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What is McKinsey’s 7S Model?
This model was developed by McKinsey & Co. Consultants in concert with Harvard Business School and Stanford Business School professors. The model presents the attributes of a company that are influenced by these 7 factors. The factors are interrelated and influence each other. The factors were identified as characteristics of successful organizations.
The McKinsey 7s model is commonly applied within the organization as follows:
- When planning or modifying the organizational structure.
- When planning for increased efficiency.
- When effectuating an organizational change.
- When developing or executing a new strategy.
- When projecting and planning for possible change.
- When the company is undergoing a transaction, such as a merger or being acquired.
The 7S’s are:
- Shared Values – Shared values as a factor assumes the center of the model with other factors surrounding it. Shared values include the traits, behaviors, and characteristics that are incorporated into the company’s mission? Shared values relate to the super-ordinate goals of the organization.
- Strategy – What is the organizational-level strategy of the company? This includes how the company provides value with a given market.
- Structure – How is the company organized? The organizational structure of the organization is based on the hierarchical levels of authority and reporting.
- Systems – What systems interconnect all divisions of the company? The systems include: business systems, performance management systems, financial systems, communication systems, reward systems, information systems, customer satisfaction monitoring systems.
- Staff – What are the capabilities of the employees of the organization? It also looks at the effort of the organization to improve employee education, training, development, and empowerment.
- Style – What is the corporate culture, and how do managers behave? More specifically, what is the attitude or approach of a manager when interacting with subordinates. How does it affect employees?
- Skills – What are the skills of the employees? This relates to specific abilities. Managers are generally assessed on conceptual, human, and technical skills.
The hard elements of this model are strategy, structure, and systems. The soft elements are shared values, staff, style, and skills.
The primary criticisms of this model is that it does not provide concrete guidance during the planning process.