7s model case study example

McKinsey 7S Model Examples [6 Famous Companies]

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Can you tell how well your company is positioned to achieve its organization? Or do you know the elements that influence its ability to expand effectively? With the McKinsey 7S model, you can answer these and more questions about your organization.

In this article, we explore the McKinsey 7 S model with examples to give a better understanding of this model. We also recommend a one-stop tool to get you started in making your model. Let’s dive in.

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What Is the McKinsey 7S Model

The McKinsey 7S model is a tool that is used to analyze the organizational design of a company. This model aims to predict the effectiveness of the organization as it interacts with seven key elements. These elements include Structure, Strategy, Skill, System, Shared Values, Style, and Staff. This model is centered around the structure of the organization rather than the strategic aspects of change management. This makes it an effective tool for understanding the performance of a company.

Components of McKinsey 7S Model

The McKinsey 7S model is applicable in different situations where it helps in understanding the way various parts of the organization work together. The mode specifies the seven components that affect the effectiveness of the company. This makes it a useful tool to make decisions on future corporate strategy.

The seven components of the McKinsey 7S model can be classified as either hard or soft. Let’s start with the hard elements. These are the components of a company that are easily identified and influenced by the management. They include:

• Strategy: A well-curated business plan that allows a company to formulate its action plan . The structure is reinforced by the company’s values and visions to achieve a sustainable competitive advantage. The organization deploys the plan to remain competitive in its market and industry. Ideally, a company will come up with a long-term strategy that aligns perfectly with other elements of the model while communicating its objectives.
• Structure: This is the way a company is organized. It specifies issues of accountability relationships and chain of command in the organizational chart. The structure comprises the corporate hierarchy and its divisional makeup. It outlines how the operations function and interconnect, detailing the responsibilities of workers and management configuration.
• Systems: These are the technical and business infrastructure of the company. They establish workflow and decision-making chains. Systems also refer to the daily procedures and decisions that guide the standard operations of the company.

The next classification of the McKinsey 7 model is the soft elements. These are the more tangible and fuzzier elements that are influenced by corporate culture. They include:

• Shared values: The values, objectives, and mission of the organization. They determine the alignment of key elements that maintain organizational design. Shared values also refer to the commonly accepted norms and standards within the organization that influence the behavior of the entire staff. Usually, this is detailed in company guidelines that are presented to the staff.
• Skills: The competencies and capabilities of a company that allows employees to achieve the set goals and objectives. They comprise the capabilities and talents of the organizational staff, which determine the kind of achievements the company will accomplish.
• Style: This is the attitude of senior employees. It establishes a code of conduct through their symbolic decision-making and interaction, which in turn forms the management style of the leader. Style speaks to the approach and example that the management takes in leading the company.
• Staff: Comprises the decisions related to talent management and human resources of the company, including recruitment and reward systems. Staff are the personnel of the company, where their motions reside, how large the workforce is, as well as how they are trained and prepared for the job.

Explain McKinsey 7S Model with 6 Examples (Famous Companies)

To give you a better understanding of how the McKinsey 7S model functions, let’s have a look at the McKinsey 7S framework with company examples that have a perfect elaboration:

McKinsey 7S Model Example – Apple

Apple Inc. is the world's largest technology by revenue, and it is also ranked the biggest company by market capitalization globally. The following McKinsey 7S model for Apple demonstrates how the company has attained this position.

McKinsey 7S Model Example - McDonald's

McDonald’s Corporation is a multinational fast-food chain based in the United States. It was founded in 1940 as a restaurant and is now known for French fries, hamburgers, and especially Big Macs. The McKinsey Model for McDonald's is as follows:

McKinsey 7S Model Example – IKEA

IKEA produces primarily home furniture. Other products include home accessories and design ideas. The company is renowned for offering inspiration for big dream homes with small budgets. With a unique business structure, here is IKEA’s McKinsey 7S model:

McKinsey 7S Model Example – Tesla

Tesla is best known for its pioneering work in electric vehicles and sustainable energy solutions. The company's mission is to accelerate the world's transition to sustainable energy. They achieve this by producing a range of electric cars, battery energy storage systems, and solar energy products. Here is the McKinsey 7S model of Tesla.

McKinsey 7S Model Example – Pepsi

PepsiCo is the company that manufactures the carbonated soft drink, Pepsi. The company was originally created and developed in 1983 and has grown to become the second most valuable soft drink globally after Coca-Cola. The McKinsey 7S Model for Pepsi reveals its unique business structure.

