The Organizational Strategist

April 24, 2011

McKinsey 7S Model: A strategic assessment and alignment model


-Introduction-

The 7S model is a strategic model that can be used for any of the following purposes:

  • Organizational alignment or performance improvement
  • Understanding the core and most influential factors in an organization’s strategy
  • Determining how best to realign an organization to a new strategy or other organization design
  • Examining the current workings and relations an organization exhibits

 

The model, made famous by the McKinsey consulting company, is good for a thorough discussion around an organizations activities, infrastructure, and interactions.

-The model and its usage-

Here is the 7S model that portrays seven elements of an organization.

 

I define the elements as follows:

Strategy – This is the organization’s alignment of resources and capabilities to “win” in its market.

Structure – This describes how the organization is organized.  This includes roles, responsibilities and accountability relationships.

Systems – This is the business and technical infrastructure that employees use on a day to day basis to accomplish their aims and goals.

Shared Values – This is a set of traits, behaviors, and characteristics that the organization believes in.  This would include the organization’s mission and vision.

Style – This is the behavioral elements the organizational leadership uses and culture of interaction.

Staff – This is the employee base, staffing plans and talent management.

Skills – This is the ability to do the organization’s work.  It reflects in the performance of the organization.

 

To assess each of these elements, here are some questions to ask:

Strategy –

  • What is the organization’s strategy seeking to accomplish?
  • How does the organization plan to use its resources and capabilities to deliver that?
  • What is distinct about this organization?
  • How does the organization compete?
  • How does the organization adapt to changing market conditions?

Structure –

  • How is the organization organized?
  • What are the reporting and working relationships (hierarchical, flat, silos, etc.)?
  • How do the employees align themselves to the strategy?
  • How are decisions made? Is it based off of centralization, empowerment, decentralization or other approaches?
  • How is information shared (formal and informal channels) across the organization?

Systems –

  • What are the primary business and technical systems that drive the organization?
  • What and where are the system controls?
  • How is progress and evolution tracked?
  • What internal rules and processes does the team utilize to maintain course?

Shared Values –

  • What is the mission of the organization?
  • What is the vision to get there?  If so, what is it?
  • What are the ideal versus real values?
  • How do the values play out in daily life?
  • What are the founding values that the organization was built upon?

Style –

  • What is the management/leadership style like? How do they behave?
  • How do employees respond to management/leadership?
  • Do employees function competitively, collaboratively, or cooperatively?
  • Are there real teams functioning within the organization or are they just nominal groups?
  • What behaviors, tasks and deliverables does management/leadership reward?

Staff –

  • What is the size of the organization?
  • What are the staffing needs?
  • Are there gaps in required capabilities or resources?
  • What is the plan to address those needs?

Skills –

  • What skills are used to deliver the core products and/or services? Are these skills sufficiently present and available?
  • Are there any skill gaps?
  • What is the organization known for doing well?
  • Do the employees have the right capabilities to do their jobs?
  • How are skills monitored, assessed, and improved?

 

Once the questions are answered, the data should be examined.  The analysis should look for the following aspects:

  • Consistency
  • Alignment
  • Conflicts
  • Gaps
  • Support
  • Strengths
  • Weaknesses

The uses of the model can be as a static picture to determine how effectively the organization is implementing its strategy.  Also, it can be used two-fold with a current state and an intended future state.  By comparing the current and future states, gaps can be assessed, which lead to improvement and action plans.  That latter case makes enables the model to be used for large scale change.

-Summary-

Like any model, there are good fits and poor fits.  This is a handy model for taking a snapshot and comparing that to the desired state or improvement.  It visually shows how everything is linked and understanding the larger implications of change can be very revealing.  It is much like how a general doctor can help diagnose a patient’s situation, but the fine-tuned skill of a surgeon can be used to make the specific, desired changed. 

Update:

Read more about how to leverage a McKinsey 7S Model assessment on my follow up article McKinsey 7S Model: Progressive change.

Sources:

This article’s content was based on http://www.themanager.org/models/7S%20Model.htm, http://www.mindtools.com/pages/article/newSTR_91.htm, and my experience and opinions.

About these ads

1 Comment »

  1. This is very informative! THANK YOU!

    Comment by Jaz Minn — October 7, 2012 @ 8:27 pm


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

The WordPress Classic Theme. Blog at WordPress.com.

Follow

Get every new post delivered to your Inbox.

Join 50 other followers

%d bloggers like this: