Would you know if your company was prepared to achieve its defined objectives?
What dimensions determine a company’s ability to successfully implement change?
The McKinsey & Company 7-S framework was developed in the late 1970s by Tom Peters and Robert Waterman, and although organizational effectiveness models go in and out of fashion, the McKinsey 7-S structure has stood the test of time.
In it Peters and Waterman identify seven dimensions of a company that need to be aligned for it to be successful. These dimensions are strategy, structure, systems, skills, staff, style and shared values, as illustrated in Figure 1.
- Strategy: this is the company’s plan to develop and maintain a competitive advantage over competitors.
- Structure: the way the company is organized, i.e., how units and teams are structured, including authority and responsibility.
- Systems: activities and procedures performed by employees to do their work.
- Skills: the skills and competencies of the company’s employees.
- Staff: the employees who carry out the activities.
- Style: the leadership system adopted in the company, and the collaborative culture.
- Shared values: the company’s core values, as expressed in its corporate culture and general work ethic. It illustrates the company’s purpose.
Among the advantages of using the model are: it is comprehensive, it improves organizational effectiveness, it assists in the alignment of units with processes, it facilitates the implementation of strategies, it allows you to analyze the impact of organizational change, and it aligns academic research and managerial practice.
You can use the 7-S model in a wide variety of situations, in which it is important to assess how the various parts of the company work together. For example, it can help you improve company performance, or determine the best way to implement your developed strategy.
The model can also be used to examine the likely effects of future changes in the organization, or to align departments and processes during a merger or acquisition. You can also apply the McKinsey 7-S model to elements of a team or project.