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© Operational Excellence Consulting. All rights reserved.
7S
Structure
Systems
Style
Staff
Skills
Strategy
Shared
Values
The McKinsey
FRAMEWORK
© Operational Excellence Consulting. All rights reserved. 2
Learning Objectives
Understand the
McKinsey 7S framework
and its interrelated
elements
Understand the best
practices for
implementing the 7S
framework in an
organization
Learn how to apply the
7S framework to
evaluate organizational
effectiveness and
alignment
NOTE: This is a PARTIAL PREVIEW.
To download the complete presentation, please
visit: https://www.oeconsulting.com.sg
© Operational Excellence Consulting. All rights reserved. 3
Contents
1 7S Framework & Elements
2 7S Checklist Questions
3 Using the 7S Framework
4 7S Implementation Steps
5 Examples of 7S Applications
6 7 Vectors of Contention
7 Critical Success Factors
© Operational Excellence Consulting. All rights reserved. 4
What is the 7S Framework?
§ It is a management framework that describes 7 factors to organize a
company in a holistic and effective way
§ Together these factors determine the way in which an organization
operates
§ Managers should take into account all 7 of these factors, to be sure
of successful implementation of a strategy
§ Large or small, the strategies are all interdependent, so if you fail to
pay proper attention to one of them, this may effect all others as well
© Operational Excellence Consulting. All rights reserved. 5
The 7S Framework
Structure
Systems
Style
Staff
Skills
Strategy
Shared
Values
The framework is most often used as a tool to assess and monitor
changes in the internal situation of an organization.
© Operational Excellence Consulting. All rights reserved. 6
Description of the 7S Elements
Elements Description
Strategy
§ The plan devised to maintain and build competitive advantage
over the competition.
Structure § The way the organization is structured and who reports to whom.
Systems
§ The daily activities and procedures that staff members engage in
to get the job done.
Shared Values
§ The core values of the company that are evidenced in the
corporate culture and the general work ethic.
Style
§ The style of leadership adopted and the organization’s overall
operating approach.
Staff § The employees and their general capabilities.
Skills
§ The actual skills and competencies of the employees working for
the company.
© Operational Excellence Consulting. All rights reserved. 7
The 7S Elements
§ The seven interdependent
factors are categorized as either
“hard” or “soft” elements
§ Hard Elements: Strategy,
Structure and Systems
§ Soft Elements: Shared values,
Skills, Style and Staff
Hard elements
Soft elements
Structure
Systems
Style
Staff
Skills
Strategy
Shared
Values
© Operational Excellence Consulting. All rights reserved. 8
7S Hard Elements (“Hard S”)
§ “Hard” elements are easier to
define or identify
§ Management can directly
influence them – these are
strategy statements; organization
charts and reporting lines; and
formal processes and IT systems
§ The hard elements are:
• Strategy
• Structure
• Systems
Structure
Systems
Style
Staff
Skills
Strategy
Shared
Values
© Operational Excellence Consulting. All rights reserved. 9
7S Soft Elements (“Soft S”)
§ “Soft” elements, on the other
hand, can be more difficult to
describe
§ They are less tangible and more
influenced by culture
§ These soft elements are as
important as the hard elements
if the organization is going to be
successful
§ The soft elements are:
• Shared Values
• Skills
• Style
• Staff
Structure
Systems
Style
Staff
Skills
Strategy
Shared
Values
© Operational Excellence Consulting. All rights reserved. 10
Shared Values
§ Shared values refer to the core
beliefs and principles that an
organization holds
§ This can include things like the
organization’s mission, vision,
and values, as well as its
culture and overall philosophy
§ Shared values can have a
significant impact on an
organization’s performance, as
they can influence employee
behavior, decision-making, and
overall organizational culture
Structure
Systems
Style
Staff
Skills
Strategy
Shared
Values
11
© Operational Excellence Consulting. All rights reserved.
“The soft stuff is
always harder than
the hard stuff.”
