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Frameworks, Methods & Contexts
FMC Toolkit
© K.E. Homa
Proprietary Material
Professor Ken HomaGeorgetown University
The 7S+2 FrameworkMcKinsey’s 7S’s plus 2 more
WorldMacro
IndustryMeso
CompanyMicro
Situation Analysis
The McKinsey 7S Framework is a useful structure for initial company level analysis.
A starting point for most cases is a situation analysis that is typically done at 3 levels ...
Let’s start with some history …
McKinsey 7-S Framework
• A classic, dating back to late 1970’s *
• Original intent: analytical and reportingframework for organizational design studies
• Breakthrough thought: “organization” is more than structure (i.e. who reports to who) and defined roles and responsibilities
• Specifically, identified 7 organizational elements that must be synchronized …
Background
* Original article “Structure is Not Organization”
Superordinate Goals (mission, goals, metrics)
Strategy (corporate, business, product / market)
Skills (competencies – unique, generic )
Staff (depth, bandwidth, empowerment)
Style (culture, leadership, buy-in)
Systems (processes - formal & informal)
Structure (fixed or virtual, alliances)
The Original Formulation
McKinsey 7-S Framework
: “Structure is Not Organization”, Waterman, Peters & Phillips, Business Horizons, 23,3 June 1980.
McKinsey 7-S Framework“Shape of the diagram is significant …”
• Multiplicity of factors, interconnectedness
• Importance of execution & “soft” variables
• No starting point or implied hierarchy.
“ A priori, it isn't obvious which of the seven factors will be the driving force in changing a particular organization at a particular point in time.
In some cases, the critical variable might be strategy. In others, it could be systems or structure.”
• Sometimes strategy drives organization, sometimes organization drives (or limits) strategy.
McKinsey 7-S FrameworkAccording to co-author Tom Peters* …
Shared Values
The only significant alteration was “Superordinate Goals" morphing into “Shared Values“ … intended to capture the essence of an organization’s corporate culture.
A Brief History of the McKinsey 7-S Model
McKinsey 7-S FrameworkSome users distinguish between “hard”
and people-oriented “soft” S’s …
Hard
Soft
More specifically …
McKinsey 7-S FrameworkSome users distinguish between “hard”
and people-oriented “soft” S’s …
Click to view a 5 minute video on the 7-S Framework
McKinsey 7-S FrameworkFor a quick recap of current thinking …
With due respect to McKinsey’s thinking, let’s make a couple of changes to the classic 7-S framework and extend it …
First, the classic framework treats all 7 S’s as being concurrently inter-connected … that is, all of the S’s are created equal with respect to sequence and causality.
Specifically, Peters says that Strategy sometimes drives the other S’s … and sometimes, the other organizational S’s drive (or constrain) Strategy.
Using a sports analogy, you can create an offensive game plan geared to your existing players or you can acquire players that fit your desired game plan.
The former (tailor the game plan to the players) is a short-run approach; the latter (building a team to execute the plan) is a longer-run approach
McKinsey 7-S FrameworkAbout the ‘S’ is for Strategy …
Since Strategy is a longer-run game, it makes sense to pull the Strategy S out of the “all equal” pack … treating it as the long-run driving force that it is.
McKinsey 7-S FrameworkAbout the ‘S’ is for Strategy …
SkillsCore Comps
SystemsProcesses
StructureRoles & Resp.
StyleCulture
StaffPeople
Strategy
SharedValues
McKinsey 7-S Framework *
* Adapted by K.E. Homa
Adapted from the McKinsey 7-S Framework
Next, let’s resurrect one of the classic* S’s -- Superordinate Goals (SOGs) –and add it as an 8th ‘S’ … think, mission, strategic goals, operating objectives
* Note: Originally, “Superordinate Goals” was one of the 7 S’s… Over time, SOGs morphed to the softer “Shared Values”
McKinsey 7-S FrameworkAbout the ‘S’ is for Superordinate Goals …
SkillsCore Comps
SystemsProcesses
StructureRoles & Resp.
StyleCulture
StaffPeople
Strategy
SOGsSuperordinate
Goals
SharedValues
McKinsey 7-S Frameworkplus SOGs *
* Adapted by K.E. Homa
Adapted from the McKinsey 7-S Framework
Finally, let’s add an ‘S’ is for “Scorecard” to explicitly consider performance and results, and close the loop against objectives …
How did McKinsey miss that one ?
McKinsey 7-S FrameworkHow about an ‘S’ is for Scorecard?
SkillsCore Comps
SystemsProcesses
StructureRoles & Resp.
StyleCulture
StaffPeople
Strategy
SOGsSuperordinate
Goals
ScorecardPerformance
SharedValues
McKinsey 7-S Frameworkplus SOGs & Scorecard*
* Adapted by K.E. Homa
We’ll refer to the modified framework as the McKinsey 7S+2 Framework …
SkillsCore Comps
SystemsProcesses
StructureRoles & Resp.
StyleCulture
StaffPeople
Strategy
SOGsSuperordinate
Goals
ScorecardPerformance
SharedValues
McKinsey 7S + 2 Framework
* Adapted by K.E. Homa
Question: how to use this (or any) framework in initial fact-gathering?
Frameworks and fact-gathering …
• Frameworks codify prior work & thinkingTip: Don’t reinvent wheels … leverage prior work
• Typically, frameworks are summary level end-products,i.e. simplified representations that recap main ideas
• For data gathering, just transform a framework into a template that can be used for recording findings
• Bottom line: Templates derived from frameworks can be efficient data gathering tools
– Synchronized to end product– Consideration of all factors– Appropriate “level of abstraction”
For example, here’s what the 7S+2 Framework looks like as a data recording template…
McKinsey 7S+2 FrameworkData Gathering Template
Staff
Systems
Structure
Style
Skills
Strategy
SuperordinateGoals (SOGs)
Scorecard
Shared Values
McKinsey 7S+2 FrameworkData Gathering Template
Staff
Systems
Structure
Style
Skills
Strategy
SuperordinateGoals (SOGs)
Scorecard
Shared Values
• Summarize conclusions for each of the S’s
• Identify any S’s that seem out-of-sync
• Dive deep on the most pivotal S’s
McKinsey 7-S FrameworkTakeaways
• An enduring, classical framework
• Key idea: “Structure is not organization”… there are 7 inter-connected S’s
• For ‘7S +2’: Strategy elevated as a driver, hard Superordinate Goals resurrected, and Scorecard added for closure.
• Valuable tool for diagnosing and designing organizations … and for initial fact-gathering when doing a situation analysis.
Frameworks, Methods & Contexts
FMC Toolkit
© K.E. Homa
Proprietary Material
Professor Ken HomaGeorgetown University
The 7S+2 FrameworkMcKinsey’s 7S’s plus 2 more