MCKINSEY 7S MODEL

HISTORY

It was first mentioned

in "The Art Of
Japanese
Management" by
Richard Pascale &
Anthony Athos in
1981.

At around the same

time, Tom Peters &
Robert Waterman
were exploring what
made a company
excellent.

The 7 S model was

born at a meeting of
these four authors in
1978

It was taken up as a
basic tool by the
global management
consultancy company
McKinsey.

What is the 7S Framework?

Its a management model that describes 7 factors to organize a company in an holistic & effective
Its a management model that describes 7 factors to organize a company in an holistic & effective
way
way
Together these factors determine the way in which a corporation operates
Together these factors determine the way in which a corporation operates
Managers should take into account all 7 of these factors, to be sure of successful implementation
Managers should take into account all 7 of these factors, to be sure of successful implementation
of a strategy
of a strategy
Large or small, the strategies are all interdependent, so if you fail to pay proper attention to one of
Large or small, the strategies are all interdependent, so if you fail to pay proper attention to one of
them, this may effect all others as well.
them, this may effect all others as well.

McKinsey 7S Framework

The model is most often used as a tool to assess and monitor changes in the
internal situation of an organization.

Why shared values in the middle of the model?

The 7s Elements

Strategy

Structure

Systems

7-S CHECKLIST QUESTIONS

7-S CHECKLIST QUESTIONS

HOW TO USE THIS TOOL?

STARBUCKS MCKINSEY 7S FRAMEWORK

Hard Elements

STARBUCKS MCKINSEY 7S FRAMEWORK

Soft Elements

USES OF MCKINSEY 7S MODEL

BENEFITS OF THE MCKINSEY 7S MODEL

DRAWBACKS OF MCKINSEY 7S MODEL

PROCESS FOR APPLYING THE TECHNIQUE

PROCESS FOR APPLYING THE TECHNIQUE

Aligned strategic fit

Partially aligned fit

Mis-aligned fit

PRIVATIZATION OF KENYA AIRWAYS

19

Privatization of Kenya Airways

created a strategic alliance with
KLM Royal Dutch Airlines

The commercialization
process began

1991

1994

The airline recorded

its first profits.

1995

1996

the Kenyan Government sold 26% of its

stock to KLM, and most of the remainder
of its stock to the Nairobi Stock
Exchange, leaving only a 22% minority
ownership block held in the airline.

BEFORE

Strategy
Lack of strategy.
No market direction.
Mainly unprofitable.
Unreliable and rarely on time.

Shared Values
Not suited to commercial profit-driven firm.
Very little attention paid to managing firmwide human factors.

AFTER
Strategy
Goal to achieve world-class standards in service delivery,
product quality and performance.
Deliver profitability consistently.
Be the airline of choice in Africa.
Anticipate industry change factors.
Operate a modern fleet of aircraft.
Create alliances with other respectable airlines.

Shared Values
Identify needs of internal staff, customers and travel agents.
Change culture to be service-oriented by taking every
employee through customer service training program.
Increase shareholder value.
Aim to become Africas leading airline.
Keep product offerings consistent and of the highest quality.
22

AFTER

BEFORE

Structure
Bloated workforce.
Bureaucratic.
Lack of accountability in governance

Structure
Workforce reduction.
Managers expected to be responsible and
accountable for their units.
De-centralized with offices or agents in every region
the airline serviced.

Systems
Lack of measurement for operations.
Imprecise financial reporting.
Lack of accountability.
Technical skills misused and underutilized.
No means to measure productivity.
Computer systems not sufficient to sustain
business.

Systems
New financial control and accountability systems.
New budget planning and reporting systems.
Creation of IT department.
New program to continuously improve operations
and reliability.

BEFORE

AFTER

Style
Politically influenced.
CEOs were rarely held the station longer than a
couple of years and lacked adequate time to
implement strategies.

Style
Profit-oriented culture.
Hiring of upper management with airline
experience.
Executives expected to re-vamp budget planning,
sales and marketing, control and reporting systems.

Staff
Employees were friends and relatives of
politicians.
More employees were employed than needed.
Unused talent and energy at almost every level.
Low standards of customer service.

Staff
Reduction of staff.
All staff get customer service training.
Increased productivity.
All staff expected to be responsible
accountable

Skills
Large market share of regional routes.
Decent share of international routes.
Technical skills misused and underutilized.
Weak sales and marketing.

Skills
Efficient use of fleet.
Strategic alliance with KLM.
Stakeholder driven culture.
Attracting business class customers.
Consistently profitable

and

Key points
The 7-S framework of McKinsey is a Value Based Management (VBM) model that describes how
one can holistically and effectively organize a company.
The McKinsey 7Ss model is one that can be applied to almost any organizational or team
effectiveness issue.
Inconsistency between some of the elements can be identified by this classic model.
The McKinsey 7S model can be applied to elements of a team or a project as well.