Roger Enrico
© Operational Excellence Consulting. All rights reserved. 12
Mastering the Framework: Implementation Strategies
1. Identifying gaps between current
and desired states
2. Analyzing how changes in one
element may impact other
elements
3. Identifying opportunities for
improvement
© Operational Excellence Consulting. All rights reserved. 13
7S as an Organizational Gap Analysis Tool
Current
State
Future
State
7S Gap
Analysis
© Operational Excellence Consulting. All rights reserved. 14
Benefits of the 7S Framework
1. It offers an effective method to
diagnose and understand an
organization
2. It provides guidance in
organizational change
3. It combines rational (“hard S”)
and emotional (“soft S”)
elements
4. All parts are integrated and
must be addressed in a unified
manner
© Operational Excellence Consulting. All rights reserved. 15
The 7S Framework can be applied to a wide variety of
situations
1. A diagnostic tool for an ineffective organization
2. Improve the performance of a company
3. Guides organizational changes
4. Examine the likely impacts of future changes within an
organization
5. Align business units and processes during a merger or acquisition
6. Determine how best to implement a proposed strategy
7. Combine rational elements (“hard S”) with emotional elements
(“soft S”)
© Operational Excellence Consulting. All rights reserved. 16
Style – Key Questions
1. How participative is the
management/leadership style?
2. How effective is that leadership?
3. How good is management in making
decisions?
4. Where does management focus most
of its time and attention?
5. Do employees/team members tend to
be competitive or cooperative?
6. Are there real teams functioning
within the organization or are they
just nominal groups?
© Operational Excellence Consulting. All rights reserved. 17
The 7S framework can best be used as a matrix for assessing
the impact of the proposed strategy of the organization
Staff Skills Style
Shared
Values
Systems Structure Strategy
Strategy
- - - - -
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Structure
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Systems
- - - - -
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Shared
Values
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Style
- - - - -
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Skills
- - - - -
- - - - -
Staff
Example: Food4U Supermarket is moving away from its traditional middle-of-the-road retail
model towards an upscale, fresh, full-service, convenience-oriented grocery and fresh market.
An initial decision to hire specialists may have consequences reaching far beyond the scope of
the strategy at it was proposed.
Need for specialists:
e.g. butcher, bread,
baker, food display
specialists
Potential conflict:
(older) specialist vs.
(younger) temporary
employees
© Operational Excellence Consulting. All rights reserved. 18
When conducting a 7S analysis, it is best to use an iterative approach
starting with Shared Values, followed by hard S’s and then soft S’s
Source: Adapted from Mindtools
Start with Shared
Values
• Are they consistent
with your strategy,
structure, and
systems? If not, what
needs to change?
Evaluate the Hard
Elements
• How well does each
one support the
others? Identify where
changes need to be
made.
Evaluate the Soft
Elements
• Do they support the
desired hard
elements? Do they
support one another?
If not, what needs to
change?
Adjust and align the
elements, and then
reanalyze how that
impact other elements
and their alignments
1
2
3
4
© Operational Excellence Consulting. All rights reserved. 19
The 7S Implementation Journey
Understand the Current State
Define the Desired Future State
Identify the Seven Elements
Conduct Gap Analysis
Develop Action Plans
Implement Action Plans
Monitor and Evaluate
1
2
3
4
5
6
7
© Operational Excellence Consulting. All rights reserved. 20
The 7S Implementation Journey – Steps 1 and 2
Step Description Key Activities Deliverables
1 Understand the Current
State
§ Review existing organizational
documents (e.g., mission
statements, strategic plans).
§ Conduct interviews with key
stakeholders to gather insights.
§ Analyze available data on
organizational performance.
§ Current state
assessment report
highlighting key
findings and
insights.
2 Define the Desired
Future State
§ Facilitate workshops with
leadership to define the
organization’s vision and strategic
objectives.
§ Identify areas for improvement
based on the current state
assessment.
§ Communicate the vision and
strategic objectives to all
stakeholders.
§ Vision and strategic
objectives
document.
21
© Operational Excellence Consulting. All rights reserved.
“Innovation
distinguishes
between a leader
and a follower.”