McKinsey 7S Model Example – Nokia

Nokia Corporation is a multinational telecommunications company that is based in Finland. The company is renowned for consumer electronics and information technology. The company has faced challenges in its ability to adapt and stay competitive in the innovative mobile phone market. With its resistance to smartphone evolution and ineffective marketing strategies, the once-top phone manufacturer had a slow trend in recent years before introducing new products to remain relevant. The McKinsey 7S Model for Nokia is as follows:

Key Takeaway:  A McKinsey 7S Model Template and a One-stop Tool

 An effective McKinsey 7S model will help you analyze your company and identify any performance gaps. To ensure you are getting the right information, you need to include all the important information. The Boardmix McKinsey Model Template is a one-stop tool to get you started with this management model. It will help you map out what you need to do to achieve your business strategy. Simply sign up and start filling it out with appropriate information!

Creating McKinsey 7S Model on Boardmix: An Array of Engaging Features

Developing a comprehensive McKinsey 7S model can be made considerably efficient and collaborative with the variety of features offered by Boardmix Online Whiteboard. 

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Boardmix's online whiteboard presents an interactive interface to visualize and construct your McKinsey 7S model. The ability to draw, write, or annotate directly on the board makes it a dynamic tool for visually expressing complex management concepts.

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Boardmix's collaboration feature allows teams to work together simultaneously on the same McKinsey 7S model. This real-time interaction fosters brainstorming, immediate feedback, and seamless co-creation among team members.

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The drag-and-drop functionality of Boardmix enhances the flexibility of creating and managing elements of the McKinsey 7S model. It enables users to easily arrange, group, or reposition elements, making the entire process adaptable and user-friendly.

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Boardmix lets you enrich your McKinsey 7S model with various multimedia elements. Users can integrate relevant images, documents, or even videos directly onto their model. This capability aids in providing additional context and details for a more comprehensive understanding of the model.

AI-Enhanced Brainstorming

One of Boardmix’s unique features is its AI enhancement that aids in brainstorming sessions by suggesting related ideas based on user inputs. This can be particularly valuable while filling out the different components of the McKinsey 7S model, as it can offer fresh perspectives and insights.

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Enhancing Organizational Success: A Deep Dive into the McKinsey 7S Model with Real-Life Case Studies

• On : December 10, 2023

As organizations face constant challenges to adapt to an economy that is sinking, a consumer buying behavior that only data can understand, and cultural shifts, looking at what models empower organizations to greater success is a worthy use of time. Successful companies understand that the key to sustainable growth lies in aligning their internal elements effectively. One powerful tool that has proven its value in achieving organizational success is the McKinsey 7S Model. Developed by McKinsey & Company, this strategic management framework examines seven critical interdependent factors within an organization to create a cohesive and high-performing unit. The McKinsey 7S Model, has many elements with practical applications.

McKinsey 7s Strategy:

The first S in the McKinsey 7S Model represents the organization’s overarching plan and direction. A clear and well-defined marketing strategy is essential to guide decision-making, resource allocation, and market positioning. A prime example is Apple Inc., which revolutionized the technology industry by focusing on innovation, creating premium products, and building a strong brand identity. Their strategic approach has enabled them to consistently outperform competitors and dominate the market.

The second S denotes the organization’s design, including its hierarchy and reporting lines. A cohesive marketing team structure facilitates efficient communication, collaboration, and decision-making. Procter & Gamble (P&G) serves as a prime example. P&G’s matrix organizational structure enables seamless coordination between various brands and functions, fostering innovation and global expansion.

The third S in the model refers to the processes and procedures that support the execution of the marketing strategy. Amazon, renowned for its customer-centric approach, leverages robust systems to streamline operations, ensuring fast and reliable product delivery and an outstanding customer experience. Their efficient system integration has driven unparalleled growth and customer loyalty.

The fourth S encompasses the competencies and expertise of the marketing team. Adobe, a leading software company, continuously invests in its employees’ development, ensuring they possess the skills required to innovate and deliver exceptional customer experiences. This focus on upskilling has contributed to their industry-leading solutions and sustained growth.

The fifth S highlights the importance of having the right people in the right roles. Google is renowned for its rigorous talent acquisition process, seeking individuals who align with their culture of innovation and passion for solving complex challenges. This meticulous approach to hiring has fostered a dynamic and diverse workforce that drives Google’s continuous success.

The sixth S relates to the leadership and management style that influences an organization’s culture and decision-making. Microsoft’s transformation under Satya Nadella exemplifies effective leadership. His inclusive and empowering style enabled Microsoft to shift its focus from products to solutions, leading to unprecedented growth and market relevance.

Shared Values:

The final S represents the core values and beliefs that underpin the organization’s identity. Starbucks, known for its commitment to social responsibility and ethical sourcing, has successfully cultivated a brand that resonates with its customers’ values. This shared value system has resulted in a loyal customer base and global brand advocacy.

Case Studies:

General electric (ge):.

GE implemented the McKinsey 7S Model during its organizational transformation. By aligning strategy, structure, systems, skills, staff, style, and shared values, GE refocused on core competencies and divested non-core businesses. This strategic shift resulted in increased operational efficiency, improved financial performance, and enhanced shareholder value.

