7S model McKinsey
The McKinsey 7S model is a management model for making an internal analysis. McKinsey states that you can divide the internal organization of a company into 7 main components (factors). All 7 factors are in balance with optimum operational management.
In this article we provide a detailed explanation and a detailed 7S model. We provide an example for each component. We also explain in detail how you can use the 7S model and perform an analysis with it.
The 7S model from McKinsey contains the following components
|3 Hard factors:||4 Soft factors factoren:|
|- System||- Shared values|
|- Strategy||- Style|
|- Structure||- Skills|
We give a short explanation and an example for each factor from the 7S model.
Explanation hard factors 7S model
Hard factors in the 7S model are easier to identify and change than the soft factors that we will talk about later. Hard factors are things that you can think of and implement, such as making a strategic plan, mapping the organization, elaborating formal processes and rolling out communication systems.
7S model hard factor 1 - System
In the McKinsey 7S model, system means the operations of a company. Here, it is thought out which processes and tasks are needed to be able to deliver the products or services. This also includes information technology such as CRM, Document Management and financial programs.
7S model example questions to analyze the system:
- What are the most important (IT) systems within the organization?
- How are these tracked? Are they structurally monitored and regularly evaluated?
- Which internal processes are being followed and is this also documented?
7S model hard factor 2 - Strategy
One of the strong and revolutionary parts of the 7S model is that strategy is not in the center, but that it is only one of the 7 factors. Strategy actually means the company's future plans. With strategy it is important that clear choices are made (focus). The ultimate goal of strategy must be that you gain a competitive advantage over your competitors.
7S model example questions to analyze the strategy:
- What is the strategy?
- How do you want to achieve your goals?
- How do you handle competition?
- Are you prepared for changes in demand?
7S model hard factor 3 - Structure
The factor structure is how the company is organized. What does the organization chart look like? Here it is determined which department is responsible for which process and who reports to whom.
7S model example questions to analyze the structure of an organization:
- How is the company organized?
- What is the hierarchy within the organization (who reports to whom and is this correct)?
- How do different departments work together?
- How are projects organized within the organization?
- Are decisions arranged centrally or decentrally? Is this how it should be?
Explanation soft factors 7S model
The 4 soft factors identified in the 7S model are more difficult to grasp, and therefore more difficult to influence. The soft factors mainly have to do with the corporate culture. These are matters that can only be influenced and cannot be imposed. According to the makers of the 7S model, the soft factors are at least as important as the hard factors that we discussed above.
7S model soft factor 1 - Shared values
Shared values are about the corporate culture that prevails within the company. The vision of the company also forms part of this component. The shared values are at the center of the 7S model and that is not done for nothing. The idea behind this is that the central values within a company affect all other facets. A company has been set up with a certain idea (vision) of the founders. This radiates to all parts of the company. If the central values within a company change, this affects all factors within the company.
7S model example questions to analyze the shared values of an organization:
- What are the shared values of the organization, is there a vision, and are these known to staff?
- What is the culture like within the organization?
- Do the defined vision and values of the organization match reality?
- Does management also adhere to the shared values and vision?
7S model soft factor 2 - Staff
The staff factor is about staff within the company. In this part of the 7S model, the Human resource (HR) policy of an organization is therefore discussed. For example, HR policy is about what profile people you hire, how you motivate, train and reward your staff.
7S model example questions to analyze an organization's personnel policy:
- What competencies and specializations are available within the team or organization?
- Are we missing competencies within the team or organization?
- What is the course within the organization?
- What about employee satisfaction?
- What is the male / female distribution?
7S model soft factor 3 - Style
This section is about the style of management. Is the leadership style top-down or bottom-up? Is the atmosphere within the company informal, or formal and hierarchical? These are all issues that influence how staff within an organization function. It also has its influence on what kind of staff you attract as a company. Questions to analyze the management style within an organization are just mentioned above. You could also ask, for example, whether staff are cooperative or competitive towards each other
7S model soft factor 4 - Skills
Skills, or skills, is about the skills that are available in the organization. What are the strengths of the organization?
7S model example questions to identify the skills available within an organization:
- What different training courses has the staff attended?
- Are there projects where unique skills would come in handy?
Where and when do you use the 7S model?
You use the 7S model to make an internal analysis. That can be an analysis of a company, but of course you can also analyze a department or even a project with it.
The idea behind the McKinsey 7S model is that all 7s are in balance. If one of the 6s does not match the rest, this has a negative impact on business operations. I say 6S and not 7, because if the middle S (Shared values) changes, then it affects all other Ss.
For change projects, the 7S model can be used as a framework to prevent the organization from becoming unbalanced. Examples of change projects are: reorganisations, mergers and acquisitions, the commissioning of a new system etc. With the 7S model from McKinsey you can make a so-called 'Gap analysis'. You look at the current situation and compare it with the situation you want to go to. Once problems have been identified, they can be addressed. After a while you perform the analysis again to see if the problems have indeed been solved.
7S model example matrix
As we indicated above, it is important that all 7 factors in the 7S model are in balance with each other. If you work out the 7s model, it is therefore useful to put all factors against each other. That is why we have made the matrix below for you. This matrix is a worksheet that you can use to quickly complete the 7S model.
Background of the 7S model
The 7S model was developed by the consultants of McKinsey in the late 70s. McKinsey is one of the leading consulting firms in the world. Tom Peters has also contributed to the model, and used it in its mega bestseller In search of excellence
When Nokia's sales results started to fall at the beginning of 2000, the 7S model was also used there. Unfortunately, the implementation did not go as planned and the company fell even further into the abyss. Read here the whole story of Nokia