MCKINSEY 7S

ADIDAS
FRAMEWORK

Ritika Anand
20BSP1901

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 7’S MCKINSEY’S MATRIX
Mckinsey developed a new framework to better represent the challenges of Services
Marketing and for analysis and improving organizations effectiveness i.e., the 7S
model which can be shown with the help of the following diagram:

Hard Elements Soft Elements

Strategy Shared Values
Structure Skills
Systems Style
Staff

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1.STRATEGY

a) Clearly defined
The strategic direction and the overall business strategy for Adidas are clearly
defined and communicated to all the employees and stakeholders. This helps
the organization manage performance, guide actions, and devise different
tactics that are aligned with the business strategy.

b) Guiding behavior for goal attainment

The strategic direction for Adidas is also important in helping the business guide
employee, staff, and stakeholder behavior towards the attainment and
achievement of goals. SMART Goals are set with short- and long-term deadlines
in accordance with the business strategy.

c) Competitive pressures: -
Adidas’s strategy also takes into consideration the competitive pressures and
activities of competitors. The strategy addresses these competitive pressures
through suggestive measures and actions to address competition via strategic
tactics and activities that ensure sustainability to Adidas via adapting to market
changes, and evolving consumer trends and demands.

d) Changing consumer demands: -

An important aspect of the strategy at Adidas is that it takes into constant
consideration the changing consumer trends and demands, as well as the
evolving consumer market patterns and consumption behavior. This is an
important part of the strategic direction at Adidas as it allows the company to
remain competitive and relevant to its target consumer groups, as well as allows
the company to identify demand gaps in the consumer market.
e) Flexibility and adaptability: -
The strategy at Adidas is flexible and adaptable. This is an important aspect of
the strategic direction, and strategy setting at Adidas. Rigidity in strategy leads a
company and a business to often become stagnant and obstructs advancement,
and progression with evolving changes in the consumer markets.

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2.STRUCTURE

a) Organizational hierarchy
Adidas has a flatter organizational hierarchy that is supported by learning and
progressive organizations. With lesser managerial levels in between and more access
to the senior management and leadership, the employees feel more secure and
confident and have higher access to information.

b) Inter-Departmental coordination
Adidas has high coordination between different departments. The company’s
departments often form inter-department teams for projects and tasks that require
multiple expertise. All coordination between different departments is effective and
organized.

c) Internal team dynamics

Adidas encourages teamwork and team-oriented tasks. Where jobs require individual
attention and scope, the company also assigns individual responsibilities and job tasks.
However, all employees at Adidas are expected to be team players who can work well
with and through other members, and who get along well with other people.

d) Centralization vs. decentralization

Adidas has a hybrid structure between centralization and decentralization. Like many
progressive organizations, Adidas largely supports decentralized decision making. Job
roles at Adidas are designed to be carried out with responsibility, and employees often
set their goals with mutual coordination and understanding with the supervisors.

e) Communication
Adidas has a developed and intricate system for ensuring communication between
employees, and different managerial levels. The communication systems at Adidas
enhance the overall organizational structure. The systematic, defined, and organized
communication allows an easy flow of information and ensures that no organizational
tasks and goals are compromised because of a lack of communication, or
misunderstandings.

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3.SYSTEMS
a) Organizational systems in place
Adidas has defined and well-demarcated systems in place to ensure that
the business operations are managed effectively and that there are no
conflicts or disputes. The systems at Adidas are largely departmental in
nature, and include, for example:
i. Human resource management
ii. Finance
iii. Marketing
iv. Operations
v. Sales
vi. Supply chain management
vii. Public Relation Management
viii. Strategic leadership

b) Defined controls for systems

Each of the defined and demarcated systems at Adidas has especially designed
tools and methods as controls for evaluating performance and goal attainment.
These controls and measures are designed specifically in different departments
based on the nature of their tasks and responsibilities.

c) Monitoring and evaluating controls

Adidas continually evaluates its systems through the designed controls. This
monitoring of the performance is continual and ongoing. This is largely done
through observation and informal discussions. Feedback to employees and
overall department heads is informally given regularly as and when is required.
Formal evaluation of performance is also conducted semiannually – or quarterly,
depending on the need and the urgency of the projects and assigned tasks.

d) Internal processes for organizational alignment

Adidas also has special processes and methods for ensuring that all departments
and systems within the organization are aligned and working in harmony
towards the greater business goals and targets. This is made possible through

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 ensuring that all systems are designing and working towards goals and targets
specific to their expertise under the broader business vision and strategy.

