Mckinsey 7S Model

Definition

The McKinsey 7S Model is a framework for organizational effectiveness, positing that an organization must align and strengthen seven internal elements to achieve success. These elements are Strategy, Structure, Systems, Shared Values, Skills, Staff, and Style.

Origin

The McKinsey 7S Model was introduced by McKinsey & Company in the early 1980s, developed by Tom Peters and Robert Waterman. The model aims to help businesses identify and analyze internal factors during change management to enhance organizational effectiveness.

Categories and Features

The seven elements of the McKinsey 7S Model are divided into hard and soft elements. Hard elements include Strategy, Structure, and Systems, which are typically within the direct control of the company. Soft elements include Shared Values, Skills, Staff, and Style, which are more difficult to quantify and change but have a profound impact on organizational culture and effectiveness. By aligning these elements, companies can achieve higher efficiency and adaptability.

Case Studies

Case 1: IBM faced significant challenges in the early 1990s and used the 7S model to reassess its strategy and structure, successfully transforming into a service-oriented company. Case 2: Procter & Gamble, during its global expansion, adjusted its systems and staffing to ensure its global strategy aligned with local market needs, successfully increasing its market share.

Common Issues

Common issues investors face when applying the McKinsey 7S Model include accurately assessing the impact of soft elements and maintaining alignment of all elements during change. A common misconception is that all elements can be quickly changed, whereas adjustments to soft elements require time and patience.