McKinsey 7S Framework

3 Key excerpts on "McKinsey 7S Framework"

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  Strategic management process 2, The

  A South African perspective

  • Lazenby, K(Authors)
  • 2018(Publication Date)
  • Van Schaik Publishers

    (Publisher)

  This model was developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm. The basic premise of the model is that there are seven internal aspects of an organisation that need to be aligned if the organisation is to be successful. This model can be used in a wide variety of situations where an alignment perspective is useful in improving the performance of the organisation and when determining how best to implement the strategy. The McKinsey 7S model involves seven interdependent factors, which can be categorised as either “hard” or “soft” elements. The “hard” elements are strategy, structure and systems, and management of these can directly influence the organisational design, the reporting lines, formal processes and the IT systems. The “soft” elements are shared values, skills, style and staff. They are less tangible and more influenced by culture. However, they are as important as the hard elements if the organisation is going to be successful.

  Although there is not really a design sequence in this model, the starting point is the strategy. Strategy drives organisational structure and must fit the culture in the organisation. Culture is based on the shared values and is especially influenced by the style of leadership. The systems will be determined through, and influenced by, the organisation’s structure. Structure and systems will define what staff and skills are required. The seven components can thus be described very briefly as follows:

  1. Strategy: the plan devised to maintain and build competitive advantage
  2. Structure: indicates the way the organisation is structured and who reports to whom
  3. Systems: involve the daily activities and procedures (e.g. IT systems) that staff members engage in to get the job done 366

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  Entrepreneurship and Innovation Education

  Frameworks and Tools

  • Marcos Lima(Author)
  • 2020(Publication Date)
  • Wiley-ISTE

    (Publisher)

  If a business student were asked to describe a complex organization, such as Apple Inc., he or she might be tempted to talk about well-known, trivial aspects of that iconic company, such as its location in California, its product line, its brand reputation and its charismatic founder and historic CEO Steve Jobs. Usually, though, students quickly run out of elements to describe Apple or any other organization, even ones they are very much familiar with, like their own business school or the firm where they are doing their internship. The reason for such lack of depth is that the human mind tends to focus on only a few aspects of any problem at any given time. Hence, frameworks play such an important role in business learning. As we have seen throughout this book, a framework can be simply defined as a “checklist” for thinking (Lima and Fabiani 2014).

  Consider, for example, organizational analysis frameworks. If we break down the above question with the help of a classic framework, such as McKinsey’s 7S model (structure, strategy, systems, staff, skills, style and shared values), a student will be able to ask more specific questions, such as “What is Apple’s strategy in the smartphone market?” or “How does Apple use its structure to incentivize creativity among its engineers?” or “What are some of Apple’s staff recruiting criteria?” These framework-based questions are a meaningful guide to understanding the complexity of organizations as they grow.

  6.1. An overview of management systems

  Before discussing how innovative organizations can use the 7S framework for knowledge management, it is convenient to recall the basic definitions of management in general and innovation management in particular. A question that even advanced students sometimes struggle to thoroughly answer is, how can we define any type of management process – project management, knowledge management, innovation management etc.? While some of their answers capture some of the aspects of management, students rarely have a systemic view of the management process. Based on the classic PDCA cycle or “Deming Wheel”, Figure 6.1 illustrates the key elements of a simple management system.

  The PDCA principles are nothing new. In fact, they can be traced back all the way to the creation of the Scientific Method by Francis Bacon in the 17th Century, whose “hypothesize–experiment–evaluate” process is very similar. What makes management a particular “science” is that it consists of planning, allocating and controlling a very particular set of resources

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  The Capstone Encyclopaedia of Business

  The Most Up-To-Date and Accessible Guide to Business Ever

  • (Author)
  • 2013(Publication Date)
  • Capstone

    (Publisher)

  Developed around 1980 by two business school academics – Anthony Athos and Richard Pascale – and a group of consultants at McKinsey & Co. (including Tom Peters and Robert Waterman), it provides a useful checklist for thinking about what makes a busi-ness tick. It advocates examination in seven basic areas: strategy, structure, systems, style, skills, staff and shared values. The Seven S model was neatly alliterative, accessible, understandable and, with its logo (later named ‘the happy atom’), highly market-able. Managers seemed to like it. The Seven S model was a business theory to fit all occasions which fitted onto a single page. Pascale and Athos introduced the Seven S model to a mass audience in The Art of Japanese Management , published in 1981. Peters and Waterman also featured the framework in Search of Excellence when it was published a year later – despite the fact that Tom Peters initially thought the Seven S framework was ‘corny’. 394 The Capstone Encyclopaedia of Business The attraction of the Seven S model is that it is memorable and simple. The framework is a model of how organizations achieve success. Inevitably, a model that simplifies something as complex as organizational behaviour is open to abuse, misin-terpretation and criticism. Yet, although Japanese management techniques have fallen off their ped-estal and the cult of ‘excellence’ started by Peters and Waterman seems finally to have run its course, it’s easy to forget how influential the ideas behind both of these phenomena were. For the first time, the Seven S framework enabled meaningful compari-sons between companies from completely different sectors, national cultures and histories. As a way to cover the basics, it remains a useful concept. Key text • Thomas J. Peters and Robert H. Waterman. In Search of Excellence . Harper & Row, 1982 • Richard Pascale and Anthony Athos.

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