Coca-Cola utilized the McKinsey 7S Model to streamline its marketing function. By reevaluating its marketing strategy , restructuring marketing teams, and investing in employee development, Coca-Cola achieved greater agility in responding to market trends and enhancing customer engagement.

The McKinsey 7S Model provides a comprehensive framework for organizations to evaluate and align their internal elements effectively. By harmonizing strategy, structure, systems, skills, staff, style, and shared values, companies can create a unified and high-performing entity. Real-life case studies, like General Electric and Coca-Cola, demonstrate the model’s practical application in driving transformation and achieving long-term success. Embracing the McKinsey 7S Model empowers marketing teams to adapt, innovate, and thrive in today’s dynamic business landscape, ensuring a competitive advantage and sustainable growth.

That we know about business and organisational modelling is that it takes time, structure, practice and persistence. When companies undertake this type of transformation, it can be the difference of scale or subtract.

While McKinsey has many positive points, there is always a sense that perhaps McKinsey has not adapted fast enough to the changing consumer behaviors and still has an old-school approach. They were not the first to adopt AI and are late-comers. This is concerning for large corporations that have relied on McKinsey to take them into the future. If they themselves are not in the future, predicting what is to come, how can they truly be relevant in today’s AI world?

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McKinsey 7S Model

Definition of the McKinsey 7S Model

McKinsey 7S model is a tool that analyzes company’s organizational design by looking at 7 key internal elements: strategy, structure, systems, shared values, style, staff and skills, in order to identify if they are effectively aligned and allow the organization to achieve its objectives.

What is the McKinsey 7S Model

McKinsey 7S model was developed in the 1980s by McKinsey consultants Tom Peters, Robert Waterman and Julien Philips with help from Richard Pascale and Anthony G. Athos. Since its introduction, the model has been widely used by academics and practitioners and remains one of the most popular strategic planning tools.

It sought to present an emphasis on human resources (Soft S), rather than the traditional mass production tangibles of capital, infrastructure and equipment, as a key to higher organizational performance.

The goal of the model was to show how 7 elements of the company: Structure, Strategy, Skills, Staff, Style, Systems, and Shared values, can be aligned together to achieve effectiveness in a company.

The key point of the model is that all the seven areas are interconnected and a change in one area requires change in the rest of a firm for it to function effectively.

Below you can find the McKinsey model, which represents the connections between seven areas and divides them into ‘Soft Ss’ and ‘Hard Ss’. The shape of the model emphasizes the interconnectedness of the elements.

The model can be applied to many situations and is a valuable tool when organizational design is at question. The most common uses of the framework are:

• To facilitate organizational change.
• To help implement a new strategy.
• To identify how each area may change in the future.
• To facilitate the merger of organizations.

In the McKinsey model, the seven areas of organization are divided into the ‘soft’ and ‘hard’ areas. Strategy, structure and systems are hard elements that are much easier to identify and manage when compared to soft elements.

On the other hand, soft areas, although harder to manage, are the foundation of the organization and are more likely to create a sustained competitive advantage.

Strategy is a plan developed by a firm to achieve sustained competitive advantage and successfully compete in the market. What does a well-aligned strategy mean in the 7S McKinsey model?

In general, a sound strategy is one that’s clearly articulated, long-term, helps to achieve a competitive advantage, and reinforced by a strong vision, mission, and values.

But it’s hard to tell if such a strategy is well-aligned with other elements when analyzed alone. So the key in the 7S model is not to look at your company to find the great strategy, structure, systems and etc. but to look if it’s aligned with other elements.

For example, a short-term strategy is usually a poor choice for a company, but if it’s aligned with the other 6 elements, then it may provide strong results.

Structure represents the way business divisions and units are organized and includes the information on who is accountable to whom. In other words, structure is the organizational chart of the firm. It is also one of the most visible and easy-to-change elements of the framework.

Systems are the processes and procedures of the company, which reveal the business’ daily activities and how decisions are made. Systems are the area of the firm that determines how business is done and it should be the main focus for managers during organizational change.

Skills are the abilities that a firm’s employees perform very well. They also include capabilities and competencies. During organizational change, the question often arises of what skills the company will really need to reinforce its new strategy or new structure.

Staff element is concerned with what type and how many employees an organization will need and how they will be recruited, trained, motivated and rewarded.

Style represents the way the company is managed by top-level managers, how they interact, what actions do they take and their symbolic value. In other words, it is the management style of the company’s leaders.

Shared Values

Shared Values are at the core of McKinsey’s 7S model. They are the norms and standards that guide employee behavior and company actions and thus, are the foundation of every organization.

The authors of the framework emphasize that all elements must be given equal importance to achieve the best results.

