The McKinsey 7-S Model

An organization can quickly and easily become a hard thing to control. Even within small companies the scope of everything that needs to get done, and all the people who need to be managed, can overwhelm the most organized of managers. In order to take your business where you want it to go, you need to make sure that all aspects of the organization are aligned and pointing the right direction. If even one or two areas of your business are not working in concert with the rest, your performance will fall short of expectations.

The McKinsey 7S Model

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The McKinsey 7-S Model is a tool designed to help business owners and managers understand how aligned their organization is, and where it can be improved. As you might guess from the title, there are seven elements which make up this model – strategy, structure, systems, shared values, skills, style, and staff. Each of these elements it vital to your success, yet each needs its own time and attention to function properly. Only when these separate parts of your organization are able to come together can you be confident that you are on the right path.

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To help you better understand this model, it is divided into two categories – hard elements, and soft elements. Three of the factors are categorized on the hard elements side, with four on the soft elements side. Let’s take a look at each of these separately to better understand how the McKinsey 7-S Model can influence your organization.

The Hard Elements

The three factors which are considered as ‘hard’ elements under this model are strategy, structure, and systems. For most managers, these are going to be the elements that are easier to understand and quantify. In fact, these are probably the areas that you are currently spending most of your time, even if you don’t think about them as such.

The Hard Elements

These are the classic elements of business operations and your work on a daily basis very likely relates to one or more of these areas.

Strategy. This is a high-level perspective on the business and how you plan to rise above your competitors over time. Most likely, you will be able to draw most of your strategy from the business plan that should have been drafted when you were first getting started. In some cases, your strategy could be defined by the sub-section of the business in which your work. For example, if you are the accounting manager within a larger organization, your strategy may relate to how you can best provide the accurate data that is required by those above you – as opposed to having it relate the business operations as a whole.

Structure. The structure element is another one that you probably have a handle on already. Structure is often visualized in the form of an organizational chart or other document that outlines who reports to whom. This structure could deal in terms of the whole organization, or simply a department within the company, such as the accounting department from our previous example.

Systems. How the job gets done. This is the work that is taking place on a regular basis to keep the business operating and moving forward. Most likely, systems is where you spend the vast majority of your time as a manager. Making sure all of your employees are working on the right projects, and getting them done in time, is the life of a leader within any business. Without systems that function properly, none of the rest of the model will get you anywhere.

It should be pretty easy to get a handle on these hard elements of the model. However, just by thinking of them in this way and making sure each is aligned to the other, your management style could be improved or refined.

The Soft Elements

The Soft Elements

This is where it will get trickier for many people. The soft elements within this model are somewhat harder to define, and definitely more difficult to quantify. They are no less important, however, and the good leader will give them just as much time and attention as the previous group.

Shared Values. Think of this point as the overall culture of the company, and the purpose behind everything that is done. The shared values of an organization should stretch to all employees, to create a feeling of cohesiveness and camaraderie.

Style. How are you going to lead your team? The style of leadership that you use should fall in line with both the culture of the organization, and the needs of your team. There are many different leadership styles employed by managers depending on the situation, so you will need to craft your own approach to the job as you see best fit based on the circumstances around you.

Staff. Understanding the strengths and weaknesses of your team is a classic leadership responsibility – but you also need to know how to then get the most from them while also developing their skills along the way. A good leader will constantly be improving their team so they are stronger tomorrow than they were today.

Skills. In many ways, this point goes along with staff in terms of knowing what you can get done in-house with the skills you have available to you. You never want to ask someone on your team to do something they aren’t capable of, so having a strong understanding of the skills within your staff is something that you should prioritize.

Within these seven elements is essentially everything that a good manager needs to pay attention to on a regular basis. You probably already have a good feel for many of these points, but some of them may be new to you – or you may have let them slide recently. Organizational alignment is an important quality within any business, and following the McKinsey 7-S Model is a good way to get started working toward that goal. Take the time to review the model carefully and then apply it to the existing condition of your company.

Key Points

  • The McKinsey 7-S Model is a tool designed to help business owners and managers understand how aligned their organization is, and where it can be approved.
  • The model is most often used as an organizational analysis tool to assess and monitor changes in the internal situation of an organization.
  • It is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing.
  • The model can be used to help identify what needs to be realigned to improve performance, or to maintain performance during other types of change.

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