Steve Jobs
© Operational Excellence Consulting. All rights reserved. 22
The Vectors of Contention is a useful tool to profile an
organization with respect to the 7 elements
Elements Vectors of Contention
Strategy Planned Opportunistic
Structure Elitist Pluralist
Systems Mandatory Discretionary
Shared values Hard minds Soft hearts
Style Managerial Transformational
Skills Collegiality Individuality
Staff Maximize ‘Meta-mize’
Refer to Appendix 1 for explanatory notes on the Contending Opposites (Vectors of Contention).
© Operational Excellence Consulting. All rights reserved. 23
Harmonizing Forces: Resolving Organizational
Tensions
Step Description Key Activities
1 Identify the Seven Vectors of
Contention
§ Review the 7S framework to understand the seven
vectors.
§ Identify specific examples or scenarios within the
organization that correspond to each vector.
2 Analyze Each Vector § Examine how each vector manifests in the
organization.
§ Evaluate the impact of the opposing forces on
organizational alignment and effectiveness.
3 Identify Areas of Tension § Determine which vectors are causing the most tension
or conflict.
§ Consider the implications of these tensions on
organizational performance.
4 Develop Strategies to
Address Tension
§ Brainstorm potential strategies to resolve or mitigate
the identified tensions.
§ Prioritize strategies based on their potential impact
and feasibility.
§ Implement selected strategies and monitor their
effectiveness.
© Operational Excellence Consulting. All rights reserved. 24
Example 1: Apple – Balancing Innovation and Efficiency
Step Description Key Activities
1 Identify the Seven Vectors of
Contention
§ Apple identifies the vectors within its organizational
structure, including conflicting goals between product
innovation and supply chain efficiency.
2 Analyze Each Vector § Apple analyzes how these conflicting goals impact its
ability to introduce new products quickly while
maintaining high-quality standards.
3 Identify Areas of Tension § Apple identifies that the tension between innovation
and efficiency could lead to delays in product launches
or compromises in product quality.
4 Develop Strategies to
Address Tension
§ Apple implements strategies such as cross-functional
collaboration, flexible manufacturing processes, and
supplier partnerships to balance innovation and
efficiency.
© Operational Excellence Consulting. All rights reserved. 25
Operational Excellence Consulting is a Singapore-based management
training and consulting firm specializing in enhancing business performance
and effectiveness. We focus on maximizing customer value and minimizing
waste through strategic adoption of Design Thinking and Lean management
practices. For more information, visit www.oeconsulting.com.sg

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The McKinsey 7S Framework: A Holistic Approach to Harmonizing All Parts of the Organization

  • 1. © Operational Excellence Consulting. All rights reserved. 7S Structure Systems Style Staff Skills Strategy Shared Values The McKinsey FRAMEWORK
  • 2. © Operational Excellence Consulting. All rights reserved. 2 Learning Objectives Understand the McKinsey 7S framework and its interrelated elements Understand the best practices for implementing the 7S framework in an organization Learn how to apply the 7S framework to evaluate organizational effectiveness and alignment NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg
  • 3. © Operational Excellence Consulting. All rights reserved. 3 Contents 1 7S Framework & Elements 2 7S Checklist Questions 3 Using the 7S Framework 4 7S Implementation Steps 5 Examples of 7S Applications 6 7 Vectors of Contention 7 Critical Success Factors
  • 4. © Operational Excellence Consulting. All rights reserved. 4 What is the 7S Framework? § It is a management framework that describes 7 factors to organize a company in a holistic and effective way § Together these factors determine the way in which an organization operates § Managers should take into account all 7 of these factors, to be sure of successful implementation of a strategy § Large or small, the strategies are all interdependent, so if you fail to pay proper attention to one of them, this may effect all others as well
  • 5. © Operational Excellence Consulting. All rights reserved. 5 The 7S Framework Structure Systems Style Staff Skills Strategy Shared Values The framework is most often used as a tool to assess and monitor changes in the internal situation of an organization.
  • 6. © Operational Excellence Consulting. All rights reserved. 6 Description of the 7S Elements Elements Description Strategy § The plan devised to maintain and build competitive advantage over the competition. Structure § The way the organization is structured and who reports to whom. Systems § The daily activities and procedures that staff members engage in to get the job done. Shared Values § The core values of the company that are evidenced in the corporate culture and the general work ethic. Style § The style of leadership adopted and the organization’s overall operating approach. Staff § The employees and their general capabilities. Skills § The actual skills and competencies of the employees working for the company.
