Why is the McKinsey 7S model useful?

You might find this model particularly helpful if you are aiming to improve business performance, identify the best way to implement a new strategy, handle business mergers, reorganise your business structure, or implement any other future changes relating to the overall picture of your company’s organisation. 

The McKinsey 7S model can help you make key decisions about these future changes, as it can provide indications as to their impacts. That way, you can consider whether these changes will likely be successful or not.

What is the structure of the McKinsey 7S model?

The McKinsey 7S model involves both ‘hard’ Ss and ‘soft’ Ss, which represent different interconnected elements of your business’s organisational structure. Below, we will look at each element, as well as how it relates to the overall model. 

‘Hard’ S elements

Firstly, let’s take a look at what the ‘hard’ S elements are first. These elements are comparatively tangible, quantifiable, and easy to define compared to ‘soft’ S elements, which are less easily definable and quantifiable. The hard ‘S’ elements are:

• Structure
• Strategy
• Systems.

Structure

The ‘structure’ element of your model encompasses the chain of command within your organisation. It assesses who is accountable for different parts of the workflow within the chain, as well as whom each team player reports to. The structure of your business also includes the segmenting of your team into different departments.

Strategy

The ‘strategy’ element is your business’s plan, which includes your unique value proposition, and the advantage that you currently maintain over your competitors. Your strategy therefore involves how you aim to tap into your customer’s needs, and how your employees provide this service on a day-to-day and long-term basis. Your strategy is usually built around your company’s mission and values. 

Systems

‘Systems’ are your company’s overall infrastructure. Therefore, this element includes your workflows and the procedures your employees need to follow in order to complete their daily responsibilities. They crucially help you to achieve the objectives set out by your company.

‘Soft’ S elements

Less easily definable but just as essential as the ‘hard’ S elements in the McKinsey 7S model, these five elements make up the remaining parts of this model. 

Skills

These are the skills that your staff need in order to achieve their tasks. Different staff across your hierarchy will require different abilities in order to meet their objectives, and the overall needs of your business. For instance, a computer programmer in your business usually needs quite different hard skills to those of a social media manager; both contribute to the smooth running of an app company that requires someone to design the app, but also promote it via social media. 

Staff

This encompasses your staffing, including the quantity of staff you have, where they are based, their level of flexibility and their overall competencies or skills gaps. What your team(s) will look like will depend on your specific business needs.

Style

Style essentially means the leadership approach that your senior management takes in managing your team(s). This can also include your company policies and code of conduct rules for your employees.

Shared values

This element encompasses your organisation’s core values, as well as your company’s mission statement. Shared values describe the approach your business takes within the industry, including work ethic and your business objectives. 

How these elements interrelate

These elements don’t stand alone; they work holistically, but are considered ‘hard’ elements as they’re easily definable on their own. Let’s look at a few examples so you can better picture how they come together. 

Your systems – your company’s procedures – usually need to be understood by everyone in your team. This means that your systems need to work together with your organisational structure – each individual responsible for a different part of your workflow will have different procedural responsibilities. 

Ideally, your employees are able to identify the role they play in your business, and what they’ll need to do in order to contribute to the day-to-day running of your business. By understanding your business’s shared values, your employees know the image that your company is looking to project to customers when they complete their duties.

To achieve harmony between your systems and structure elements, you might provide your employees with IT system manuals stored on the Cloud so that they can access them at any point. Perhaps you allow your employees to read these manuals in their own time, but plan to test their knowledge; this is your leadership style. 

If your systems get updated, then your employees will have undergone the right training to use them. Your employees have the skills they need in order to follow these instructions. 

Your strategy feeds into these other elements by providing daily, weekly, or monthly objectives that are achievable via your current workflow. Each employee understands their role in achieving these objectives (their place in the business structure), and have the skills they need to meet them (they understand relevant parts of your business systems, such as IT systems). Perhaps your employees use calendars and project management tools to meet deadlines, or organise meetings with their colleagues. 

Using the McKinsey 7S model: step-by-step

Once you have a firm grasp of how the McKinsey 7S model elements interrelate, you can look at how to use the model to assess your company’s needs. 

• Identify areas where these elements are unaligned in your business: for example, your business values might not be aligned with your employee skills. By taking this first step to understanding which elements of your business are mismatched, you can look at solving the issue.

• Decide what the ultimate business design is for you: Consider consulting with your senior management staff to decide what your optimum organisational design should be. That way, you can look at setting realistic goals and objectives. This may require extensive research, as every business will have a unique set of challenges, objectives, and value proposition.

• Work out where changes should be made: Decide on what company elements mismatch. Perhaps your business has a skills gap, or your employees aren’t communicating effectively with their team. Work out how you can fix these issues so you can achieve the more optimum organisational design you’ve laid out.

• Fix these changes: Finally, you can look at integrating these changes into your organisational design. This may require large or small business transformations, so it may be a good idea to consider costs and budget, such as in the case of staff training or hiring new employees.

Advantages vs disadvantages of the McKinsey 7S model

Below, we examine some of the advantages and disadvantages of using the McKinsey 7S model. Whether it is effective for you will depend on your individual business needs. By assessing the advantages and disadvantages, you can reach the decision to use it (or not) more effectively.

Advantages of using the McKinsey 7S model

Here are some of the advantages of this type of model:

• Helps your business to work holistically.
• Helps you to track changes to your organisational design.
• Is considered a classic theory with proven results.

Disadvantages of using the McKinsey 7S model

Here are some of the disadvantages:

• Tackles long-term rather than short-term organisational changes.
• As business structures and hierarchies change or modernise, this model may become redundant.
• Does not factor in external influences on a business, such as macroeconomic changes or geopolitical changes.

The McKinsey 7S model can be an effective way to assess and update your organisational design. This is as it involves taking a holistic approach to the different elements that comprise your business. However, whether the model is right for you will depend on certain factors, such as whether you’re looking to take on long-term rather than short-term changes. Also, this model is most effective when you apply it to internal organisational factors, rather than external factors that might be affecting your business.