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7s Model

The 7S Framework is an organizational model developed by McKinsey & Company used to assess the alignment of seven internal elements that impact organizational effectiveness. The seven elements are: strategy, structure, systems, shared values, style, staff, and skills. The framework views these elements as interdependent and advocates that changes in one element necessarily requires changes in the others to ensure strategic fit. Starbucks is used as an example of a company that effectively aligns its seven elements, including a flexible structure, strong systems, shared goal of quality coffee, and innovative, team-oriented style. The framework's limitations are that it does not provide guidance on follow up actions or implementation.

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UJJAL SAHU
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2K views

7s Model

The 7S Framework is an organizational model developed by McKinsey & Company used to assess the alignment of seven internal elements that impact organizational effectiveness. The seven elements are: strategy, structure, systems, shared values, style, staff, and skills. The framework views these elements as interdependent and advocates that changes in one element necessarily requires changes in the others to ensure strategic fit. Starbucks is used as an example of a company that effectively aligns its seven elements, including a flexible structure, strong systems, shared goal of quality coffee, and innovative, team-oriented style. The framework's limitations are that it does not provide guidance on follow up actions or implementation.

Uploaded by

UJJAL SAHU
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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McKinseys

7S Framework for Strategic Management

By:
UJJAL SAHU
MBA (2016-18)
CENTRAL UNIVERSITY OF ORISSA
Contents:

Introduction
Structure is not Organisation
The Seven Independent Elements
Application
Starbucks and 7S
Limitations
Conclusion
INTRODUCTION

This theory is mainly an organizational analysis tool used to access and


monitor the internal changes in the organization. It was developed by Robert
H. Waterman Jr and Thomas J. Peters.

The McKinsey name in the theory comes from McKinsey and Co.

The 7S framework was first formulated in the book In Search of Excellence


and later presented in June 1980 in a journal article titled Structure is not
Organisation.

The main focus of this theory is organizational change like restructuring,


merger, new approach, change of leadership and so on.
Robert H. Waterman Jr Thomas J. Peters.
STRUCTURE IS NOT ORGANISATION
Diagnosing and solving organization problem does not include only restructuring
it. Rather it involves addressing many more equally significant elements one of
which is structure.
In the face of different complexities involved in decision making a single blunt
element like structure fail to prove as a master tool in managing organization
change.
Thus effective organizational change is not just structural change, although it is
essential, and it is also not solely a strategy shift even if strategy is critical.
Organizational change is the interaction between seven elements i.e. Structure,
Strategy, Skills, Staff, Style, Systems and most importantly subordinate
goals/shared values.
THE SEVEN INDEPENDENT ELEMENTS
There are multiple elements apart from strategy and structure which play an
important role in effecting an organizational change and all are needed to be
dealt with equal importance
The diagram of the framework conveys the notion that it is difficult rather
impossible to effect a change in one element without affecting others.
Failure in execution of a change arises from under valuation and under analysis
of other Ss while focusing one.
The shape of diagram is essential as it shows no hierarchy thus refuting any
prioritization and making the framework dynamic in application.
Hard elements are those elements which are easier to identify and define. They
are Strategy, Structure and System.
Soft elements are those which are difficult to identify and often have a cultural
aspect to them. These are- Skill, Staff, Style and Shared Values.
STRUCTURE : Structure is the framework on which the organization
stands and determines its hierarchies. It determines who reports to
whom.
STRATEGY : Strategy is the plan and determination of the
methodology to be employed to achieve the organization objective.
SYSTEM : System is the standard operating procedures which are
followed in different types of day to day activities of the organization
for smooth functioning of the same.
SHARED VALUES : Shared values are the core values which an
organization adheres to and is in the centre of any change which
occurs in it.
STYLE : It is the way the leadership of the organization functions and
leads the path ahead.
STAFF : These are the people of the organization and their general
characteristics and capabilities.
SKILLS : These are the competencies and beliefs possessed by the
people working in the organization.
APPLICATION

The 7S framework equip us with an analysis tool to compare the present


situation with that of a predicted future and take necessary steps to bridge
the gaps as and when they might appear. This is done easily through a set of
questions and finding their answers for every element in the framework.

