What Is the McKinsey 7S Model?

The McKinsey 7S Model is a change management tool for analyzing organizational design, alignment, and
performance. It offers a simplified method of identifying organizational gaps, inconsistencies, and conflicts.
Additionally, it is useful for mapping out various types of change initiatives in complex environments.
As the name implies, there are seven components to the 7S Model—all of which start with an “S.”
These seven components are grouped into “hard” and “soft” elements. Both are equally important to driving
successful change initiatives.

Hard elements
Hard elements are tangible, easy to identify, and can be directly impacted by management.
• Structure
• Strategy
• Systems
Soft elements
Soft elements are intangible and primarily driven by the organization’s corporate culture.
• Skills
• Style
• Staff
• Shared Values

7 ELEMENTS OF THE MCKINSEY 7S MODEL

Let’s look at the different elements of the McKinsey 7S Model in more detail.
1. Structure
This is how the organization is set up for decision-making, ownership, and leadership. It includes hierarchy,
the chain of command, and accountability between role players.
• How is our organization organized?
• How are reporting and working relationships structured (hierarchical, flat, silos, etc.)? Who reports
to whom?
• How are our employees aligned with the strategy?
• How do our teams align and collaborate on shared goals?
 • What is our process for making decisions? Is it through centralization, empowerment,
decentralization, etc.?
• How does the organization share information (formally and informally)?

2. Strategy
The business’s approach to strategic planning and executing actions that ensure success, sustainability, and
competitive advantage.
• How should we proceed to resolve the specific business problem?
• What is our strategy and its priorities?
• How will we achieve our strategic objectives?
• How do we compete in the market? What are our competitive capabilities?
• How does the organization respond to changes in customer demand or the business environment?

3. Systems
Systems refers to the processes, infrastructure, and workflows established and utilized within the
organization.
• Can we execute the strategy with the existing business system or do we have to develop a new one?
• How do we track progress and performance?
• What internal processes and guidelines do we have in place to stay on track?

4. Skills
Skills are the competencies and capabilities of people within an organization that help it reach business goals
and objectives.
• What are our strongest skills within the organization? What are our weaknesses?
• How are we going to fill the skill gap? Which skills are required?
• Is the current employee's skill set sufficient for the job?
• How do we monitor, assess, and improve skills?

5. Style
Style is the way and manner in which people in the organization operate and interact. This includes
interpersonal business relationships, management styles, and codes of conduct.
• What leadership style and cultural qualities will help us to achieve a strategic objective?
• What is our current management approach?
• How are our employees respond to it?
6. Staff
Staff encompasses human resources and talent management related to company decisions, like hiring,
training, retention, and incentives.
• Is there anything we can do to support the growth of our team members?
• What are the current staffing needs?
• Are there any gaps in required capabilities or resources?
• What is our plan for addressing those needs?

7. Shared Values
These are the common objectives and values that help form an organization’s culture and align the other
elements within the organization. In and outside of your organization, they influence employee, customer,
and work experiences.
• What principles help us to achieve our goals?
• What makes us do what we do in the way we do it?
• What is our vision for the future? What is our mission to get there?
• What are our core values? How are we incorporating them into daily activities?

HOW TO USE THE MCKINSEY 7S MODEL? (IN 7 STEPS)

1. Analyze each component of the 7S Model
Here’s how you should take it step-by-step:
1. Start in the middle and analyze Shared Values. This step should help you to identify if you have a
clear understanding of where your company wants to be in the future.
2. Move into the Hard elements (Strategy, Structure, and System).
3. Finish with Soft Elements (Skills, Staff, and Style).

2. Identify areas that are misaligned with your vision and strategy
Review your findings and use them to find gaps and inconsistencies in the organization. Create a list of these
existing issues.
Additionally, speak to other key stakeholders and get their opinions on different business areas and
processes in your organization.