Using the McKinsey 7S framework

As we pointed out earlier, the McKinsey 7S framework is often used when organizational design and effectiveness are in question. It is easy to understand the model but much harder to apply it to your organization due to a common misunderstanding of what should well-aligned elements be like.

We provide the following steps that should help you to apply this tool:

Step 1. Identify the areas that are not effectively aligned

During the first step, your aim is to look at the 7S elements and identify if they are effectively aligned with each other. Normally, you should already be aware of how 7 elements are aligned in your company, but if you don’t, you can use the checklist from WhittBlog to do that.

After you’ve answered the questions outlined there, you should look for the gaps, inconsistencies, and weaknesses between the relationships of the elements. For example, you designed a strategy that relies on quick product introduction, but the matrix structure with conflicting relationships hinders that, so there’s a conflict that requires a change in strategy or structure.

Step 2. Determine the optimal organizational design

With the help of top management, your second step is to find out what effective organizational design you want to achieve. By knowing the desired alignment, you can set your goals and make the action plans much easier.

This step is not as straightforward as identifying how seven areas are currently aligned in your organization for a few reasons.

First, you need to find the best optimal alignment, which is not known to you at the moment, so it requires more than answering the questions or collecting data.

Second, there are no templates or predetermined organizational designs that you could use and you’ll have to do a lot of research or benchmarking to find out how other similar organizations coped with organizational change or what organizational designs they are using.

Step 3. Decide where and what changes should be made

This is basically your action plan, which will detail the areas you want to realign and how you would like to do that. Suppose you find that your firm’s structure and management style are not aligned with the company’s values. In that case, you should decide how to reorganize the reporting relationships and which top managers the company should let go or how to influence them to change their management style so the company could work more effectively.

Step 4. Make the necessary changes

The implementation is the most important stage in any process, change or analysis and only the well-implemented changes have positive effects. Therefore, you should find the people in your company or hire consultants that are the best suited to implement the changes.

Step 5. Continuously review the 7S

The seven elements: strategy, structure, systems, skills, staff, style and values are dynamic and change constantly. A change in one element always has effects on the other elements and requires implementing a new organizational design. Thus, continuous review of each area is very important.

Example of McKinsey 7S Model

We’ll use a simplified example to show how the model should be applied to an existing organization.

Current position #1

We’ll start with a small startup which offers services online. The company’s main strategy is to grow its share in the market. The company is new, so its structure is simple and made of a few managers and bottom-level workers who undertake specific tasks. There are a very few formal systems, mainly because the company doesn’t need many at this time.

So far, the 7 factors are aligned properly. The company is small and there’s no need for a complex matrix structure and comprehensive business systems, which are very expensive to develop.

McKinsey 7S Example (1/3)

Current position #2

The startup has grown to become a large business with 500+ employees and now maintains a 50% market share in the domestic market. Its structure has changed and it is now a well-oiled bureaucratic machine.

The business expanded its staff and introduced new motivation, reward and control systems. Shared values evolved and now the company values enthusiasm and excellence. Trust and teamwork have disappeared due to so many new employees.

The company expanded and a few problems came with it. First, the company’s strategy is no longer viable. The business has a large market share in its domestic market, so the best way for it to grow is either to start introducing new products to the market or to expand to other geographical markets. Therefore, its strategy is not aligned with the rest of the company or its goals. The company should have seen this but it lacks strategic planning systems and analytical skills.

Business management style is still chaotic and it is a problem of top managers lacking management skills. The top management is mainly comprised of founders who don’t have the appropriate skills. New skills should be introduced to the company.

McKinsey 7S Example (2/3)

Current position #3

The company realizes that it needs to expand to other regions, so it changes its strategy from market penetration to market development. The company opens new offices in Asia, North and South America.

The company introduced new strategic planning systems and hired new management, which brought new analytical, strategic planning, and, most importantly, managerial skills. The organization’s structure and shared values haven’t changed.

Strategy, systems, skills and style have changed and are now properly aligned with the rest of the company. Other elements like shared values, staff and organizational structure are misaligned.

First, the company’s structure should have changed from a well-oiled bureaucratic machine to a division structure. The division structure is designed to facilitate operations in new geographic regions. This hasn’t been done and the company will struggle to work effectively.

Second, new shared values should evolve or be introduced in an organization because many people from new cultures come to the company and they all bring their own values, often very different than the current ones. This may hinder teamwork performance and communication between different regions. Motivation and reward systems also have to be adapted to cultural differences.

McKinsey 7S Example (3/3)

We’ve shown a simplified example of how the McKinsey 7S model should be applied. It is important to understand that the seven elements are much more complex in reality, and you’ll have to gather a lot of information on each of them to make any appropriate decision.

The model is simple, but it’s worth the effort to do one for your business to gather some insight and find out if your current organization is working effectively.

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5 thoughts on “McKinsey 7S Model”

For sure this article is one of the most useful and complete guidelines on 7S model.

