we know them as the foundations of every organization, company, or firm. You can check out this article as well to learn more about the work culture.
Keep in mind that, if you’re gunning for success, which you should, then absolutely give all these elements the respect and attention they need to achieve the best result.
Also, the emphasis on Shared Values at the center of the model, compared to other elements, is apparent. Values stand higher in the development of all the other critical elements. The model states that the seven elements need to balance and reinforce each other for an organization to perform well.
How to Use The McKinsey 7s Framework?
The McKinsey 7s framework proves super-efficient in dire moments, particularly in ones where the overall organizational design and effectiveness take critical hits and crumble under question.
Although the model seems pretty straightforward and self-explanatory, applying it to an organization undergoing a crisis takes a tremendous amount of effort and energy and is far beyond “easy.” Usually, leaders and managers misunderstand of what should be done, what element to re-aligned, or how to maintain alignment to get the company up and going once more; things can take a turn for the worst in a blink of an eye.
If managers want to keep their ship from sinking into the depths of history and make it out of the storm with their heads still on their shoulders, they need to adopt new changes. These changes, as mentioned above, come in form aligning to the McKinsey 7s framework elements, which encompass restructuring, am organizational merger, new processes, and a possible presidential over-throw.
If you still have no limpid idea on how to move along with the model, here are some steps to get you up to speed:
Step 1: Finding Where Needs to be Aligned or Changed
Step 1 entirely goes to finding the problem. The goal is to look at the 7s elements and see if they’re adequately aligned with each other or not. Typically, managers are already aware of how the 7s model works in their company but, in case they’re not, some online tools lend their checklist tools to applicants to use and figure out the situation.
After placing the problem and answering the right questions, managers should look for gaps, soft-spots, clogs, any inconsistencies, and serious weaknesses happening between the elements and the relationships.
Step 2: Come Up With The Optimal Design
Now, the time has come for managers to find out the best and most useful organizational design, with a little help from the top management, of course. When this design comes out, aligning the elements get much more straightforward; by knowing the craved alignment, managers can set the goal for the whole company and make the necessary stride to achieve it. With this step comes a lot more complexities, since it has nothing in common with identifying how the seven elements work in the organizations or the fact that they’re aligned or not. First, managers need to find the optimal alignment design, which, by itself, can prove to be very challenging, since nobody has a clue in the firm. Second, they need templates or predetermined organizational designs that they can put to work, and they have to do a lot of study and research. The aftermath of these researches will aid them in deciding with design or alignment to select and how to cope with them.
Step 3: The Questions of Where and What
This is when managers take the words and transform them into an action plan, which explains the areas managers want to realign and how they want to do it. In this step, leaders check the alignment between shared values and a firm’s management and structure and act based on it. At this point, they have to decide which top management to let go or help to change their management style and how to restructure the interior of the firm.
Step 4: Doing What Nobody Else Can Do
We’re already at the most crucial stage of the process, the implementation; only well-implemented reshapes and changes can have the positive effects everyone’s looking for. To solve any feasible problem throwing a wrench into the implementation changes, leaders have to hire professionally-trained consultants to resolve the situation in the best way possible.
Step 5: Not Forgetting About The 7s
The seven elements: strategy, structure, systems, skills, staff, style, and values, don’t always stay the same, and change regularly. A change in one element still has effects on the other elements and requires implementing a new organizational design. So, don’t forget to continuously review each element and its relationship with the other six elements to get the utmost efficiency out of the McKinsey 7s frameworks.
We can shorten the steps in another interpretation. Follow these steps:
- Start with your shared values: are they consistent with your structure, strategy, and systems? If not, what needs to change?
- Then look at the hard elements. How well does each one support the others? Identify where changes need to be made.
- Next, look at the soft elements. Do they support the desired hard elements? Do they support one another? If not, what needs to change?
- As you adjust and align the elements, you’ll need to use an iterative (and often time-consuming) process of making adjustments, and then re-analyzing how that impacts other elements and their alignment. The result of better performance will be worth it.
Whichever method you pick to use the McKinsey 7s framework, the model will give you insight and knowledge into how to analyze your company’s current situation, what to expect from the future of the market and its spheres of influence, and how to fill in the gaps and inconsistencies in your organizational design which holding you from achieving your goals and taking your company into a brighter, more promising future.