The McKinsey 7S Model: Building an Integrated Small Business Planning Process and Executing Against It – Begin with the End in Mind

Richard Duffy
Richard Duffy in SAP Business One, Planning, Best Practices, Strategy November 14, 2017

This is a follow-up to our recent webcast: Aligning Your Strategy and Systems to Drive Results. While this presentation was geared towards our ONE.Source Community for SAP Business One, the content was mostly product-agnostic and has general application for small and midsized businesses, regardless of the technology platform you may use.

If you missed the live session, you can access this presentation on demand.

As we covered in the webcast, the primary success factor in this process is to start with a view of the overarching business goals. In the McKinsey 7S Process we covered, these are also known as your Superordinate Goals and all the other components of the business are tied to these goals. 

Next, you look at the other dimensions and how well they are aligned. To help you to get started in the process, I have pulled together this information for you from a site I subscribe to (and recommend) called MindTools.

7S Checklist Questions

Utilising these questions from the 7S framework, you can better understand your current situation and complete a gap analysis on what steps you need to take to reach your desired point.

First, use these questions to analyze your current situation (Point A) , and then repeat the exercise for your proposed situation (Point B). 

Strategy:

  • What is our strategy?
  • How do we intend to achieve our objectives?
  • How do we deal with competitive pressure?
  • How are changes in customer demands dealt with?
  • How is strategy adjusted for environmental issues?

Structure:

  • How is the company/team divided?
  • What is the hierarchy?
  • How do the various departments coordinate activities?
  • How do the team members organize and align themselves?
  • Are decision making and controlling centralized or decentralized? Is this as it should be, given what we're doing?
  • Where are the lines of communication? Explicit and implicit?

Systems:

  • What are the main systems that run the organization? Consider financial and HR systems as well as communications and document storage.
  • Where are the controls and how are they monitored and evaluated?
  • What internal rules and processes does the team use to keep on track?

Shared Values:

  • What are the core values?
  • What is the corporate/team culture?
  • How strong are the values?
  • What are the fundamental values that the company/team was built on?

Style:

  • How participative is the management/leadership style?
  • How effective is that leadership?
  • Do employees/team members tend to be competitive or cooperative?
  • Are there real teams functioning within the organization or are they just nominal groups?

Staff:

  • What positions or specializations are represented within the team?
  • What positions need to be filled?
  • Are there gaps in required competencies?

Skills:

  • What are the strongest skills represented within the company/team?
  • Are there any skills gaps?
  • What is the company/team known for doing well?
  • Do the current employees/team members have the ability to do the job?
  • How are skills monitored and assessed?

7S Matrix Questions

Now that you have answered these questions, you can examine where there are gaps and inconsistencies between the different elements. Don't forget that you can use this process to look at either your current or your desired organization.

You can download the McKinsey 7S Worksheet from MindTools (again, a site I subscribe to and highly recommend), which contains a matrix that you can use to check off alignment between each of the elements as you go through the following steps. Here's a hint: answer with a Yes/No or Does Not Meet, Meets, Exceeds option before drilling down to the details:

  • Start with your Shared Values: Are they consistent with your structure, strategy, and systems? If not, what needs to change?
  • Then look at the hard elements. How well does each one support the others? Identify where changes need to be made.
  • Next look at the other soft elements. Do they support the desired hard elements? Do they support one another? If not, what needs to change?
  • As you adjust and align the elements, you'll need to use an iterative (and often time consuming) process of making adjustments, and then re-analyzing how that impacts other elements and their alignment. The end result of better performance will be worth it.

Hopefully, like most planning processes, a lot of the value can quickly be derived from asking and thinking about the answers to these strategic questions.

More to Come from ONE.Source

In addition to my SAP Business One focus, I will do my best to add these types of business strategy topics into our ONE.Source community conversation in the future.

I also would love to hear what questions you may have, as well as what topics most interest you. The best way to let us know is by asking your questions in our community forum; I am moderating this space and we will use your questions to help shape our curriculum.

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