Managing Change Toolkit

Develop a Change Strategy

McKinsey 7S Model

This model was developed in the 1980's by Robert Waterman, Tom Peters and Julien Philips  whilst working for McKinsey and originally presented in their article " Structure is not Organisation". To quote them:

"Intellectually all managers and consultants know that much more goes on in the process of organising than the charts, boxes, dotted lines, position descriptions, and matrices can possibly depict. But all too often we behave as though we didnít know it - if we want change we change the structure.

Diagnosing and solving organizational problems means looking not merely to structural reorganization for answers but to a framework that includes structure and several related factors."

The 7S Model which they developed and presented became extensively used by mangers and consultants and is one of the cornerstones of organisational analysis.

McKinsey 7S model

Essentially the model says that any organisation can be best described by the seven interrelated elements shown above:

Strategy

Plans for the allocation of a firm's scarce resources, over time, to reach identified goals. Environment, competition, customers.

Structure

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

Systems

The procedures, processes and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems.

Skills

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

Staff

Numbers and types of personnel within the organization.

Style

Cultural style of the organization and how key managers behave in achieving the organizationís goals.

Shared Value

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

 

However the model is more than simply a list. Key Points are:

  1. The top 3, strategy , structure and systems, are the hard elements. The bottom 4, skills, staff, style, and shared values are the soft elements.
  2. At that time, any organisational study focused on the top "hard" elements and ignored the bottom "soft" elements.
  3. The current view is to focus on all 7, accepting that for each business or enterprise, two or three will be the VITAL ones.
  4. The key point is that all the elements are all inter-dependant. Changes in one will have repercussions on the others. Thus introduction of new systems will certainly affect skills, and may well effect structure, style and staff. It could even have an impact on strategy. Similar repercussions occur with decentralisation.
  5. If you just try to change one element on its own, the other element may well resist the change and try to maintain the status quo.
  6.  In this sense, any change in organisation is best seen as a shift in the whole picture.

 Waterman Jr., Robert H., Peters, Thomas J., and Julien R. Phillips. 1980. "STRUCTURE IS NOT ORGANIZATION." Business Horizons 23, no. 3: 14