3. Define the desired state

You’ll then need to identify and articulate the organization's ideal alignment. Go through each “S” and use
this question: “What do we need to change in each element so we can execute our strategy?”.
This will likely require additional research and consultations with external experts to understand what an
optimal organizational design can look like and the possible obstacles that might stand in its way.
Remember, your “ideal” state should be informed by your company’s long-term strategic goals,
conversations with role players, and other internal analyses. Once you’re done, review everything and
ensure it aligns with your company’s vision and strategy.
4. Prepare your change management plan
Analysis of the 7S Model holds no value if you don’t map out a change management action plan. Your
organization needs a clear roadmap to get where it needs to be. Without it, you will either miss growth
opportunities or continue to be stagnant.
As part of this step, clearly define your strategic objectives, key projects or initiatives, and KPIs. Co-create
an action plan with the owners who will be responsible for executing it. This collaborative approach is
essential if you want to get buy-in and maintain momentum.
Strategic planning can be challenging depending on your organization's size and existing processes.

5. Execute your plan

Now it’s time to turn your plans into reality. Execution is the most crucial step in the change process.
Getting it right will result in impactful changes and help your organization reach important milestones.
Getting it wrong will mean delays, lackluster outcomes, and failure. But, strategy execution in a complex
business environment can be tricky. Especially if you don’t have the right tools to align efforts, ensure
accountability, and manage change initiatives.

6. Review your progress against set targets

Monitoring progress is vital if you want your change initiative to have maximum impact. Continually
review the performance of your teams and projects to ensure your organization is constantly aligned and on
track.

7. Adapt your plans and strategy if needed

Any good strategy will change, iterate, and adapt. Don’t be afraid to change your plans and approach as you
progress. Using insights, knowledge, and new information to improve your approach is important. Plans
must be adjusted or refocused as your organization progresses toward its goals.

Advantages of the Model

• It enables different parts of a company to act in a coherent and “synced” manner.
• It allows for the effective tracking of the impact of the changes in key elements.
• It is considered a longstanding theory, with numerous organizations adopting the model over time.

Disadvantages of the Model

• It is considered a long-term model.
• With the changing nature of businesses, it remains to be seen how the model will adapt.
• It seems to rely on internal factors and processes and may be disadvantageous in situations where
external circumstances influence an organization.
 CASE: MCKINSEY 7S Model: McDonald’s

Strategy
Cost leadership has been the age-old strategy of McDonald’s. The company strives to offer a wide range of
items to its customers at the lowest possible price. Apart from this, McDonald’s sets SMART goals to achieve
its short-term and long-term vision, and these goals are clearly communicated to all employees to ensure that
everyone is on the same page.

Structure
Because McDonald’s is present in dozens of countries and has such a huge business, one may think that the
company has a strict hierarchical structure. However, that is not the case. The company has a flat structure and
the manager of each outlet usually manages assistants and employees. Even though some managerial levels
are present, all employees work as a team and have easy access to senior leadership if needed.

Systems
From sales and marketing to operations and supply chain management, McDonald’s has some of the most
efficient systems in the world. In fact, the company’s systems deserve a separate article of their own. Also,
they constantly innovate to make their systems better. For instance, one of the company’s recent endeavors
was to reduce the drive-through order time by 30 seconds.

Shared values
McDonald's core values are: Serve, Inclusion, Integrity, Community, and Family. The aim behind living with
these shared values is to be able to have a high level of integrity, serve a wide range of customers, hire
employees from different backgrounds and encourage teamwork, and finally, give some profits back to the
community.

Skills
McDonald’s pays special attention to skills, training and workshops are regularly held to ensure that staff is
able to provide flawless service to customers.

Style
The leadership style at McDonald’s is participative. Seniors engage with employees from different levels and
ask them to share their feedback to improve strategy and operations or to identify and resolve any conflicts.

Staff
The company is the world’s second-largest restaurant chain by revenue and employs over 200,000 people
worldwide. The McDonald’s team is a global family and believes in diversity and acceptance, and that is the
reason why people from different backgrounds happily work for the company.