McKinsey & Co 7's

What is McKinsey 7's framework?
It is described as a management model of 7 factors to organise a company in a holistic and efficient way. Together, these factors determine the way in which a corporation operates.
Management should take all 7 factors to ensure successful implementation of a strategy.
It was first made public in Athos and Pascale's 'The Art of Japanese Management' and made even more famous in Peters and Waterman's 80s classic 'In Search of Excellence'.

Originally developed as a way of thinking more broadly about the problems of organizing effectively, the 7-S framework provides a tool for judging the "doability" of strategies.
This is the McKinsey '7S framework' of business that have been used at the McKinsey consulting company:
Hard' variables:(easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems).
- Strategy: plan leading to allocation of resources.
- Structure: organization reporting lines, geography, etc.
- Systems: formal and informal processes used.

Soft' variables:(on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful).
- Staff: demographics of personnel.
- Style: behavior of managers when interacting with others.
- Skills: core competencies of the firm.
- Shared value: culture, which is actually the core element to it all.

Strategy: the plan devised to maintain and build competitive advantage over the competition. Plan leading to allocation of resources which a set of actions that you start with and must maintain.

Structure: the way the organization is structured and who reports to whom, i.e how people and tasks / work are organised and organization reporting lines.The ways in which people are organized, tasks are coordinated.

Systems: the daily activities and procedures that staff members engage in to get the job done,in other word all the processes and information flows that link the organisation together.

Shared Values: called “superordinate goals” when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic. They Longer-term vision, and all that values stuff, that shapes the destiny of the organisation, or the normal saying "big stuff that drives the company forward".

Style: the style of leadership adopted, so called behavior of managers when interacting with others.

Staff: the employees and their general capabilities.Its also involves how you develop managers (current and future).Concerns on demographics of personnel.

Skills: the actual skills and competencies of the employees exists or working for the company. Where the core competencies of the firm is captured.

The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you:
- Improve the performance of a company;
- Examine the likely effects of future changes within a company;
- Align departments and processes during a merger or acquisition; or
- Determine how best to implement a proposed strategy.

In change processes, many organizations focus their efforts on the hard S’s, Strategy, Structure and Systems. They care less for the soft S’s, Skills, Staff, Style and Shared Values. Peters and Waterman in “In Search of Excellence” commented however, that most successful companies work hard at these soft S’s. The soft factors can make or break a successful change process, since new structures and strategies are difficult to build upon inappropriate cultures and values. These problems often come up in the dissatisfying results of spectacular mega-mergers.
The 7-S Model is a valuable tool to initiate change processes and to give them direction. A helpful application is to determine the current state of each element and to compare this with the ideal state. Based in this it is possible to develop action plans to achieve the intended state.

The McKinsey 7Ss model is one that can be applied 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 elements identified by this classic model. Once these inconsistencies are revealed, you can work to align the internal elements to make sure they are all contributing to the shared goals and values.

Reference:
*Organizational Alignment: The 7-S Model, Harvard Business School Note, Bradach Jeffrey.
*Peters, T., Waterman, R. (1982) “In Search of Excellence”.
Strategic Management Concepts by Michael A Hitt R. Duane Ireland , Robert E. Hoskisson (2006 version).