  • 7. © Operational Excellence Consulting. All rights reserved. 7 The 7S Elements § The seven interdependent factors are categorized as either “hard” or “soft” elements § Hard Elements: Strategy, Structure and Systems § Soft Elements: Shared values, Skills, Style and Staff Hard elements Soft elements Structure Systems Style Staff Skills Strategy Shared Values
  • 8. © Operational Excellence Consulting. All rights reserved. 8 7S Hard Elements (“Hard S”) § “Hard” elements are easier to define or identify § Management can directly influence them – these are strategy statements; organization charts and reporting lines; and formal processes and IT systems § The hard elements are: • Strategy • Structure • Systems Structure Systems Style Staff Skills Strategy Shared Values
  • 9. © Operational Excellence Consulting. All rights reserved. 9 7S Soft Elements (“Soft S”) § “Soft” elements, on the other hand, can be more difficult to describe § They are less tangible and more influenced by culture § These soft elements are as important as the hard elements if the organization is going to be successful § The soft elements are: • Shared Values • Skills • Style • Staff Structure Systems Style Staff Skills Strategy Shared Values
  • 10. © Operational Excellence Consulting. All rights reserved. 10 Shared Values § Shared values refer to the core beliefs and principles that an organization holds § This can include things like the organization’s mission, vision, and values, as well as its culture and overall philosophy § Shared values can have a significant impact on an organization’s performance, as they can influence employee behavior, decision-making, and overall organizational culture Structure Systems Style Staff Skills Strategy Shared Values
  • 11. 11 © Operational Excellence Consulting. All rights reserved. “The soft stuff is always harder than the hard stuff.” Roger Enrico
  • 12. © Operational Excellence Consulting. All rights reserved. 12 Mastering the Framework: Implementation Strategies 1. Identifying gaps between current and desired states 2. Analyzing how changes in one element may impact other elements 3. Identifying opportunities for improvement
  • 13. © Operational Excellence Consulting. All rights reserved. 13 7S as an Organizational Gap Analysis Tool Current State Future State 7S Gap Analysis
  • 14. © Operational Excellence Consulting. All rights reserved. 14 Benefits of the 7S Framework 1. It offers an effective method to diagnose and understand an organization 2. It provides guidance in organizational change 3. It combines rational (“hard S”) and emotional (“soft S”) elements 4. All parts are integrated and must be addressed in a unified manner
  • 15. © Operational Excellence Consulting. All rights reserved. 15 The 7S Framework can be applied to a wide variety of situations 1. A diagnostic tool for an ineffective organization 2. Improve the performance of a company 3. Guides organizational changes 4. Examine the likely impacts of future changes within an organization 5. Align business units and processes during a merger or acquisition 6. Determine how best to implement a proposed strategy 7. Combine rational elements (“hard S”) with emotional elements (“soft S”)
  • 16. © Operational Excellence Consulting. All rights reserved. 16 Style – Key Questions 1. How participative is the management/leadership style? 2. How effective is that leadership? 3. How good is management in making decisions? 4. Where does management focus most of its time and attention? 5. Do employees/team members tend to be competitive or cooperative? 6. Are there real teams functioning within the organization or are they just nominal groups?
