The McKinsey 7-S framework identifies 7 internal elements of an organization that need to align for it to be successful: strategy, structure, systems, shared values, style, staff, and skills. These elements are categorized as either "hard" (strategy, structure, systems), which are more tangible and directly influenced by management, or "soft" (shared values, style, staff, skills), which are less tangible but still important. For an organization to perform well, all elements need to balance and reinforce each other so that a change in one does not adversely affect the others. The framework can be used to analyze an organization and identify any inconsistencies between elements that need to be addressed.

1. THE MCKINSEY
7-S FRAMEWORK
MAKING EVERY PART OF YOUR
ORGANIZATION
WORK IN HARMONY

2. • The model was developed in the late 1970s by Tom Peters and Robert
Waterman, former consultants at McKinsey & Company.
• They identified seven internal elements of an organization that need to
align for it to be successful.

3. THE SEVEN ELEMENTS OF THE MCKINSEY 7-S
FRAMEWORK
The model categorizes the seven elements as either "hard" or "soft":
HARD ELEMENTS
Strategy Shared Values
Systems Staff
Style
Skills
SOFT ELEMENTS
Structure

4. • The three "hard" elements are strategy, structures (such as organization
charts and reporting lines), and systems (such as formal processes and IT
systems).
• These are relatively easy to identify, and management can influence
them directly.
• The four "soft" elements, on the other hand, can be harder to describe,
less tangible, and more influenced by your company culture.
• But they are just as important as the hard elements if the organization
is going to be successful.
The “Hard” and “Soft” Elements

5. Figure shows how the elements depend on each other, and how a change in one
affects all the others.

6. LET US LOOK AT EACH OF THE ELEMENTS INDIVIDUALLY:
• Strategy: this is your organization's plan for building and maintaining a
competitive advantage over its competitors.
• Structure: this is how your company is organized (how departments and teams
are structured, including who reports to whom).
• Systems: the daily activities and procedures that staff use to get the job done.
• Shared values: these are the core values of the organization, as shown in its
corporate culture and general work ethic. They were called "superordinate
goals" when the model was first developed.
• Style: the style of leadership adopted in the organization.
• Staff: the employees and their general capabilities.
• Skills: the actual skills and competencies of the organization's employees.

7. NOTES:
• Placing shared values in the center of the model emphasizes that these
values are central to the development of all the other critical elements.
• The model states that the seven elements need to balance and reinforce
each other for an organization to perform well.

8. USING THE 7-S MODEL
1. Start with your shared values: are they consistent with your structure,
strategy, and systems? If not, what needs to change?
2. Then look at the hard elements. How well does each one support the others?
Identify where changes need to be made.
3. Next, look at the soft elements. Do they support the desired hard elements?
Do they support one another? If not, what needs to change?
4. As you adjust and align the elements, you will need to use an iterative process
of making adjustments, and then re-analyzing how that impacts other elements
and their alignment. The end result of better performance will be worth it.
A simple 7-S Matrix will help in the analysis (see Handouts)

9. CHECKLIST QUESTIONS FOR THE MCKINSEY 7-S
FRAMEWORK
Strategy:
• What is our strategy?
• How do we intend to achieve our objectives?
• How do we deal with competitive pressure?
• How are changes in customer demands dealt with?
• How is strategy adjusted for environmental issues?

10. Structure:
• How is the company/team organized/divided into work units?
• What is the hierarchy?
• How do the various departments coordinate activities?
• How do the team members organize and align themselves?
• Is decision making and controlling centralized or decentralized? Is this as it
should be, given what we're doing?
• Where are the lines of communication? Explicit and implicit?

11. Systems:
• What are the main systems that run the organization? Consider financial
and HR systems as well as communications and document storage.
• Where are the controls and how are they monitored and evaluated?
• What internal rules and processes does the team use to keep on track?
Shared Values:
• What are the core values?
• What is the corporate/team culture?
• How strong are the values?
• What are the fundamental values that the company/team was built on?

12. Style:
• How participative is the management/leadership style?
• How effective is that leadership?
• Do employees/team members tend to be competitive or cooperative?
• Are there real teams functioning within the organization or are they just
nominal groups?
Staff:
• What positions or specializations are represented within the team?
• What positions need to be filled?
• Are there gaps in required competencies?

13. Skills:
• What are the strongest skills represented within the company/team?
• Are there any skills gaps?
• What is the company/team known for doing well?
• Do the current employees/team members have the ability to do the job?
• How are skills monitored and assessed?

14. KEY POINTS
• You can apply the McKinsey 7-S framework to almost any organizational or
team effectiveness issue.
• If something within your organization or team isn't working, chances are there is
inconsistency between some of the seven elements (strategy, structure, systems,
shared values, style, staff, and skills) identified in the model.
• Once you reveal these inconsistencies, you can work to align these elements to
make sure they are all contributing to the shared goals and values.
• The process of analyzing where you are right now in terms of these elements is
worthwhile in itself. But you can really move your organization or team forward
by determining the desired future state for each of the factors.

15. GROUP WORK
Groups A and C:
For Current Situation:
• Assess for presence, completeness and relevance of each of the 7-S
• Analyze consistency and compatibility between and among the elements
For Future Situation
• Identify statements per the 7-S on what you want to see/have in the future (set timeline)
Use the template 7-S Matrix for both Current and Desired Situation
Groups B and D:
• Analyze SWOT of each element
• Identify Objectives/Implementation Strategies/Activities
Use SWOT Analysis templates: A and B

16. THE SWOT ANALYSIS
STRENGTHS
THREATS
WEAKNESSES
OPPORTUNITIE
S
INTERNAL
EXTERNAL
POSITIVE NEGATIVE

17. THE SWOT ANALYSIS
STRENGTHS
THREATS
WEAKNESSES
OPPORTUNITIES
INTERNAL
EXTERNAL
POSITIVE NEGATIVE
EXPLORE
BUILD
MINIMIZE
OVERCOME

18. IDENTIFYING THE OBJECTIVES, IMPLEMENTATION STRATEGIES AND/OR
ACTIVITIES (using the SWOT Assessment Results)
COMBINATION
RESULTING
STRATEGY
WHY/WHAT
FOR
S + W
S + 0
S + T
W + O
W + T
O + T
PERSPECTIVE

19. 7-S ANALYSIS MATRIX
SKILLS
STAFF
STYLE
SYSTEMS
STRUCTURE
STRATEGY
SHARED
VALUES
SHARED
VALUES
STRATEGY
STRUCTURE
SYSTEMS
STYLE
STAFF
SKILLS