McKinsey 7s: Organizational Design Assessment

In the business landscape of the 1970s and 1980s, strategy and structure carried far more weight than other “softer” areas of business, such as human resources, in ensuring organizational success. McKinsey’s Robert Waterman and Tom Peters stepped in to develop a framework that elevated the importance of these other components. Enter: The McKinsey 7s framework.

Developed in the 1980s, this is a business framework that emphasizes the importance of human resources and shared values as crucial, interrelated components to meeting company objectives. Without further ado, let’s take a closer look at the McKinsey 7s framework!

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What Is The McKinsey 7s Model?

McKinsey 7s is a framework that recognizes that strategy and structure are not the end-all-be all in determining the success of an organization. The framework was designed to help organizations examine internal areas to determine if they are aligned. Why? To guarantee success during times of change – e.g., leadership changes, M&A, or digital transformation. This model is also helpful within individual teams or with specific projects.

McKinsey 7s Framework Definition

The McKinsey 7s framework definition is relatively simple. This framework is a strategic planning tool that examines organizational design by reviewing specific functional areas to determine if they are internally aligned.

The McKinsey 7s framework comprises 7 equal and non-hierarchical areas that are inter-connected. These specific areas are divided into “hard” and “soft” areas. Hard areas are those that are easily defined. The soft areas are more challenging to identify because they aren’t as tangible and can be influenced by the culture of a company.

Irrespective of whether the area is soft or hard, each area is equally important in ensuring the success of an organization and must be aligned to help an organization reach its goals. These areas are defined as follows:

McKinsey 7s Framework-SkillMcKinsey 7s Framework-Culture

 

Hard Areas:

Systems – define how work gets done
Structure – involves how an organization is structured from a staffing perspective, including groups and teams
Strategy – how an organization plans to succeed competitively and reach its goals

Soft Areas:

Skills – involve a company’s unique capabilities
Staff – comprised of an organization’s employees, including both the number of employees and their unique skillsets
Style – involves behavior patterns prevalent within an organization at each level of the organization
Shared values – involve an organization’s culture and can be found in its mission and vision

Example of McKinsey 7s Model

The following is a pictorial example of the McKinsey 7s model:

As the above exhibit of the McKinsey 7s model shows, each area is connected and dependent on each other. Change in one area affects another. A weakness in one could jeopardize an organization’s ability to meet its objectives – either now, or in the future.

In the center of the model is shared values. Every area surrounds shared values, representing the dependence each area has on these shared values to properly develop and evolve.

McKinsey 7s Model Application

The McKinsey 7s model application is not as simple as identifying if each internal area is aligned to support an organization’s success. To apply this framework properly, the right cross-functional team within an organization must be compiled.

Will an organizations’ systems sustain it through a merger? Is there appropriate staffing in place to support a fast-growing division? Will the organizational structure support rapid growth – with the right people on the appropriately sized teams?

Even once all of the right questions have been asked for each internal area and the framework has been completed, additional steps must be taken. An action plan must be established to implement the necessary changes to ensure alignment. After implementation, the changes will need to be double and triple checked to ensure the intended alignment is achieved.

The McKinsey 7s model isn’t a catch-all framework and isn’t meant to be – it focuses solely on internal areas, not external ones, such as capital and infrastructure. Like every model, there are limitations of the McKinsey 7s model.

McKinsey 7s Model – Ensuring an Organization is Set-up for Success

The McKinsey 7s Model, albeit internally focused, helps an organization ensure it is set up for continued growth by identifying areas that are not mapping to overall company goals.

If your organization needs help establishing your business strategy, re-thinking your business model, or navigating the complexities of the ever-changing business landscape, we offer corporate training for just that. Write us, and let’s chat!

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Filed Under: business consulting, Consulting skills, management consulting, McKinsey Consulting