The McKinsey 7S Model can be used for analysing a firm’s stance and internal readiness for change by focusing on 7 key internal and interrelated elements that are critical to achieving success. These elements are split into Hard and Soft “S”. The model is based on the premise that for an organization to perform well and achieve competitive advantage, these 7 elements must be constantly aligned and mutually reinforcing.
The hard "S" elements are much easier to identify and manage. They are as follows:
Strategy - This refers to the overall direction of the business and its approach to achieving competitive advantage.
Structure - Refers to how the business divisions and units are organised. The organisational chart provides insight into roles, responsibilities and reporting relationships. Examples of how organisations are arranged include functional, projectized and matrix organisations, to mention a few.
Systems - Refers to systems that are in place (processes, procedures, routines and Information systems) to govern how work is done. It is usually the main focus during organisational change projects.
The soft "S" elements on the other hand, are harder to manage but are more likely to lead to competitive advantage for organisations. They are as follows:
Shared Values - These refer to the principles, norms and values that are considered acceptable within the organisation. What does the organisation believe in? What is the mission and vision of the organisation?
Style - Refers to the leadership & interaction style of management-level employees and how they behave to achieve their objectives.
Staff - Refers to the number and diversity of personnel available in the organisation.
Skills - Refers to the capabilities of personnel and the organization as a whole, which affects the quality of work delivered.
For any change introduced in an organisation, the model may be used to understand how organisational elements are related and identify which elements need to be realigned. The key message behind the model is that all these elements are inter-dependent. Consequently, making changes to one element may have an effect on the other elements. Other elements may resist the change and strive to continue as usual. For example, any change to organizational strategy can affect existing systems, staff and shared values. Any change that affects any of these elements should thus be implemented with the whole picture in mind to ensure a successful outcome.