STRATEGY
What is our strategy?
How do we intend to achieve our objective?
How do we deal with competitive pressure?
How are changes in customer demands dealt with?
How is strategy adjusted for environmental issues?
Structure:
How is the organization divided?
What is the hierarchy?
How do the various departments coordinate activities?
How do the team members organize and align themselves?
Is decision making and controlling centralized or decentralized? Is
this as it should be, given what we're doing?
Where are the lines of communication? Explicit and implicit?

Systems:
What are the main systems that run the organization?
Where are the controls and how are they monitored and evaluated?
What internal rules and processes does the team use to keep on
track?

Shared Values:
What are the core values?
What is the corporate/team culture?
How strong are the values?
What are the fundamental values that the organization was built on?

Style:
How participative is the management/leadership style?
How effective is that leadership?
Do employees/team members tend to be competitive or cooperative?
Are there real teams functioning within the organization or are they
just nominal groups?

Staff:
What positions or specializations are represented within the team?
What positions need to be filled?
Are there gaps in required competencies?
Skills:
What are the strongest skills represented within the organization?
Are there any skills gaps?
What is the organization known for doing well?
Do the current employees/team members have the ability to do the job?
How are skills monitored and assessed?
STARBUCKS AND THE 7S

Starbuck is a coffee retailer created in Seattle, Washington in 1985. The


company objective is to establish Starbucks as the most recognized and
respected brand of the world. As of 2014 it has expanded its business
all over the world with 21,366 outlets spread across countries of Asia,
Africa, Australia, American Continent and Europe.
Strategy : Starbucks strategy to become the most recognised and respected
brand in the world is to expand aggressively and selectively pursue different
ventures to leverage the brand value by improving the existing products and
introducing new one.
Structure: Although Starbucks has a regular structure of human resources,
marketing, CSR, public affairs but the corporate culture is loosely structured
and the employees are referred to as partners so as to build trust and
facilitate new ideas.
Systems: Starbucks has a very intricate system in place for training, roasting
and purchasing thus maintaining a standard for the customers to rely upon.
Shared Goal: The shared goal of the company is to leverage the Starbucks
experience and maintain the quality uncompromised so as to be the finest
purveyor of coffee in the world.
Skills: The skills required by staff is to be friendly and knowledgeable, be
able to reinforce the Starbucks experience through non-retail operations and
a firm and complete knowledge of coffee.
Style: The style of the organisation is innovative, flexible, and team
oriented.
Staff: Staff of the organization is the real strength of it. Its one of the
best customer friendly staff of the world, in addition the employee
turnover is very low as they are offered numerous benefits and
incentives. The major role in the success of good staffing is flexible
working environment which empowers innovative thinking. All this when
coupled with the strong vision embedded in the minds of the employees
makes Starbucks one of the leading coffee retailers of the world.
LIMITATIONS

This framework though highly useful has following limitations:


There is no provision to explain the action triggering mechanism after the
analysis is done.
There are no guidelines for follow up action after the analysis has been
done.
We have to depend on other techniques and research for further course of
action.
The conclusions drawn fall short of being actionable thus making it an
incomplete tool.
The points highlighted are very generic in nature with regards to the
organisations and lack specific directions for different departments of the
it
CONCLUSION

The McKinseys 7S Framework of management provides managers with a very


potent tool for analysis of the organisation. Though it has its own set of lacunae
it still suffices many needs of the organization and the changes within which
would have otherwise been neglected. As highlighted by Fortune about 90% of
well planned changes fail to achieve objective due to overemphasis on one
aspect and under emphasis of other and this theory address that issue. Thus the
out look of different aspects of organisation as a hierarchy is changed to that of
a synchronous framework which works in conjunction to achieve the specified
objectives.
THANK YOU

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