  • 17. © Operational Excellence Consulting. All rights reserved. 17 The 7S framework can best be used as a matrix for assessing the impact of the proposed strategy of the organization Staff Skills Style Shared Values Systems Structure Strategy Strategy - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Structure - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Systems - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Shared Values - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Style - - - - - - - - - - - - - - - - - - - - Skills - - - - - - - - - - Staff Example: Food4U Supermarket is moving away from its traditional middle-of-the-road retail model towards an upscale, fresh, full-service, convenience-oriented grocery and fresh market. An initial decision to hire specialists may have consequences reaching far beyond the scope of the strategy at it was proposed. Need for specialists: e.g. butcher, bread, baker, food display specialists Potential conflict: (older) specialist vs. (younger) temporary employees
  • 18. © Operational Excellence Consulting. All rights reserved. 18 When conducting a 7S analysis, it is best to use an iterative approach starting with Shared Values, followed by hard S’s and then soft S’s Source: Adapted from Mindtools Start with Shared Values • Are they consistent with your strategy, structure, and systems? If not, what needs to change? Evaluate the Hard Elements • How well does each one support the others? Identify where changes need to be made. Evaluate the Soft Elements • Do they support the desired hard elements? Do they support one another? If not, what needs to change? Adjust and align the elements, and then reanalyze how that impact other elements and their alignments 1 2 3 4
  • 19. © Operational Excellence Consulting. All rights reserved. 19 The 7S Implementation Journey Understand the Current State Define the Desired Future State Identify the Seven Elements Conduct Gap Analysis Develop Action Plans Implement Action Plans Monitor and Evaluate 1 2 3 4 5 6 7
  • 20. © Operational Excellence Consulting. All rights reserved. 20 The 7S Implementation Journey – Steps 1 and 2 Step Description Key Activities Deliverables 1 Understand the Current State § Review existing organizational documents (e.g., mission statements, strategic plans). § Conduct interviews with key stakeholders to gather insights. § Analyze available data on organizational performance. § Current state assessment report highlighting key findings and insights. 2 Define the Desired Future State § Facilitate workshops with leadership to define the organization’s vision and strategic objectives. § Identify areas for improvement based on the current state assessment. § Communicate the vision and strategic objectives to all stakeholders. § Vision and strategic objectives document.
  • 21. 21 © Operational Excellence Consulting. All rights reserved. “Innovation distinguishes between a leader and a follower.” Steve Jobs
  • 22. © Operational Excellence Consulting. All rights reserved. 22 The Vectors of Contention is a useful tool to profile an organization with respect to the 7 elements Elements Vectors of Contention Strategy Planned Opportunistic Structure Elitist Pluralist Systems Mandatory Discretionary Shared values Hard minds Soft hearts Style Managerial Transformational Skills Collegiality Individuality Staff Maximize ‘Meta-mize’ Refer to Appendix 1 for explanatory notes on the Contending Opposites (Vectors of Contention).
  • 23. © Operational Excellence Consulting. All rights reserved. 23 Harmonizing Forces: Resolving Organizational Tensions Step Description Key Activities 1 Identify the Seven Vectors of Contention § Review the 7S framework to understand the seven vectors. § Identify specific examples or scenarios within the organization that correspond to each vector. 2 Analyze Each Vector § Examine how each vector manifests in the organization. § Evaluate the impact of the opposing forces on organizational alignment and effectiveness. 3 Identify Areas of Tension § Determine which vectors are causing the most tension or conflict. § Consider the implications of these tensions on organizational performance. 4 Develop Strategies to Address Tension § Brainstorm potential strategies to resolve or mitigate the identified tensions. § Prioritize strategies based on their potential impact and feasibility. § Implement selected strategies and monitor their effectiveness.
  • 24. © Operational Excellence Consulting. All rights reserved. 24 Example 1: Apple – Balancing Innovation and Efficiency Step Description Key Activities 1 Identify the Seven Vectors of Contention § Apple identifies the vectors within its organizational structure, including conflicting goals between product innovation and supply chain efficiency. 2 Analyze Each Vector § Apple analyzes how these conflicting goals impact its ability to introduce new products quickly while maintaining high-quality standards. 3 Identify Areas of Tension § Apple identifies that the tension between innovation and efficiency could lead to delays in product launches or compromises in product quality. 4 Develop Strategies to Address Tension § Apple implements strategies such as cross-functional collaboration, flexible manufacturing processes, and supplier partnerships to balance innovation and efficiency.
  • 25. © Operational Excellence Consulting. All rights reserved. 25 Operational Excellence Consulting is a Singapore-based management training and consulting firm specializing in enhancing business performance and effectiveness. We focus on maximizing customer value and minimizing waste through strategic adoption of Design Thinking and Lean management practices. For more information, visit www.oeconsulting.com.sg