What is the 7-S Framework?

The 7-S Framework of McKinsey is a management model that describes 7 factors to organize a
company in a holistic and effective way. Together these factors determine the way in which a
corporation operates. Managers should take into account all seven of these factors, to be sure
of successful implementation of a strategy. Large or small. They're all interdependent, so if you
fail to pay proper attention to one of them, this may affect all others as well. On top of that, the
relative importance of each factor may vary over time.

Origin of the 7-S Framework.

The 7-S Framework was first mentioned in "The Art Of Japanese Management" by Richard
Pascale and Anthony Athos in 1981. They had been investigating how Japanese indu stry had
been so successful. At around the same time that Tom Peters and Robert Waterman were
exploring what made a company excellent. The Seven S model was born at a meeting of these
four authors in 1978. It appeared also in "In Search of Excellence" by P eters and Waterman, and
was taken up as a basic tool by the global management consultancy company McKinsey. Since
then it is known as their 7 -S model.

The meaning of the 7 Ss

Shared Values (also called Super ordinate Goals).

The interconnecting cente r of McKinsey's model is:
Shared Values. What does the organization stands
for and what it believes in. Central beliefs and
attitudes.

Strategy
Plans for the allocation of a firms scarce resources,
over time, to reach identified goals. Environment,
competition, customers.

Structure
The way in which the organization's units relate to
each other: centralized, functional divisions (top -down); decentralized; a matrix, a network, a
holding, etc.

Systems
The procedures, processes and routines that characterize how the work should be done: financial
systems; recruiting, promotion and performance appraisal systems; information systems.

Staff
Numbers and types of personnel within the organiza tion.

Style
Cultural style of the organization and how key managers behave in achieving the organization's
goals. Compare: Management Styles.

Skills
Distinctive capabilities of personnel or of the organization as a whole.

Strengths of the 7-S Model.

1. Diagnostic tool for understanding organizations that are ineffective.
2. Guides organizational change.
3. Combines rational and hard elements with emotional and soft elements.
4. Managers must act on all Ss in parallel and all Ss are interrelated.
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Most of us grew up learning about 'the 4Ps' of the marketing mix: product, price, place, promotion. And this
model still works when the focus is on product marketing. However most developed economies have
moved on, with an ever -increasing focus on service businesses, and therefore service marketing.

To better represent the challenges of service marketing, McKinsey developed a new framework for
analyzing and improving organizational effectiveness, the 7S model:

The 3Ss across the top of the model are descr ibed as 'Hard Ss':
• Strategy: The direction and scope of the company over the long term.
• Structure: The basic organization of the company, its departments, reporting lines, areas of expertise,
and responsibility (and how they inter -relate).
• Systems: Formal and informal procedures that govern everyday activity, covering everything from
management information systems, through to the systems at the point of contact with the customer (retail
systems, call centre systems, online systems, etc).

The 4Ss across the bottom of the model are less tangible, more cultural in nature, and were termed
'Soft Ss' by McKinsey:

• Skills: The capabilities and competencies that exist within the company. What it does best.
• Shared values: The values and beliefs of the c ompany. Ultimately they guide employees towards 'valued'
behavior.
• Staff: The company's people resources and how they are developed, trained, and motivated.
• Style: The leadership approach of top management and the company's overall operating approach.

In combination they provide another effective framework for analyzing the organization and its activities. In
a marketing-led company they can be used to explore the extent to which the company is working
coherently towards a distinctive and motivating p lace in the mind of consumer.

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