What is it?

The McKinsey 7-S framework was developed by Tom Peters and Robert Waterman at McKinsey & Company. It argues that organisational effectiveness involves more than simply putting in place the right command and control structure to coordinate the delivery of an organisation’s strategy. Instead, the framework maps a constellation of seven interacting factors that are key to helping people function effectively together, in order to achieve a high performance organisation.

Framework

What each element means:

  1. Style
    Also referred to as culture, this represents the way things are done and, particularly, the way the leadership team conducts itself in the organisation. The leadership’s style will influence how the rest of the employees behave. Therefore, if the leadership visibly embraces, champions and demonstrates cost transformation and management, then people around the organisation will typically follow.
  2. Skills
    Refers to the skills needed to deliver the cost transformation and management strategy. Having the right skills to deliver the strategy is vital and skills gaps can pose a risk to achieving cost competitiveness objectives.
  3. Systems
    These are the activities, processes and procedures that people engage in to do their work. It also includes software systems, which are increasingly automating activities, processes and procedures.
  4. Structure
    The hierarchy of control exercised through delegated responsibility. The structure should be as simple as possible to help people understand who is accountable for specific results.
  5. Staff
    This includes the inherent talents of the organisation’s people, the number of staff and the diversity needed in each area to optimise organisational capability and capacity.
  6. Strategy
    Organisations need to compete in volatile, uncertain, complex and ambiguous environments. So, strategy needs to respond to this with agility. Organisations must constantly adapt to strategies to succeed.
  7. Shared values
    These encapsulate the organisation’s purpose or its societal mandate. The organisation’s purpose tends to remain a fundamental constant over time and this purpose shapes the organisation’s values.

Having shared values at the centre of the constellation emphasises that it is the core values of the organisation, aligned to the organisation’s purpose, that shape the remaining elements.

What benefits does McKinsey 7-S provide?

Perhaps strategy is changing and execution requires new delivery platforms. McKinsey’s 7-S framework provides a useful approach to organisational design, specifically for:

  • Facilitating organisational change
  • Aligning the organisation to new strategy
  • Aiding the merger or acquisition of organisations
  • Improving the performance of a company
  • Modelling the likely effects of future changes within a company.

Implementing McKinsey 7-S? Questions to consider:

  • Is there senior support to review the organisation’s design?
  • Are the seven elements of the framework aligned with each other?
  • What is the best organisational design to support the objectives?
  • What needs to change to achieve the best organisational design?
  • Do you have the necessary resources to bring about the changes identified?

CLICK TO FIND OUT MORE

  SHARED
VALUES
STRATEGY STRUCTURE SYSTEMS STYLE STAFF SKILLS
SKILLS

Is it clear how our shared values complement the skills and competencies of our people (for example, technical, business, people and leadership) that we need to succeed?

Do we have the right skills and competencies to develop and deliver strategy?

Does our structure get the most out of our skills and competencies?

Do the skills and competencies of our organisation complement those of our interdependent organisations?

Are our systems and processes complementary to the skills and talents of our people? For example, has increased automation left some business processes with over-qualified people? Or do our systems and processes inadequately plug gaps in our skills and competencies?

Do our people have the right skills and competencies for the way we do things?

Are there conflicts between how we do our work and our organisation’s culture?

Do our people have the right mix of skills and competencies to optimise our organisation’s capabilities?

Are we long on some skills and competencies or short on others?

The skills element refers to the skills needed to deliver the strategy. Having the right skills to deliver the strategy is vital, and skills gaps can pose a risk to the achievement of objectives.

STAFF

Are the intrinsic talents of our people enhanced by our shared values?

Are there instances, anywhere in the organisation, where the talents required for success are in conflict with our shared values? (For example, if deal closure is a valued talent in the sales force, does this conflict with a shared value of customer-centricity?)

Do we have the right people in the right numbers in the right places to deliver our strategy effectively and efficiently? (For example, is our salesforce representative of the communities within which it is expected to succeed?)