Thanks Alireza Nami

Hello! Thanks for this. The article has explained comprehensively well how the 7S McKinsey framework works. 🙂 The case studies illustrated clearly how alignment should be investigated.

Thank so much. Tina Saulo

Can we adopt McKinsey 7S Model for gap analysis of data generation system or simply for data gap analysis of SDGs?

Very well explained. Very simple to follow.

Wanted to know how does McKinsey 7S Model differentiate from EFQM Model.

Excellent and accessible insight on the application of the model

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McKinsey 7S Model

Publication Date :

14 Aug, 2023

Blog Author :

Khalid Ahmed

Edited by :

Shreeya Jain

Reviewed by :

Dheeraj Vaidya, CFA, FRM

Table Of Contents

What Is McKinsey 7S Model?

The McKinsey 7S Model refers to a management outline examining seven internal elements of an organization. It is designed to help organizations assess and align various internal elements to improve performance and effectiveness. Moreover, This model suggests that all these elements are interconnected, and changes in one component can impact others.

The seven elements are shared values, staff, structure, strategy, style, skills, and systems. It mainly focuses on achieving a firm's strategic objectives by aligning its internal elements. Moreover, it applies to problem-solving, organizational development, and strategic planning. Hence, this model offers diagnosing problems, a holistic view, and strategic decision-making facilitation to a firm to enhance its performance.

Table of contents

Mckinsey 7s model explained.

• How it Works ?

How To Use?

Advantages and disadvantages, frequently asked questions (faqs), recommended articles.

• McKinsey 7S Model assesses organizational alignment and effectiveness by analyzing seven internal elements and identifying disturbances.
• It analyzes organizational alignment, and effectiveness through strategy, structure, systems, skills, staff, style, and shared values.
• Therefore, one can apply the model in an organization through information gathering, 7s analysis, alignment assessment, action plan development, alignment identification, stakeholder involvement, progress monitoring, and review.
• Its benefits include its thorough consideration of many organizational factors, but it also has the drawback that evaluating each of the seven components is too tricky.

The McKinsey 7S Model is defined as a management framework to identify seven main internal elements of an institution. The seven elements are strategy, structure, systems, skills, staff, style, and shared values. These elements help users to get a holistic approach to assessing and improving institutional effectiveness. Moreover, McKinsey 7S model change management does it by evaluation of alignments and interconnections among these elements. Therefore, this model serves as a tool for analyzing and aligning these elements to improve overall organizational performance.

How It Works ?

It assesses the current state of every element while identifying the misalignment or areas of strength. Hence, it aids the organizations in understanding how edits in any element could impact others. Additionally, it also guides decision-making strategically and efforts in organizational change.

• Application of McKinsey 7S Model: Organizations have been using it in various scenarios like diagnosing their issues, strategic planning, internal change initiatives, and mergers or acquisitions . Moreover, it helps in culture assessment, strategic planning, and executing change initiatives.
• Importance of McKinsey 7S Model : It has become essential for organizations to understand their present status and prepare for a successful future. It guides the organization to achieve its vision and success by creating an alignment between its people, structure, and strategy. As a result, the organizations drive their to a higher performance state.
• McKinsey 7S Model Template: It consists of modules evaluating every S element and their interrelationships. Furthermore, it represents the model as a diagram or matrix.
• Effect on Financial World : Financial institutions make more strategic and informed decision-making while enhancing their adaptability and competitiveness in market dynamics .

Hence, the McKinsey 7S Model is a versatile tool that helps organizations assess their internal components, ensure alignment, and drive effective change and performance improvement.

The McKinsey 7S Model encompasses seven factors that analyze organizational alignment and effectiveness. These elements are divided into "Hard Ss" and "Soft Ss."

Here are the seven elements explained:

• Strategy :  An organization prepares its plan and direction to set its goals and how to accomplish them. It involves making decisions about the organization's competitive position, target markets , product offerings, resource allocation, and overall direction.
• Structure: It means an organization's reporting lines, hierarchy, and roles. Hence, it includes factors such as hierarchy, reporting relationships, departmental divisions, and how information flows.
• Systems: These are the workflows, communication processes, procedures, and processes guiding an organization's operation.
• Skills : Skills refer to the capabilities and competencies of the organization's employees. The right skills and expertise are essential for executing the organization's strategy and delivering value to customers and stakeholders .
• Staff: The roles and engagement of employees who worked in the organization with each other. Therefore, having the right people with the necessary skills and attitudes is crucial for achieving the organization's goals.
• Style: The culture and leadership style of an organization. Therefore, this includes how leaders communicate, make decisions, motivate employees, and shape the overall work environment.
• Shared Values: The fundamental values, convictions, and ethics define an organization's character and direct actions. Besides, these values influence the behavior, attitudes, and decisions of individuals within the organization and help define its unique identity.

