MCKINSEYS 7S FRAME WORK

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. Determine how best to implement a proposed strategy.

The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:

HARD STRATEGY STRUCTURE SYSTEM

SOFT SHARED VALUES SKILLS STYLE STAFF

"Hard" elements are 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.

"Soft" elements, 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. The way the model is presented below depicts the interdependency of the elements and indicates how a change in one affects all the others.

Let's look at each of the elements specifically: Strategy: The plan devised to maintain and build competitive advantage over the competition. Strategy of Peerless is very simple Customer is king. From the inception, customer centricity has been our focus. Business numbers like AUM and investor base is a consequence of this broad strategy. Getting more granular, we are focusing on creating new customers in untapped geographies through vernacular delivery. We have more than 40% of our AUM in retail oriented schemes from non-top15 towns, which is also the focus of regulator. This has been our strategy since inception. On the institutional side, our strategy is to provide few and appropriate solutions of cash management and investments to customers. We do not believe in launching unnecessary products to confuse customers. Thus far, in the last 3 years, we have Launched only seven products and all of them are doing extremely well. We have invested more than Rs 30 crore in the business and we have already reached the break-even in the last quarter. We shall reach a full annual break-even in the next year (2013-14). Peerless General Finance and Investments (PGFI) is also infusing an additional Rs 50 crore to make the capital Rs 100 crore. This makes our operations stronger and solid. PGFI has supported mutual fund operations at every step and will do everything to continue this support. Infusion of capital is one of the support measures.

 Structure: The way the organization is structured and who reports to whom.

BOARD OF DIRECTORS

MD & CEO

HEADMARKETING/EAST ZONE

SALES MANAGER

SALES & OPERATION TEAM

Systems: The daily activities and procedures that staff members engage in to get the job done. All transactions can be classified into financial and non-financial transactions. All Investor financial and non-financial transactions are received at this center and are sent to the Registrar and Transfer Agent which is a company called CAMS Pvt. Ltd. The financial transactions include new mutual fund applications by new or existing investors, redemptions of investments and switching from one scheme to another. The non-financial transactions include change of address, change of bank details, change of broker etc. An important difference between the two categories of operations is that Financial Transactions have to be punched and non financial transactions do not have to be punched. Each AMC has a punching machine which is used to provide the time at which the transaction is processed. All applications received before 3 pm are considered to be of same day. For these transactions, the current days NAV becomes applicable. This NAV value is updated at 8 pm on the same day. Any application received after 3 pm is considered as next days transaction. The output of the Punching machine is a Print line with four items: the name of the AMC, current date, current time and punch number. Shared Values: Called "super ordinate 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. Style: The style of leadership adopted. Staff: The employees and their general capabilities. Skills: The actual skills and competencies of the employees working for the company.