McKinsey’s 7S Framework – Strategy
In our overview of McKinsey’s 7s Framework we discussed how consultants Tom Peters and Robert H Waterman, from the global management consulting company McKinsey, developed the principles of the 7S model, with three “hard” and four “soft” elements.
Today we are focusing on one of the three “hard” factors in the Framework: Strategy.
How is Strategy defined within the Framework?
Strategy is the planning an organisation carries out in order to build and maintain advantage over the competition. Strategic thinking requires a company to respond to changes in the business environment in which it operates.
Having a clear Strategy in place helps companies to future proof their business and manage change.
How does Strategy relate to the other elements of the 7S Framework?
Peters and Waterman’s original research began with an examination of the relationship between Strategy and Structure, and the influence they brought to bear on each other.
In the 7S Framework, this was expanded to examine how Strategy works alongside Structure and the other “hard” element of this model, Systems, as well as the four “soft” elements: Staff, Skills, Style and Shared Values.
For a business Strategy to be successful, it should be aligned across an organisation with the other six factors.
Establishing an effective Strategy
When looking at Strategy, an organisation should evaluate its current approach and how effective it is, and then look at ways of improving it by considering:
- What the objectives of the organisation are and how they might be achieved
- How to handle competition and sustain competitive advantage
- What to do if customer demands fluctuate
- Whether there are any environmental issues that might influence results
Following the principles of McKinsey’s 7S Framework, the issues above should not be considered purely from a strategic point of view; they should be analysed alongside the other six elements of the business model, to ensure that all seven elements are in alignment.
A good approach is to:
- Use the 7S Framework to model how the organisation is currently operating
- Review the seven elements and create a model that represents a potential future state, with all of the elements in alignment and working towards a common goal
- Compare the two models and identify the differences
- Create a long-term plan to improve the organisation’s Strategy by addressing these differences
Since the 7S Framework was introduced, it has proved a popular model for businesses across the globe.
While many organisations have business plans in place, they can increase their chances of success by developing a Strategy that is in alignment with the other six elements of the 7S Framework.
We will consider the other six elements of McKinsey’s 7S Framework in future blogs.