To apply the model in an organization, the following must be done:

• Information gathering: First, collect all information concerning the 7s elements of the model using surveys, social media, and interviews.
• 7s analysis creation: Then, create a 7S framework using the information gathered to illustrate the links between the parts.
• Alignment assessment : Next, examine how effectively the components of your company are aligned. Determine your strengths and weaknesses.
• Action plan development : Identify where the various pieces are out of alignment. These differences might hamper the efficacy of the company.
• Misalignments identification : Next, create action plans according to the findings to correct misalignments and reinforce weak points. Moreover, one must consider the potential effects of changing one element on others.
• Action plan development : After that, one must include essential parties, including leaders and workers, to guarantee buy-in and successful implementation.
• Key stakeholders' involvement : Start implementing the action schemes, ensuring everyone in the business is informed and involved in the changes.
• Progress monitoring: Now, periodically evaluate the alignment endeavors' success and, if necessary, modify the strategies.
• Implement Changes : Start implementing the action plans. Therefore, this could involve revising the organization's strategy, adjusting the reporting structure, introducing new systems, enhancing skills, fostering desired values, modifying leadership practices, or making staffing decisions.
• Review and sustenance : Finally, maintain the alignment efforts by reviewing them frequently and making the required modifications while the organization changes.

Therefore, the McKinsey 7S Model does not constitute a one-time activity. Moreover, it is a continuous process that keeps a business productive and focused on its objectives.

Let us use a few examples to understand the topic.

Nokia is a case study of organizational failure—from being a pioneer in mobile technology to being purchased by Microsoft in 2013. Let's examine the company's mistakes using the McKinsey 7S model.

With an operational profit of about $4 billion in October 1998, Nokia overtook all other mobile phone brands as the most popular worldwide. Hence, the Nokia 1100, which has sold the most units of any mobile phone ever, was developed in 2003. After waiting five years, Apple unveiled the iPhone. By the end of 2007, Nokia smartphones accounted for 50% of all smartphones sold globally, with the iPhone holding only a 5% market share .

Thus, in 2010, Nokia unveiled the "iPhone Killer" to eliminate Apple from the market. The model's failure to accomplish its objective marked Nokia's demise. As a result, Nokia's market value decreased by roughly 90% in just six years. Microsoft purchased the business in 2013.

However, at the time, Nokia produced 40% of all mobile phones sold worldwide. The business has the staff and human resources it needs to keep innovating and grow its market share.

Sadly, the company's leadership (style factor) lacked the fundamental skills and strategic vision to promote organizational transformation.

They refused to let the company's tech staff offer important insights while making crucial judgments. The business made the wrong strategic decision, which ultimately contributed to its death.

Suppose Retailex, a leading retail conglomerate , successfully applied this model to navigate a significant organizational transformation. They shifted their strategy to focus on e-commerce expansion and customer experience enhancement. To support this strategy, they restructured their operations, adopting a more matrix-based organizational structure that encouraged cross-functional collaboration. Moreover, they implemented new systems for inventory management , order fulfillment, and customer relationship management, aligning with their strategic goals.

Besides, the shared values of customer-centricity and innovation were reinforced through internal communication campaigns and recognition programs. Hence, the company provided training and development opportunities to ensure their employees acquired the necessary skills for digital retail. However, the leadership style evolved towards a more consultative approach, fostering open communication and inclusiveness. By considering and aligning all these elements, the firm achieved a successful transformation, leveraging the synergy of the McKinsey 7S Model.

The model has its pros and cons, which will be shown in the table below:

In the latter part of the 1970s, McKinsey & Company consultants Tom Peters and Robert Waterman developed the McKinsey 7S Model. It first appeared in their book "In Search of Excellence," which continues to rise in popularity as a management tool for evaluating and enhancing organizational efficiency.

This model can be applied to various organizations, including businesses, non-profits, government agencies, and more. However, the emphasis on each element and how they interact might vary based on the organization's specific context.

The model recognizes that organizations exist within a dynamic environment, and the alignment of the seven elements should be continuously assessed and adjusted to respond to changes in the internal and external landscape.

The model primarily focuses on internal factors, but it indirectly considers external factors by examining how the interior elements are aligned to respond to external changes and challenges.

This article has been a guide to what is McKinsey 7S Model. Here, we explain its examples, advantages, disadvantages, how to use it, and its elements. You may also find some useful articles here -

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The McKinsey 7-S Model for Organizational Alignment and Success

Aligning an organization is crucial yet challenging, especially amid ongoing changes. One strategic tool businesses use to manage complexity and drive consistent alignment is the McKinsey 7-S Model.

Learn how leaders leverage the Mckinsey 7-S model - a strategic framework analyzing structure, strategy, systems, skills, staff, style and shared values - to diagnose gaps, guide transformations, and improve organizational effectiveness.

In this article, we explore the 7-S framework, its implementation, and how leaders have leveraged this model to direct effective transformations.

