What Is the McKinsey 7s Model?

Posted By: Lucidchart Content Team

“Without change, something sleeps inside us, and seldom awakens. The sleeper must awaken.” These
words, spoken by Duke Leto Atreides in the 1984 movie Dune, tell us that, to be successful, change is
needed.

For your business to grow, you must embrace change. But, you need to make sure that the change
makes sense, will help you achieve your goals, and will be embraced by all employees.

In the late ’70s, Thomas J. Peters and Robert H. Waterman, consultants from the McKinsey consulting
firm, developed what is known as the McKinsey 7s model. This model is a framework to help you assess
seven key elements of your business that need to change or be aligned in order to be successful.

In this article, we will discuss the McKinsey 7s framework and show how to use this model. We will also
give you ideas about how to make the model accessible to everybody involved for effective
collaboration.

McKinsey 7S Framework

McKinsey 7S Framework (Click on image to modify online)

7 elements of the McKinsey 7s model

The basic premise of 7s management is that there are seven internal elements of an organization that
need to be aligned so it can be successful. These seven elements are categorized as “hard” or “soft.”

Hard elements

The hard elements are tangible, easy to identify, and easier for management to immediately influence,
such as strategy statements, corporate plans, organizational charts, and other documents.

Strategy: your company’s plan to enhance competitive advantage

Structure: how your company is organized and who reports to whom

Systems: procedures, processes, and routines of staff that characterize how the job is done

Soft elements

These elements are more difficult to describe because staff capabilities, corporate values, and culture
are continuously developing and changing.

Shared values: the core values that are reflected in the corporate culture and individual work ethic
Style: typical behavior patterns of groups such as managers and other professionals

Staff: your company’s employees and their general capabilities

Skills: the organization’s core competencies and distinctive capabilities

The model diagram represents the interdependency of all seven elements. Shared values are placed in
the middle of the model to emphasize that they are central to the development of all the other critical
elements. The ideas behind why the organization was created will influence the other six elements.

Use a Lucidchart template to create a web-based 7s management model that you can use to collaborate
with others as you realign goals and work through organizational changes.

How do you use the McKinsey 7s model?

The interdependency of this strategy development framework means that if one element changes, you
will have to address the other six elements to analyze how the change affects them and to determine
how each may need to change to keep organizational goals aligned.

Business uses of the McKinsey framework include:

Determining how your business will achieve targets and goals

Boosting productivity and performance

Putting a proposed strategy into effect

Facilitating the complexities of aligning departments and processes during mergers or acquisitions

Examining the effects of organizational changes within the company

Implementing policies to improve employee skills and competency

The 7s model can be used when organizational design and effectiveness are at question. It can help all
stakeholders to work towards agreement when there are differing opinions about how the seven
elements should be aligned.

The following steps should help you as you implement this tool.

Step 1: Identify areas that need to be aligned

Analyze each of the seven elements to determine if they are effectively aligned with the others. For
example, if you designed a strategy that relies on quick product introduction, but you use a matrix
structure with conflicting relationships that hinders an agile work environment, there’s a conflict that
requires the change in strategy or structure.
To perform a 7s analysis, answer these questions:

Strategy

What is your company’s goal?

How will resources be used to accomplish that goal?

What is unique about your company?

How do you adapt to changing market conditions?

Structure

How is the company organized?

How are decisions made?

How do employees align themselves to the company strategy?

How is information shared?

Systems

What financial systems are in place for resource acquisition?

What systems are in place for recruiting, promotion, and performance appraisal?

What processes, procedures, and routines are in place to get work done?

Shared values

What are the values upon which the organization was built?

How do the values play out in daily life?

Style

What is the leadership style?

How do employees respond to management?

Do employees function competitively, collaboratively, or cooperatively?

Are there teams or silos?

Is the current number of employees enough to accomplish goals?

Are there staffing needs?

Are there gaps in required capabilities or resources?

Skills

What skills do employees have to deliver core products and services?

Are the current skills of your employees sufficient?

What does the organization do well?

How are skills monitored, assessed, and improved?

After you have answered these questions, analyze the data and look for alignment, consistency,
conflicts, gaps, strengths, and weaknesses.

Step 2: Determine your optimal organizational design

When you can determine the organizational design that is most effective for you, it makes it much easier
to set goals and make action plans. To help you find your optimal design, you may want to look at your
competition and other departments within your company to see what is working for them.

Use Lucidchart to create documents that can help you hone in on the design that will most efficient for
you. Lucidchart documents are web-based and can be accessed from anywhere at any time, allowing for
true cross-team collaboration.

change management chart

Change Management Chart (Click on image to modify online)

Step 3: Decide what needs to change

In this step, you will create an action plan that details the areas that need to be realigned and the steps
you need to take to achieve those realignments. For example, if the management style of some of your
managers does not align with your company’s values, you’ll need to decide what changes need to be
made: Will you need to remove a layer of management, reorganize reporting hierarchies, or simply
influence managers to change their style so operations will work more efficiently?
Using data you have collected from previous organizational changes and from analyzing how your
competitors have successfully implemented change in the past, build a flowchart to visually outline your
change process. Your flowchart should include a representation of procedures and processes as they are
now and how you want them to change in the future.

An easily accessible flowchart lets you and your team analyze strengths and weaknesses and collaborate
as you propose future changes. By supporting real-time collaboration, Lucidchart allows for greater buy-
in from employees and leadership.

business process flow template

Business Process Flow Template (Click on image to modify online)

Step 4: Implement the changes

After you have decided on the changes that need to be made and have complete buy-in from everybody
involved, you’ll need to implement the changes. Only changes that are implemented correctly will have
a positive impact on your business. Find people in your organization or bring in consultants who have
experience in implementing changes smoothly.

When there are a lot of changes that need to be made, it may be a good idea to implement them slowly
in phases so that the organization is not too overwhelmed all at once. To do this, you should use
Lucidchart to visually map out an implementation plan.

Step 5: Review the seven elements in your strategy development framework

The McKinsey 7s model is dynamic and should change often to as you look for ways to be more efficient
and grow your business. Return to the model often to review the elements to realign as needed.
Because changing one element always has an effect on the other elements in the model, it is very
important that you continually review and adapt so you that you don’t stagnate and lose market share.

For example, as your company grows, you may need to expand to other regions in the country or the
world. Use the 7s model to determine how these satellite sites will align with your goals and values. Will
these regional locations be marketing, manufacturing, development, or sales sites?

As you work through different scenarios and change proposals, make sure you work with Lucidchart to
create the visual charts and diagrams you will need to help people in your organization quickly assess
and digest new information.