The McKinsey Model (7Ss model)

-what are the key issues to address when building organisational capability?-

The premise behind the McKinsey model is that for organizations to function effectively they have to rely on the interdependence of the seven variable structure, strategy, staff (people), style (management), systems (procedures), shared values (culture or guiding principles) and skills (corporate strengths). The seven variables are classified as:

Hardware variables: strategy, structure Software variables: style, systems, staff, skills and shared values

The major contribution of the framework is perhaps the attention it draws to the less tangible and visible aspects of organizational systems. As explained by Peter and Waterman (1982) in their book In Search of Excellence: In retrospect what our framework has really done is to remind the world of professional managers that soft is hard. It has enabled us to say, in effect, all that stuff you have been dismissing for so long as intractable, irrational, intuitive, informal organization can be managed. Clearly, it has as much or more to do with the way things work (or dont) around your companies as the formal structures and strategies do. This was further explained by Waterman a al. (1980) in an article: Our assertion is that productive organization change is not simply a matter of structure, although structure is important. It is not so simple as the interaction between strategy and structure, although strategy is critical too. Our claim is that effective organizational change is really the relationship between structure, strategy, systems, style, skills, staff, and something we call superordinate goals. The model, which is illustrated in Fig. 1, is also referred to as happy atom. The model reflects the following characteristics:

Multiplicity of factors: all influence how organizations behave Interconnectedness of variables: progress can only be achieved by giving attention to all areas. All seven variables act as a driving force: at particular points in time, one or more of the 7Ss will emerge as the most critical variable(s).

Origins of the McKinsey model Many researchers have commented on the inadequacies of structure as a way to represent a dynamic organization. The analogy often drawn is that a picture of the thing is not the real thing (i.e. structure is not organization).

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As a result of this the McKinsey group set up a task force to investigate the problems of assessing organizational effectiveness, back in 1977. The team was also encouraged to involve many of their existing clients in the process. The team spent nearly 2 years trying to develop an alternative framework. The 78s model was developed, tried in teaching and workshop situations and also piloted on a small number of companies. The model was found to work, as a diagnostic tool for assessing organizations competitive performance, and also helps managers to formulate action plans and improvement strategies. Meaning of the 7 Ss: 1. Strategy: The plan leading to the allocation of resources. 2. Shared values: The goals shared by all employees. 3. Style: The management style of the organisation. 4. Structure: The organisational map/chart/organogram. 5. Skills: The strengths and capabilities of the employees. 6. Staff: The people employed. 7. Systems: Procedures, guidelines, and control mechanisms. The following is an example of how the above could be used to build an innovative R&D organisation: 1. Strategy: Is there a product development strategy, which defines types of projects, selected and resources required? 2. Style; Is there top management commitment and patience for new product development? 3. Shared values: How much belief, enthusiasm, commitment and respect is there for innovative activity? 4. Structure: What lines of authority and responsibility are used for innovative activity? 5. Skills: What training and development are there for specialist knowledge? 6. Staff: What people involvement, empowerment, teamwork, learning are being applied to product development? 7. Systems: What procedures, guidelines and control mechanisms are used to manage various stages of product development?
Acknowledgement: Innovation or innovativeness? Results from a benchmark study: By Zari & Mohamed, Total Quality Management, 1994. Datebase: Unisa SBLs Business Source Premier.

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Unisa SBL: MDP Course Strategy Implementation