The McKinsey 7S framework

The McKinsey 7S framework describes an organisation through strategy, structure, systems, shared values, staff, skills and style. Its central claim is that performance depends on the alignment and mutual reinforcement of all seven, not on the formal organisation chart alone.

When to use it

• Diagnose and improve overall organisational performance.

• Translate a chosen strategy into internal changes.

• Locate sources of difficulty during transformation.

• Realign people and activities after a merger, leadership change or redesign.

Origins

Tom Peters, Robert Waterman, Anthony Athos and Richard Pascale developed the framework through discussions in the late nineteen-seventies. Their work challenged a management focus dominated by formal structure and added the behavioural, cultural and capability dimensions through which work actually happens. A Peters, Waterman and Phillips article introduced the model widely in 1980, and Peters and Waterman’s In Search of Excellence extended its influence in 1982.

What it is

Three elements—strategy, structure and systems—are often called ‘hard’ because management can describe and alter them relatively directly. Shared values, skills, staff and style are ‘soft’: less tangible, slower to change and deeply affected by behaviour. The labels do not imply that hard factors are more important.

Use the framework to understand a current organisation, anticipate problems created by a proposed change or design a coordinated implementation. Any change in one element can create misalignment elsewhere.

How to use it

Define the seven elements with evidence:

1. Strategy: the choices and actions intended to build and sustain advantage.

1. Structure: the formal division of responsibility, authority and reporting relationships.

1. Systems: the formal and informal processes governing daily work, including budgeting, hiring, performance management and information technology.

1. Shared values: the beliefs about purpose and appropriate behaviour—called ‘superordinate goals’ in the original model—that sit at the centre of organisational culture.

1. Style: the behaviour leaders model and the way they relate to others.

1. Staff: the people, roles, motivations and workforce composition.

1. Skills: the practical capabilities held by individuals and the organisation collectively.

Compare the current and required state for each element, then map dependencies. A hotel chain pursuing exceptional service, for example, may need service-oriented recruitment, capability development, leaders who model hospitality, customer-information systems and incentives that reward the desired experience. Changing only the strategy statement will not alter delivery.

Shared values sit at the centre because they influence every other element and normally change through accumulated decisions and behaviour rather than direct instruction. Sequence the interventions so people can understand and absorb them. One programme may focus visibly on skills or systems, but its designers should still check consequences across the complete framework.

Top practical tip

Use 7S as an alignment checklist at the beginning and end of a change plan, then investigate the few elements and dependencies that matter most.

Top pitfall

Do not launch simultaneous initiatives for every element. Maintain a whole-system view while phasing change into a sequence people can execute.

Further reading

• Waterman, R.H., Peters, T.J. and Phillips, J.R. (nineteen eighty). “Structure Is Not Organization.” Business Horizons.
• Peters, T.J. and Waterman, R.H. (nineteen eighty-two). In Search of Excellence. Harper & Row.