Table of Content
Introduction to McKinsey 7s Model
The McKinsey 7s Model is one of the important strategic planning and management tools that can be used by organizations to consider organizational design while managing business operations. The focus of various strategic planning models such as SWOT Analysis, OKR Model, Balanced Scorecard, Strategy Map, etc. is on achieving their business goals and objectives but do you know how well the organization is positioned to achieve various goals and objectives?
As a result of it McKinsey 7s Model was given by Tom Peters and Robert Waterman in late 1970 to identify the internal elements of the organization and to align them with various business objectives to ensure business success. The seven elements of the McKinsey 7s Model include hard and soft elements. The hard elements include Structure, Strategy, and Systems whereas the soft elements include Shared Values, Skills, Styles, and Staff.
The need for the McKinsey 7s Model
The McKinsey 7s Model can be used by the organization in various situations as it is useful to examine the internal effectiveness of the organization and to determine how various parts of the organization work together to achieve the business objectives. The use of this model also helps to identify the areas which are not effectively aligned by looking at structure, strategy, systems, style, skills, etc. It also helps to determine the optimal design of the organization which then allows the company to set realistic goals and achieve various business objectives. Not just this, the key benefit of using this tool is that it helps to decide where the changes can be made and then implement the changes by bringing change in the internal elements of the organization. Hence, the use of this strategic planning tool helps to improve the overall performance of the organization and determine the best ways for achieving the business goals and implementing the proposed strategy.
How to apply the McKinsey 7s Model?
To use this McKinsey 7s Model, you first need to look at the shared values component of the organization and determine its consistency with the structure, strategy, and systems. If the shared values component is not aligned with the structure, system, and strategy element then you need to determine what needs to change.
The second step is to look at the hard elements which include structure, strategy, and system to determine how well each element supports the other and to determine where changes are required to be made?
Looking at hard elements is not enough and thus, the third step is to look at the soft elements which include style, staff, skills, and shared values to determine if the soft element supports the hard elements. Do the soft elements support one another and what change needs to be made?
After considering the areas of alignment and the change that needs to be implemented, you need to determine the optimal design for the organization to achieve the set goals. While making the optimal design for the organization, you also need to look at the market and industry factors within the company to determine what is working in the industry?
McKinsey 7s Model real example
Let us highlight the Coca-Cola McKinsey 7s Model here to present a real world implication of this planning model.
The vision of Coca-Cola is to create a brand and drinks that the people love and that helps to refresh the body and spirit of the individuals. Coca-Cola’s “2020 Vision and Roadmap for Winning Together” shares 6Ps which include profit, people, portfolio, partners, productivity, and the planet.
Coca-Cola aims to achieve this shared vision through other S of the McKinsey 7s Model.
To achieve its shared vision, Coca-Cola has implemented diverse strategies which include brand building, resource allocation, asset optimization, acquisition of Chinese and other Asian brands to establish its market presence in Asia pacific regions, innovation, managing bottling facilities, sustainability strategies, etc.
The organizational structure of Coca-Cola is designed in a manner that ensures better fulfillment of the changing needs of the customers. Coca-Cola has implemented a streamlined international structure to effectively manage its operational units. The decentralized organization structure is adopted at Coca-Cola which helps to enable speed, agility, and better management at the workplace. Moreover, the head office division of Coca-Cola is responsible for providing guidance to other divisions. The top managers of Coca-Cola shape the 6 Ps of the company and ensure that all the other executives are undertaking various measures to ensure compliance with all the values and to achieve the organizational vision.
Coca-Cola operates through multiple local channels and the bottling partners of Coca-Cola manufacture, package, and distribute the final branded Coca-Cola products to the customers. This helps Coca-Cola to achieve its 6Ps vision. Along with this, the day-to-day systems including human resource management, processes, financial systems sustainability management practices and focus on protecting the planet also help to achieve the organizational vision and values.
The leadership style adopted by James Quincey is a participative style where the leader focuses on promoting inclusion, empowerment, and accountability. Further, James Quincey has created a forward-looking culture through the development of collaborative teams.
Coca-Cola has implemented effective staff management processes to keep the employees motivated towards higher performance outcomes. Further, various financial incentives are also provided to the Employees to encourage them towards the business objectives and improve overall performance outcomes.
Considering the above strategies and initiatives undertaken by Coca-Cola, it is determined that Coca-Cola needs to improve skills among the staff members to achieve its vision and objectives. Coca-Cola has hired more than 700000 employees around the world but to achieve its 2021 vision including 6PS, the company needs to improve the overall skill base of its employees with a focus on innovation and better allocation of resources and research and development.
Thus, it is found that the McKinsey 7s Model is one of the important strategic planning models that can be used to create interlinks between various elements of the organization and to improve the overall performance outcomes of the organization through better organizational design.