4.SHARED VALUES

a) Core values
The core values at Adidas are defined and communicated to foster a creative
and supportive organizational structure that will allow employees to perform
optimally and enhance their motivation and organizational commitment. The
core values at Adidas include, but are not limited to:
i. Creativity
ii. Honesty
iii. Transparency
iv. Accountability
v. Trust
vi. Quality
vii. Heritage

The Adidas business also ensures that all its activities and operations are conducted
with high ethical and moral standards that redefined and benchmarked against
international criteria.

b) Corporate culture
Adidas encourages an inclusive culture that celebrates diversity. The company has an
international presence, and production units that are spread across different countries,
as such, Adidas ensure that its organizational culture is supportive of diversity and has
internal policies to reduce incidences of discrimination.

c) Task alignment with values

Adidas ensures that all its job tasks and roles are aligned with the core values that the
company propagates. This means that all activities, tactics, and strategic tactics
employed by Adidas will reflect its core values and will not deviate away from these.

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This is to ensure a consistent, and reliable brand image, as well as an honest
organizational culture.

5.STYLE

a) Management/Leadership style
Adidas has a participative leadership style. Through a participative leadership style,
Adidas can engage and involve its employees in decision-making processes and
managerial decisions. This also allows the leadership to regularly interact with the
employees and different managerial groups to identify any potential conflicts for
resolution, as well as for feedback regarding strategic tactics and operations.

b) Effectiveness of leadership style

The participative leadership style is highly effective in achieving the business goals and
vision of the organization. Employees feel to be active members of the organization
who are valued for their suggestions, feedback, and input.

c) Cooperation vs competition – internally

With its supportive and encouraging organizational culture, Adidas gives way to
internal collaboration and cooperation between employees, systems, teams, and
departments. This cooperation and collaboration at Adidas is important since its
operations are spread globally, and also because tasks and responsibilities within the
company often require inter-departmental feedback and input.

d) Team vs Groups
Adidas has effective and functional teams and works with them internally to achieve
its various business goals and objectives, and complete tasks. The company’s
management is encouraging and supportive, and the leadership provides a motivating
and pragmatic vision toad achieve.

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6.STAFF

a) Employee skill level vs business goals

Adidas has enough employees employed across its global operations. Employees for
different job roles and positions are hired internally as well as externally – depending
on the urgency and the skill levels required. Based on this, it is seen that Adidas has
employees who are skilled as per the requirements of their job roles and positions. All
employees are given in house training to familiarize themselves with the company and
its values. External training along with in-house training is provided for skill level
enhancement.

b) Number of employees
Adidas has employed many employees. The number of employees varies from country
to country as per the requirements and needs of the business and operations. The
global team of Adidas is an inclusive one that accepts, and encourages diversity, and
works in synchronization with members to ensure attainment of business goals. The
team member sand employees are the most important part of business success for
Adidas.

c) Gaps in required capabilities and capacities

Adidas has a well-defined system for identifying potential needs of capabilities and
capacities for the organization. The human resource function of the business has a
systematic process that aligns all other departments to identify potential vacancies or
skill gaps. Based on the nature of the need, the human resource department arranges
for recruitments which may be permanent or contractual in nature, as well as arranges
training sessions if need be for the current workforce.

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7.SKILLS

a) Employee skills
Adidas has a commendable workforce, with high skills and capacities. All employees
are recruited based on their merit and qualifications. Adidas prides itself on hiring the
best professionals and grooming them further to facilitate growth and development.

b) Employee skills vs task requirements

Adidas has defined tasks and job roles and hires and trains employees for skill levels
accordingly with respect to those. The company ensures that all its job requirements
are met and that employees have the sufficient skills to perform their respective jobs
in accordance with the values and culture as well as the business goals and strategy of
Adidas.

c) Skill management
Adidas pays particular attention to enhancing the skills and capacities of its employees.
It arranges regular training and workshops – internally as well as externally managed-
to provide growth and development opportunities for its employees. Adidas focuses
on personal as well as professional growth for its employees and works accordingly
with them.

d) Company’s competitive advantage

The human resource is one of the core competitive advantages of the company. The
skills of employees are developed specifically for job roles and requirements at Adidas
and provide a competitive benefit to the company – where players cannot imitate
employee skills or training. This creates a unique and non-substitutable competency
for Adidas.

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