McKinsey's 7S Model

IntroductionO First appeared in “ The Art of Japanese Management”

– Richard Pascale & Anthony Athos , 1981

O Tom Peters & Robert Waterman – what made a company successful

O These four authors met and 7S model was born

O Appeared in the book “In Search of Excellence”- Taken up as a basic tool by the global management consultancy Mc Kinsey

O Analyses organizations and their effectiveness

O Considers company as a whole – organization's problems diagnosed and a strategy may be developed and implemented

What is the 7-S Framework

O It is a management model that describes 7 factors to organize a company in an holistic and effective way.

O Together these factors determine the way in which a corporation operates. Managers should take into account all seven of these factors, to be sure of successful implementation of a strategy. Large or small.

O They're all interdependent, so if you fail to pay proper attention to one of them, this may effect all others as well. On top of that, the relative importance of each factor may vary over time

McKinsey’s 7s Model

McKinsey’s 7-S Model

O StrategyO StructureO SystemsO StyleO StaffO SkillsO Shared Values

The hard elements are factual and easy to identify. They can be found in strategy statements, corporate plans, organization charts, and other documentation

The Hard S’s

McKinsey 7-S Model

O StrategyO StructureO SystemsO StyleO StaffO SkillsO Shared Values

The soft elements are difficult to describe since they are continuously developing and changing. They are highly determined by the people at work in the organization.

The Soft S’s

7-S Model – The Hard S’sO Strategy

O Actions a company plans in response to or in anticipation of changes in its external environment

O StructureO Basis for specialization and coordination,

influenced primarily by strategy and by organization size and diversity

O SystemsO Formal and informal procedures that support the

strategy and structure (Systems are more powerful than they are given credit)

7-S Model – The Soft S’s - 1O Style / Culture

The culture of the organization, consisting ofO Organizational culture: the dominant values, beliefs

and norms which develop over time and become relatively enduring features of organization life

O Management style: what managers do rather than what they say (where they spend their time and attention, what they allow, what they reward, etc)

O Staff

O Skills

O Shared values

7-S Model – The Soft S’s - 2O Style / Culture

O Staff O The people/human resource management – ways of

shaping basic management values, processes used to develop managers, ways of introducing new employees and managing careers, socialization processes

O SkillsO Distinctive competencies – what the company does best,

ways of developing or shifting competencies

O Shared valuesO Guiding concepts, fundamental ideas around which a

business is built – simple, usually stated at abstract level, have great meaning inside the organization, although outsiders may not see or understand them

Benefits of the Model

Ø Improves the performance of a company

Ø Examines the likely effects of future changes within a company

Ø Align departments & processes during a merger or acquisition

Ø Determines how best to implement a proposed strategy

Drawbacks

Ø The external environment is not mentioned in the McKinsey 7S Framework, although the other variables do exist & that only the most crucial variables are depicted in the model.

Ø The notion of performance or effectiveness is not made explicit in the model.

How to use the model?

Ø The model can be used for any type of changeØ RestructuringØ Organizational measuresØ Change of leadership, etc.

Ø Can be used to analyze current situation, a proposed situation and to identify gaps and inconsistencies between them

ØHOW ?

Implementation by Infosys

ØShared ValuesØ Customer delightØ Leadership by exampleØ Integrity and transparencyØ Pursuit of excellenceØ Fairness

Ø StrategyØ Client focused strategyØ Emphasis on custom built software according to

client requirementsØ Commands premium marginsØ Increase business form existing and new clientsØ Expand geographically

Implementation by Infosys

ØStructureØ Free form organization devoid of hierarchiesØ Constitution of teams based on flexibility

ØSkillsØ Eligibility criteria made mandatory for appraisalØ Entry into Balanced scorecard hall of Fame for

Executing Strategy for achieving breakthrough performance

Implementation by Infosys

Ø StyleØ To develop leadership qualities in their employeesØ Emphasis on –

Ø Open door PolicyØ Continuous Sharing of informationØ Takes input from employees in decision makingØ Build personal rapport with employees

Ø StaffØ Selecting candidates who have superior academic

records, technical skills and high level of learn ability

Ø Emphasis on T&D of employees

Conclusion

Ø It’s a Value Based management (VBM) that describes how one can holistically and effectively organize a company.

Thank You …