So you want to carry out some analysis and work out if your business is set up in the best way to achieve its intended output.
There are a number of different ways of doing this but the McKinsey 7s has good pedigree and endured the test of time.
Background for those geeks like me:
“The McKinsey 7S Framework is a management model developed by well-known business consultants Robert H. Waterman, Jr. and Tom Peters (who also developed the MBWA– “Management By Walking Around” motif, and authored In Search of Excellence) in the 1980s.”
The model can be utilised to understand a number of different outputs.
- Improve company performance.
- Look at the likely effects of changes within a company.
- Alignment across departments, processes
- Determine the viability of a strategy and how best to implement it.
- The method can be used to define alignment no matter the size, it could be a team or a project that needs have its scope understood.
The tool is also very useful when trying to understand the Target Operating Model (TOM) of a business.
The model looks at seven elements that interdependent. These are categorised into “Hard” and “Soft”.
“Hard” are the easiest of the two elements to identify, define and they can be influence by management directly.
“Soft” are more difficult to define. They are less tangible and sometimes ambiguous in nature, also are more likely to influenced by culture. These shouldn’t be thought less of as they are as important as the hard ones and need to be understood in order to make the business successful.
In Figure 1 the model shows the independencies how change can have an impact on each other. This is important to understand the possible impacts that could occur.
- Strategy: the plan devised to maintain and build competitive advantage over the competition and lead the market.
- Structure: the way the organization is structured to be able to deliver what the customer needs.
- Systems: the daily activities and procedures (Manual and Automated) that are required to deliver the output required as effectively and efficiently as possible.
- Shared Values: also known as “superordinate goals” when the model was first developed, these define the core values of the company that are evidenced in the culture and the ethics of the business.
- Style: the style of leadership and approach that will be adopted.
- Staff: One of your biggest assets the employees and their general capabilities.
- Skills: the actual skills and competencies of the employee/s working for the company.
By placing the shared values in the middle of the model it puts and emphasise on the core values and ethics of the business and how all the other elements of the model should be approached. The strategy, structure, systems, style, staff and skills all stem from this element which helps to define what the company was created to do.
In the original model released in 1982 the system element was defined as soft but in modern times this is a bit of blurred line and as more and more systems become automated through technology this naturally moved to a hard element.
So how the bloody nora do I use it?
So McKinsey’s theory in the model is based on all the seven elements being aligned and mutually reinforcing each other. So if one of the elements is out of alignment it can be identified and action can be taken to improve through change and transformation which will help it move back into alignment. This will have should have a positive impact on the performance of the overall business due the independencies that exist between the elements.
No matter what change and transformation occurs whether it is restructuring of departments, teams or the whole organisation. Changes or new systems and process. New leaders or mergers etc. the model can be utilised to define a understanding of how the elements will be impacted by the changes through the interdependencies.
It can be used to help define the Target Operating Model (TOM) of a business when going through major changes and transformations or even just trying to understand why a team or project is not delivering the expected outcome. It’s not easy but it’s really worth the effort it provides a solid framework which can be the backbone to help your business to be more agile in your approach to change. The more you understand the seven elements the easier it is to implement change effectively within an organisation.
Personally I see the interdependencies as an opportunity to make sure that there is effective lines of communication between the elements. The more informed the organisation is, the more effectively it can understand what needs to happen to achieve success in everything it does.
Good luck with your analysis and hopefully this has help break down the tool for you.