What is it?
The 7S Model was created by McKinsey to bring structure to analysing organisations. It divides organisations up into 7 components – Strategy, Structure, Systems, Skills, Staff, Shared values and management Style. The model not only considers these aspects of the organisation individually, the biggest insights come from analysing if they “fit” together to create an aligned organisation, or if they create dissonance.
When is it useful?
The 7S Framework is an organisational diagnostic framework.
It can be used to troubleshoot problems within the current organisation.
It is also a valuable checklist to map how an organisation needs to change in order to align it to a new strategy.
The 7S framework provides a structure when you are analysis an organisation. It forces you to take a broad perspective, not just looking at the obvious aspect of organisation – structure, but the softer side too.
How do you do the analysis?
In an organisational diagnostic, the primary data will come from many interviews within the company, maybe supplemented by surveys and process mapping. The focus of the analysis is to identify misfit – where does the organisation hold us back? Structure your interviews to explore each one of the 7S in turn, also mapping the fit between each one.
7S is also useful in working out how to implement a new strategy. The implications of the change in the strategy can be traced into each of the other 6S, then actions to realign the organisation can be identified
McKinsey twisted the definition in order to fit them into 7S. In order to use this for a company you need to be clear about what each element means:
- Strategy is the starting point. As the strategy evolves, the organisation has to evolve too.
The 7S is sometime redrawn with the three ‘hard’ organisational Ss next:
- Structure is the organisation’s formal structure. Who reports to whom, what is the hierarchy, what are the decision rights, who is in charge, how does the matrix work? Frequently in your diagnostic, you will find that the organisation structure has become too complex, eroding accountability and clarity. Structure is the blunt, but powerful instrument for aligning an organisation to its strategy. The general rule is that the further away units are organisationally, the harder it will be for them to cooperate and work together. So you want to put units that need to work closely together next to each other on the organisation chart. Designing an organisation to fit the strategy is a major field in its own right.
- Skills is more accurately called processes or capabilities, and focusing down further on what is most important, the processes where your strategy requires you to have a competitive advantage (your core competences). In general, the organisation should be structured around these processes to enable them to be the best they possibly can be. Once you have decided what is core and what is context, the next decision is to consider outsourcing from beyond the boundary of the organisation.
- Systems is the infrastructure of the company. It includes the key IT systems, but also extends to the supporting processes like risk management, budgeting, strategy development and performance management. It is appropriate to consider information resources and big data capture here.
After these ‘hard’ three come the three ‘softer’ Ss:
- Staff refers to the demographics of your company. What are their backgrounds, experience, what diversity are you looking for? What are the key jobs, and what is your definition of “top talent” where you have to hire the best in the world?
- The core of Shared Values is the purpose of the company, and this extends to the full vision, mission and values (VMV) of the company. What do people care about? What creates meaning for their work, transforming it from a job into a calling?
- Management Style is deeply intertwined with Shared Values, but represents the informal culture of the company. How do we do things around here? What are the informal unwritten rules? What gets people promoted, what gets them fired? Who are the heroes?
I want to know more
McKinsey enduring ideas interactive