Mc Kinsey 7-S Framework

7/30/2019 Mc Kinsey 7-S Framework

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ORGANIZATION

MANAGEMENT

Organizational Design


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McKinsey 7-S Model

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals


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McKinsey 7-S Model

Strategy

Structure

Systems Style

Staff

Skills

Superordinate goals

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 Ss


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McKinsey 7-S Model

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals

The soft elementsare difficult to

describe since they

are continuously

developing andchanging. They are

highly determined by

the people at work in

the organization.

The Soft Ss


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7-S ModelThe Hard Ss

Strategy Actions a company plans in response to or in anticipation of

changes in its external environment

Structure Basis for specialization and coordination, influenced

primarily by strategy and by organization size and diversity

Systems Formal and informal procedures that support the strategy

and structure (Systems are more powerful than they are

given credit)

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals


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Organizational Structure

Organization Chart

formal reporting relationships

levels in hierarchyspans of control

departmentalization

Systems to facilitate:coordination

communication

integration

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals


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Structural Designs

Functional Structure Can adapt functional structure

with horizontal linkages

Divisional Structure

Geographical Structure

Matrix Structure

Horizontal Structure /

Product Line Structure

Hybrid Structure

Chief

Accountant

Budget

Analyst

Vice PresidentFianance

Plant

Superintendent

Maintenance

Superintendent

Vice PresidentManufacturing

Training

Specialist

Benefits

Administrator

DirectorHuman Resources

CEO

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals


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Other Organizational Forms

Joint Ventures

Licensing agreements

Strategic Alliances

Consortia

Virtual organizations

Global (transnational) Work Teams

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals


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Systems various elements

Communications practice and system

Management reporting system

Approval process Planning/budgeting system

Rewards system including appraisal

Rules

Strategy

Structure

Systems

Style

Staff

Skills Superordinate goals


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From Tasks to Structure

Tasks define jobs

Jobs define skills required

Skills (and other considerations) definestaff

Over time skills change as staff gains

knowledge and experience, and as technology

and corporate infrastructure mature

Collection of jobs basis for structure

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals


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Job design considerations

Do they have the necessary skills andknowledge to fulfill proposed / expanded

job requirements?

What are the needs of the incumbent or

the rest of your workforce in general? Monetary

Growth

Socialization

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals


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7-S ModelThe Soft Ss - 1

Style / CultureThe culture of the organization, consisting of Organizational culture: the dominant values, beliefs and

norms which develop over time and become relativelyenduring features of organization life

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

Staff

Skills

Shared values /Superordinate goals

Strategy

Structure

Systems

Style

Staff



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7-S ModelThe Soft Ss - 2

Style / Culture

Staff The people/human resource management ways of shaping

basic management values, processes used to develop

managers, ways of introducing new employees andmanaging careers, socialization processes

Skills Distinctive competencies what the company does best,

ways of developing or shifting competencies

Shared values / Superordinate goals Guiding concepts, fundamental ideas around which a

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

Strategy

Structure

Systems

Style

Staff



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Organizational Culture

Culture is to organizations whatpersonality is to individuals

All companies have cultures

Culture by default

Culture by design thoughtful choices

based on values and core beliefs

How does a company consciously createits culture?

Strategy

Structure

Systems

Style

Staff



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From Gray & Larson Project Management:

The Managerial Process


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Types of Organizational Cultures

Control culturesDrive for predictability and order

Collaboration cultures

Pursue close relationship with customers

Competence culturesPursue excellence and innovation

Cultivation culturesPursue life enrichment for customers and employees

Strategy Structure

Systems

Style

Staff

Skills

Superordinate goals


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Organizational Culture

Observable Evidence: Symbols

Ceremonies

Stories

Behaviors

Language

Dress

Underlying Roots: Values, Assumptions, Beliefs, Attitudes, Feelings

Strategy

Structure

Systems

Style

Staff



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Culture in practice

Conflict management Relationship or interpersonal conflict

Task / process conflict

Functional vs. dysfunctional conflict

Factors: goal incompatibility, limited resources,differences

Powerthe capacity to influence behavior Positional power: rewards/consequences, control

of resources, information and decision control Personal power: expert, referent (based on

identification and admiration)

Politics the use of power to influence decisions

Strategy

Structure

Systems

Style

Staff

Skills

Superordinate goals


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Planning & vs. Setting thebudgeting direction

Organizing & vs. Aligning peoplestaffing

Controlling & vs. Motivating people

problem solving

Management vs. Leadership

Management is about coping with complexity

Leadership is about coping with change


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Management vs. Leadership

Some managers (but not all) are leaders

Some leaders (but not all) are good managers

A manager gets work done through the efforts

of other people Includes planning, organizing, motivating, and

controlling

A leader creates and realizes a vision

Communicates that vision and moves the

organization toward that vision Strategy Structure

Systems

Style

Staff

Skills

Superordinate goals


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McKinsey 7-S Model

Strategy

Structure

Systems Style

Staff


Effective organizations

achieve a harmony

between these sevenelements; if one

element changes, then

this will affect all the

others


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McKinsey 7-S Model

The 7-S Model can be avaluable tool to initiatechange processes andto give them direction;i.e. determine currentstate and ideal state ofeach element, and

develop action plans toclose the gaps

Strategy

Structure

Systems Style

Staff



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McKinsey 7-S Model

In change processes,

many organizations

focus their efforts on

the hard Ss; however,the soft factors can

make or break a

successful change

process. All factors

must be accounted for.

Strategy

Structure

Systems Style

Staff



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McKinsey 7-S Model

Interrelated

Equilibrium

Foundation of

corporate culture

Levers available to

management

Strategy

Structure

Systems Style

Staff



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Executing Change

Seven Key Considerations Strategic Intent

Substance

Scale

Scope/Breadth

Speed

Sequence Style

Style

Scope Substance

Speed

Sequence

Scale

Strategic

Intent


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Strategic Intent

Substance

Scale

Scope/Breadth

Speed

Sequence

Style

Style

Scope Substance

Speed

Sequence

Scale

StrategicIntent

Precise Broad

Soft Ss Hard Ss

Small Large

Isolated Organization-wide

Slow Fast

Hard Soft Soft Hard

Top Down Bottom Up

Documents

Mc Kinsey 7-S Framework