What Is the McKinsey 7-S Model?

The McKinsey 7-S Model is a change management strategy framework that analyzes a company's organizational design to help leaders effectively manage organizational change. It does this by looking at the interactions and alignment between seven key interconnected elements that influence an organization's ability to change:

• Structure - Structure refers to the accountability-enabling chain of command. It creates employee ownership within an organization.
• Strategy - The plans and approaches the business takes to achieve goals and gain a competitive edge. Effective strategies align with other model elements, reinforce vision/mission/values, and response to market changes.
• Systems - Systems are operational processes and workflows impacting productivity and decisions.
• Shared Values - The guiding principles and culture that shapes decisions and unites the organization. Enable employee behavioral change essential for a strong culture.
• Skills - The actual skills and competencies people in the organization need to execute the strategy. Employee abilities to complete tasks. Skill gaps overburden experienced employees, so identifying gaps to bridge them through training is essential.
• Style - The leadership approach and management style that drives the culture. Management style influences employee productivity and satisfaction levels.
• Staff - The human resources required, how people are hired, trained, motivated.

The model proposes that these seven elements influence each other, like a domino effect. The central placement of shared values indicates its crucial role - a strong, healthy culture impacts all other elements and drives change. Leaders must get the shared values and culture right to enable organizational change.

The 7 Elements of the McKinsey 7-S Framework

McKinsey's model comprises seven elements in two categories:

Hard Elements: More tangible elements that leadership and management can directly influence.

Soft Elements: Intangible, culture-driven elements.

• Shared values

The hard elements are more easily identified and adjustable. However, the model proposes soft elements are equally crucial for organizations to examine and realign to drive successful change.

How to Implement the McKinsey 7-S Model

Leaders can effectively implement the model using a top-down approach:

1. Identify Gaps and Unaligned Processes

The first step is to conduct an analysis of the current state of the organization across the 7-S dimensions. The goal is to spot inconsistencies, misalignments, and areas needing change.

This involves thoroughly evaluating the organization's:

• Structure - Reporting lines, decision-making processes, team dynamics
• Strategy - Business plans , goal setting, competitive positioning
• Systems - Technologies, workflows, infrastructure
• Shared Values - Cultural values, norms, employee experience
• Skills - Capabilities, training levels, competency gaps
• Style - Leadership approach, management model, HR policies
• Staff - Human capital, job roles, incentives and rewards

Compare findings to identify gaps between current and desired states per element and in their interactions. List out unaligned processes and practices needing realignment.

Conduct employee surveys, workflow analysis, and leadership discussions to gather broad insights into potential issues. Identify pain points experienced by various stakeholders.

2. Determine the Ideal Organizational Design

Next, research extensively to define what the optimal organizational design should be to enable business strategy execution.

Take into account your long-term business vision and priorities when deciding what changes different 7-S elements require. Consult strategic experts to benchmark against organizational best practices. Importantly, the "ideal state" vision must align with leadership aspirations as well as wider team sentiments. Achieve this balance through change management surveys and focus group discussions.

The outcome of this step should be clarity on the required realignments per element - like flatter hierarchy, upgraded tech systems, better incentives, etc.

3. Create an Effective Action Plan

With the gaps identified and ideal state chartered, the next step is creating a detailed change implementation roadmap.

Define the precise hierarchy changes, communication protocols, system upgrades, training programs, and policy changes required to shift the organizational design. Include specific departments impacted and resources needed.

Assign change sponsors and owners for accountability. Set targets and timelines for various initiatives outlined in the plan. Creating this plan collaboratively, with leadership and employee inputs incorporated, will drive engagement and momentum.

4. Implement the Change

The most crucial step is the actual change implementation based on the action plan. Careful execution avoids resistance, confusion, and failures.

Appoint internal change agents from impacted teams or hire external consultants skilled in organizational change management best practices. Conduct regular training workshops. Offer communication forums for clarity. Encourage employee participation at every step, from feedback to pilots. Leadership alignment on the "why" and support during transitions is vital. Celebrate small wins through the process.

5. Maintain Momentum with Review Processes

As organizational elements and market dynamics constantly shift, it's key to sustain momentum post-implementation with rigorous review mechanisms.

Set up processes to continually track interdependencies between the 7-S elements - like skills and staff or systems and structure. Check that realignments made enable strategy delivery consistently. Adapt action plans if critical misalignments re-emerge. Use insights to refine change initiatives or maintain competitive edge through new transformations.

The McKinsey 7-S model framework offers a simple yet effective method for leaders to analyze and enhance organizational design. Following this step-by-step implementation methodology can help companies execute complex change initiatives smoothly.

The focus should be on identifying gaps, correcting course, sustaining alignment, and repeating the process as new market realities emerge. With constant assessment and adaptation, companies can build resilient systems powered for high performance.

