The document discusses an expanded perspective on McKinsey's 7S framework, emphasizing the importance of a 'balcony view' for managers to understand the bigger picture beyond daily operations. It outlines the six critical elements of organizational structure and the essential components of the 7S framework—shared values, strategy, structure, systems, skills, and style—highlighting how they interrelate to assess and implement organizational effectiveness. The conclusion suggests that while the 7S framework is a valuable tool for managing change, it may lack consideration of psychological factors, and recommends additional models for strategic assessment.

1. An expanded McKinsey’s 7S Framework prospective
The balcony’s view
Able to see the big picture from the balcony is not an easy task, especially when
managers are busy with day-to-day operations. The balcony‟s view plays an
important role in the process of lifting a manager in a leadership position. If for a
moment you compare the day-to-day operational to a dance floor, you will
notice that while spending the whole evening to the dance floor, you will be
aware of what happens in your immediate vicinity. Much energy will be spent
on dancing and avoiding other people dancing. At the end of the day you‟ll
think that the dance and the music were great. If instead you had a chance to
go to a balcony, you would have noticed several different details. For example
that not all the people were dancing with a certain selection of music or some
of them were close to the center. The balcony view would have provided a
different experience of that evening.
Basically the balcony‟s view is helping in understanding the big picture, to
reflect continually on what people are doing, to encourage then to making the
needed changes, to keep the vision and provide the right guidelines.
The complexity of large organization require a very broaden prospective when it
comes to understand how organization can be measured. The balcony‟s view
helps to recognize what is important for share / stake-holders and how are they
are related with the company‟s vision. Leaders and managers shall be
interested in exploring and evaluating competitive dynamics, financials, market
evolutions and technology. During this process leaders will be able to analyze
historical financial performances, values and aspirations. All these relevant data
can give a good snap-shot of the company‟s health.
The balcony‟s view is particularly important also in understanding the
organizational structure and how each element is co- relate in the organization.
Michael Goold and Andrew Campbell have defined 6 critical elements1 : work
specialization (how activities are separated in different jobs),
departmentalization (how to coordinate common tasks), chain of command
(the authority line that clarify who report to whom), span of control (how many
people can each manager effectively control), centralization and
1
“Well designed organizations?” by Michael Goold and Andrew Campbell – Harvard Business School 2002

2. decentralization (concentrating or pushing down the decision making process),
formalization (how the job needs to be executed and standardized).
To be effective in our balcony‟s view Jack Weber, in his Note2 introduce a useful
framework developed specifically to understand complex organizations. This
framework was initially developed by Mc Kinsey Company to relate several key
elements in a dynamic relationship.
The 7-s framework
The 7-S framework was introduced in the late 1970s, thinking about
organizational effectiveness seen as structures. It was more like “who does what,
who reports to whom, and the like.” Some 30 years later, 7-S remains an
important tool to understand the complexity of organizations. Today, more than
ever, structure alone isn't organization3. The 7s elements are: Shared Values,
Strategy, Structure, System, Skills, Staff and Style.
The first element of the “7s” is the Value. It represent the Corporate Culture and
Guiding concept, leading to Core purpose that reflects the idealistic motivation
why people go to work. Value has something to do with Company mission.
The company that has one single product or a large portfolio of products
requires a corporate Strategy. Strategy helps in understanding the process of
translating the company‟s vision into a competitive advantage choosing
among different paths or alternatives. Strategy and Structure are closely linked4.
More specifically, structure should follow strategy. If any changes are made in
the organization‟s strategy, the structure shall be modified to support and
accommodate these changes. Organizations are not static entity but evolve as
situation change5. That‟s why every organization shall be supported by a proper
structure.
Structure is defined as the grouping of different positions and departments within
a company, which all have separate tasks but work together to operate as one
company. Structures are evolving as companies growing in different stage of
their life, from start-up to better established corporations, going through various
2
A leader’s guide to understanding complex organizations: an expanded “7-S” perspective – University of Virginia –
1998 – UVA OB 065
3
Lowell Bryan, Director in McKinsey's New York office
4
The strategy/structure thesis was originally proposed in A.D. Chandlet Jr. Strategy and Structure, Cambridge, MIT
press 1962
5
“Evolution and revolution as organizations grow” by Larry Greiner .Harvard Business Review, 1972