Is our talent structured to achieve maximum efficiency and effectiveness?

Do we have the right diversity of talent in all the right places across our organisation?

Are there talent shortages in any parts of our organisation?

Is the organisation structured in a way that empowers our employees?

Do we have the right balance between talent and systems and processes? (For example, do our systems and processes stifle or encourage innovation?)

Given the way we do things, do we have the right diversity of talent?

Are there instances where leadership style clashes with the kind of people who work here?

Is our style/culture conducive to innovation?

Does our culture instil confidence in our employees?

The staff element comprises the intrinsic talents of the organisation’s people, the number of employees and the diversity needed in each area to optimise the organisation’s capabilities and capacity.

 
STYLE

Do leaders across the organisation exhibit our shared values in their day-to-day behaviours and leadership styles?

Is the day-to-day conduct of colleagues compatible with our shared values? (For example, do customer-facing colleagues behave in a way that is consistent with the value of customer-centricity?)

Does our strategy describe the style of working environment we aspire to?

Is the culture in our organisation conducive to the efficient and effective execution of our strategy?

Does our structure support the way we need to work to get things done? (For example, do we have siloes that hinder collegiate approaches or shared accountability?)

Is our culture conducive to an open and friendly environment?

Does our structure facilitate collaboration?

Do the systems and processes here support the way we work? (For example, are systems and processes overly prescriptive, making them likely to stifle creativity?)

Style (or culture) represents ‘the way things are done around here’. In particular, it is reflective of the ways in which leaders conduct themselves around the organisation. The leadership’s style will influence how the rest of the organisation’s people behave.

   
SYSTEMS

Are our systems and processes designed to facilitate our ability to live our core values? (For example, do we have customer systems and processes that facilitate customer-centricity or planning systems and processes that facilitate collaboration with colleagues?)

Are our systems and processes focused on the delivery of strategic objectives?

How well do our systems and processes support our structure and accountability for results?

Systems are the activities, processes and procedures that people engage in to do their work. They also include software systems, which are increasingly automating activities, processes and procedures.

     
STRUCTURE

Are our teams organised to help their members live our shared values for the benefit of our key stakeholders? (For example, are they delivering high standards of customer service and effective collaboration with colleagues?)

Is our structure aligned to our strategic objectives?

This is the hierarchy of control exercised through delegated responsibility. The structure should be as simple as possible to help people understand who is accountable for what results.

       
STRATEGY

How do our shared values deliver for key stakeholders such as customers, suppliers and colleagues?

Does our strategy explain how our shared values support our purpose?

Organisations need to compete in volatile, uncertain, complex, and ambiguous environments. Strategy needs to respond to this agilely and organisations need to constantly adapt strategies to succeed.

         
SHARED
VALUES

Shared values encapsulate the organisation’s purpose or societal mandate. The organisation’s purpose tends to remain a fundamental constant over time, which shapes the organisation’s values.

           

Template

The example questions above aim to illustrate how the elements of the McKinsey 7-S model’s interact with one another. In doing so, they are designed to help you with deploying the 7-S framework.

The framework consists of two main sets of factors: first, the ‘hard’ elements (strategy, structure and systems) that management can directly control; and second, the 'soft' elements (shared values, style, staff and skills) which managers need to influence indirectly.

The questions included in this template are examples designed to help users better understand the framework. They could also be used as starter questions for their businesses. We encourage you to modify or supplement them to better suit your own situations or, if you prefer, to change them to open-style questions.

Actions to take / Dos
  • Make the business case. A review of the organisation’s design can be unsettling for employees – so it will need the support of senior leaders.
  • Document the current organisational design.
  • Gain the support of influential people across the organisation.
  • Take an iterative approach to implementation.
  • Review each iteration to assess whether the desired impacts have been achieved.
  • Be prepared to change plans to reflect what has been learned from reviews.