Any good business owner knows that there is always room for growth and improvement. But how can you as a business owner see the bigger picture? How can you view your company or team as a whole and recognize the areas that need improving? You need to be able to see how the different aspects of your business work together, and the McKinsey 7 S Model is a great way to do so.
The McKinsey 7 S Model is a tool to help you analyze your business or organization to determine if it is set up to succeed in its current state and then use what you glean from the process to learn and better align your organization to your goals and objectives.
Developed in the 1980’s by Tom Peters and Robert Waterman of McKinsey & Company, this model can be applied to the company as a whole all the way down to a small team within a department.
So, here’s how it works. There are seven elements of this model, divided into two groups, hard and soft. Hard elements are those that can indeed be defined or identified and easily changed or influenced by management. Soft elements are often more difficult to describe and are influenced more by culture. These elements are more important than hard ones if the company or organization wants to be successful.
The seven elements are as follows:
Strategy: A plan created to support and construct improvements and gain superiority over the competition.
Structure: the way an organization or business is organized, including the hierarchy of positions and communications.
Systems: the defined day-to-day procedures that staff carry out to effectively and efficiently do their jobs.
Shared Values: originally called “superordinate goals,” are the core values of the organization that are reflected in the organization’s structure, strategy, and systems.
Style: the style of leadership adopted.
Staff: the employees and their general assignments.
Skills: the actual skills and knowledge of the employees working for the organization.
For an organization to perform to the best of its abilities, these seven elements must work in harmony together. The 7 S Model helps to identify strong and weak points, which allows for growth and improvement. It can help guide organizations in identifying the kinds of questions it needs to be asking and answering for it to know how to best move forward and improve from Point A to Point B.
This model is also ideal to consult whenever an organization is undergoing any kind of change. By checking in and keeping tabs on where the organization stands with each S during the change, you can ensure that things continue to run smoothly and effectively.
I have created a worksheet for you to use to evaluate where you and your business stand and identify what needs improving or tweaking.
After identifying the specifics of each S for your business it is time to evaluate where they each stand in relation to one another. Here are some basic guidelines to help you do so:
You should start with your Shared Values, compare them to the first three (hard) elements. Do they support one another? Are they consistent? If not identify what changes should be implemented.
Then, take a look at the first three elements on their own. Do they support each other?
Now, look at the last four (soft) elements. Do they support the first three? Do they support each other?
In just those three simple steps you will be able to determine the relationships between all seven S’s. By answering the questions within the worksheet, you can find the shortcomings and inconsistencies that are preventing your seven elements from fully connecting to one another and creating a strong organization.
After determining where your organization stands within the 7 S Model, you will next need to determine what you think the optimal organizational design for your business should be. Figure out what your organization should look like to meet this new standard, and then determine a way to achieve it.
Making the necessary changes is a one step at a time process. You will need to make a change or two, give yourself and your organization time to adjust, and then re-analyzed to see if further improvements need to be made. In the end, the goal is to end up with better performance, and a more cohesive organization that supports itself from the inside out.
In short, the simple process behind the 7 S model is as follows:
1 – Identify the areas or seven S’s that are not effectively aligned.
2 – Determine your optimal organization design.
3 – Decide where, what, and how the necessary changes should be made.
4 – Make the necessary changes.
5 – Repeat!
The 7 S Model is indeed a helpful tool in keeping tabs on your business as a whole in a more simplified process. Once you get the ball rolling it is easy to maintain and check back with as you deem necessary. As you continue to use this tool, your business will continue to grow stronger, and your organization will only get better and better.