3. predictable evolutionary stages. Most of all the organization‟s structure reduce
ambiguity from employees, make clear activities to do and explain reporting
lines. Structure can also limit and constrain employees. To exam the different
components that make up an organization and to discover their
interrelationships and relative importance, it is then important to design the right
structure.
Michael Goold and Andrew Campbell 6 are providing us with some supportive
key elements to help designing the right structure. We shall ask ourselves in
which market shall we compete in and how we will gain an advantage over
competitors in those markets? The structure shall be able to support the key
source of advantage and related operating initiatives. The structure shall
support the communication across the units and collaboration within the units.
We also should consider that newly designed structure may have constrains on
their ability to act. For example we could take in account local government
regulations, the interest of major stake/share-holders, the company‟s information
system or even corporate culture. Once the structure is defined, it needs to be
tested to understand if every unit has appropriate control over its performance,
help in developing the new required strategy and provide the right flexibility to
adapt changes.
The fourth element of the “7-S” is the System. The System defines the way any
organization deals with procedures and Processes, both formal and informal.
Many companies today are facing the challenge of recognizing their intangible
and intellectual assets in terms of performance measures. Researchers Robert S.
Kaplan and David P. Norton studied this problem and the result was the
introduction of the Balanced Scorecard. The balanced scorecard gives upper
management a quick and effective view of the critical factors affecting the
organization now and in the future. Key elements in the balanced scorecard
are: financial, customer and internal prospective, innovation and improvement.
These key elements are closely related to the budgeting process, helping the
management to communicate strategic goals and mission to all the
stakeholders in the organization.
The Skills are the distinctive capabilities or dominating attributes of each
organization. It is the ability to transfer “best practices” rapidly across different
businesses. Increase people‟s skill is a challenge on its own. The challenge is to
6
“Well designed organizations” by Michael Goold and Andrew Campbell – Harvard Business School publishing -
2002

4. improve mental work and not to increase the physical activities. The task is to
teach many people in the same organization to think smarter and faster. The
goal is to equip them with the right tools and knowledge to make them able to
recognize patterns and anticipate problems and opportunities before they
occur.7
Staff & People: typically is a person who is hired to provide services to a
company on a regular basis in exchange for compensation. We have learnt by
now that the organization‟s structure provides directions and reporting line to
employees. Is now the time to understand how to design the perfect job for the
perfect position.
Robert Simon in his work “Designing high performance job8” is giving us an
idea of how to improve performance of key people and make them
accountable for the success or failure. The key here is to understand how much
autonomy and freedom you are granting someone‟s job. This can be described
in four major span or activities: 1. Controlling: where a manager is granted the
right to use certain resources; 2. Accountability: that measure how that
manager has been performing; 3. Influence: to understand how many
individuals need to be in the circle of influence to get the job done; 4. Support:
describe how much commitment is required form other individuals directly or
indirectly related to the success of that job activity. The key to success lays here
in narrowing or widen these 4 spans. For instance, a narrow span of control will
reduce allocated resources and avoid large unwanted changes. On the
contrary, a wide span of control will allocate more resources and allow a larger
flexibilities and changes. It is important to understand how much control will be
given to a certain manager according to the job position and key
responsibilities. In my opinion, it is also important to define the span of control,
not only on the job responsibilities but also according to the manager‟s
personality.
The last element of the 7s is the Style. The Style represent explicit or implicit
fundamental beliefs, concepts, and principles that underlie the culture of an
organization, and which guide decisions and behavior of its employees,
management, and share/stake holders.
Aligning the 7s
7
“Managing change, The art of balancing” by Jenie Daniel Duck - Harvard Business Review - 93602
8
“Designing high performance job” by Robert Simons - Harvard Business School publishing - 2002

5. There are key aspects in any organization where a leader has more to do in
terms of influencing changes and directions and less with authority or position
within the company.
A systematic analysis using the 7-s can help the organization‟s designers to
anticipate ways towards change will take place in one or more dimensions that
will require change in other parts.
Part of the alignment is also related to changes. The changing process itself is a
process that goes through a series of phases that usually require a considerable
amount of time. In this process, as explained by John P. Kotter 9 in his article
“Leading change” leaders that are approaching the change process with the
right attitude are doing eight things right.
First of all they are able to clearly state what is the real reason behind the
change. Urgency makes the changes required. Many projects are failing
because there is not enough sponsorship. Also during the change process, is
important to buy in with the right coalition of people that will entusiastically
support and embrace the changes. The change shall be always supported by a
clear Vision of what shall the company achieve in a given period of time. Vision
can be seen as BHAGS 10 where company‟s values and aspirations need to be
assosiated with visionary managerial personalities. Execution is then a key to
success. To move the change forward, every individual in the company need to
clearly understand the vision and the changes required. Many leader perceive
changes as a distruptive and stressfull process. To avoid this phenomenon, many
short-term wins must be set and clearly visible to everyone in the organisation.
Once each short-term win is achived, it must be consolidated to increse its
credibility among the organisation. In this way, changes will be visible,accepted
and they will create the natural prdisposition to introduce the next changes.
We all know that changes are in need and in demand of great commitment
from all involved. Dynamic stability 11 is the new approach to change. Eric
Abrahamson describes the dynamic stability as the step-by-step process
happening at the right moment of time. It is a process where existing business
„practices are reconfigured, rather than creating new ones. To make dynamic
stability process happening, two processes must be executed: tinkering and
9
”Leading Change – why transformation effort fail” by John P. Kotter – Harvard Business Review - R0701J
10
Big Hairy Audaucious Goals ”Built to last: successful habits of visionary companies” by Jim Collins and Jerry Porra
11
”Change without Pain” by Eric Abrahamson – the president and fellows of Harvard College – Harvard Business
Review Aug. 2000

6. kludging. Tinkering is described as the ability to think out of the box with certain
limitations. It is to re-think smarter about existing process and methodologies and
find ways to do it in a more cost effective way. Kludging, instead, is described as
an extension of tinkering but with the addition of an academic or collegial
support.
Conclusion
McKinsey‟s 7S Framework is a useful tool because covers the range of functions
across the entire organization. However, while the 7s can be considered as one
of the tool that can be used in the process of planning, leading and implement
changes, the process is somehow missing the psychological part connected to
the change. For this reason change‟s managers have stated using a well known
technique able identify the forces that will support the change and those that
will resist it. The Force Field Analysis12, theorized by Kurt Lewin, a social
psychologist, is based on two columns, one listing the driving forces and the
other the restraining forces. The result of the Force Field analysis tells the
managers that change cannot occur if the restraining forces are greater or
similar than the driving forces.
Managers shall also be critical during the early phase of the change process.
While the 7s model provide some supporting guidelines for the strategic
assessment, the market provide some additional well known strategic
assessment tools, models, processes and approaches that can be used to
influences strategic choice. The most recognized models are: The Scenario
Analysis, an approach used to build a variety of future scenarios based on
different combinations of assumptions. The Porter’s Five Forces, that helps
managers in analyzing the attractiveness of the marketplace. The Pestel
analysis, where managers assess aspects of the external environment in which a
company operates and identify how well positioned it is to respond. The Internal
and External analysis, where managers analyze performance and issues relative
to different environments and helps ensure all angles have been considered.
Cosimo Gualano
12
Kurt Lewin. Defining the "Field at a Given Time." Psychological Review. 50: 292-310. Republished in Resolving
Social Conflicts & Field Theory in Social Science, Washington, D.C.: American Psychological Association, 1997.