McKinsey 7-S Model Examples

Here is a detailed explanation of two McKinsey 7-S model examples:

Nokia: From Industry Pioneer to Microsoft Acquisition

Nokia's journey from being an industry pioneer to losing significant market share and eventually getting acquired by Microsoft aligns well with the McKinsey 7-S model analysis of change failure.

Strategy Dilemma: Nokia faced a dilemma regarding whether to optimize costs and volumes, enhance device performance, or maximize security. They opted for a cost-leadership approach but failed miserably on innovation and device performance fronts.

Structure: Nokia had a hierarchical, top-down organizational structure where employees were working in silos with limited communication across teams. To compete with the likes of Apple, Nokia should have transitioned to a more agile, decentralized structure with increased collaboration.

Systems: Nokia considered organizational agility and being nimble as its key competitive advantages in the past. With a skilled engineering workforce, Nokia initially was in a strong position to rapidly innovate its products and increase operational efficiency.

Skills: Nokia had built a large pool of highly skilled telecom engineers over the years and leveraged that to design highly efficient mobile phones earlier on. Lack of relevant skills was not an initial gap that led to their downfall.

Staff: Surprisingly, Nokia removed the Chief Technology Officer (CTO) position from top management during 2007-2010 (Source: BrandMinds.com) . This led to extremely high attrition rates of engineers and technology executives. New hires also weren't adequately skilled to start with, eventually causing the downfall of Nokia as a cutting-edge mobile brand.

Style: Due to the low technical competence of leaders appointed, employee morale was generally low during Nokia's decline. Instead of bringing in people with relevant backgrounds to further innovation and business growth , Nokia clearly needed transformational, visionary change leadership during that period to rejuvenate technology advancement and cutting-edge product designs.

Shared Values: The core values of the company previously enabling business performance were Respect, Achievement, Renewal and Challenge. However, these got diluted among competing priorities.

McDonald's: Leveraging 7-S Model to Drive Change

In contrast, here is how the global fast-food giant McDonald's successfully leverages the McKinsey 7-S model components to continually drive organizational change and evolution:

Strategy: McDonald's gains significant market share through adopting a cost-leadership approach. The company also sets clear, time-bound SMART goals to achieve both long-term strategic vision as well as short-term objectives.

Structure: Unlike other complex multinational corporations, McDonald's has a relatively flat organizational structure where a store manager efficiently manages restaurant employees. Store crews function as close-knit teams and can easily access senior management when required.

Systems: McDonald's is known for constantly innovating various systems to reduce customer wait times and make restaurant operations along with the whole supply chain more efficient. Some examples are mobile ordering apps, self-ordering kiosks, delivery partnerships, lean kitchen processes etc.

Shared Values: Values like integrity, serving diverse customer demographics, hiring employees from different backgrounds, encouraging teamwork and giving back to communities shape McDonald's operations. These are reflected in the core values - Serve, Inclusion, Integrity, Community and Family.

Style: McDonald's leverages a highly participative leadership style where senior leaders actively engage with employees at different levels to seek frequent feedback to improve policies, operations and resolve conflicts.

Staff: With over 150,000 employees globally, McDonald's is one of the largest employers worldwide (Source: Wikipedia.org) . The company firmly believes in diversity and strives to enable employee satisfaction through various initiatives.

Skills Training: McDonald's regularly trains employees through real-world simulations to provide an excellent customer experience and handle objections effectively. This focus results in highly skilled staff.

In summary, the 7S model offers business leaders a framework to analyze how integral organizational elements impact each other. As the Nokia and McDonald's examples illustrate, leveraging 7-S insights properly can drive change or hindrance.

In conclusion, the McKinsey 7-S model offers a framework for organizations to analyze alignment and enable success. Leaders can assess interdependencies between these components to pinpoint organizational gaps or misalignments. Addressing these effectively guides strategic improvements and change initiatives.

With robust research and committed implementation, the McKinsey 7-S model gives organizations a holistic blueprint towards increased alignment and competitiveness. Continuous assessment between elements helps firms execute their vision.

The framework offers a simple, structured methodology to diagnose issues and track progress. Ultimately, organizations aiming for agility, innovation or growth can leverage the 7-S model to reach higher performance excellence.

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Enhancing Organizational Success: A Deep Dive into the McKinsey 7S Model with Real-Life Case Studies

• Written by  Marketing Eye Atlanta
• Be the first to comment!

Currently, organizations face constant challenges in learning new marketing approaches, consistently devising impactful campaigns that make a mark and grow. Successful companies understand that the key to sustainable growth lies in aligning their internal elements effectively. One powerful tool that has proven its value in achieving organizational success is the McKinsey 7S Model. Developed by McKinsey & Company, this strategic management framework examines seven critical interdependent factors within an organization to create a cohesive and high-performing unit.

So let’s delve into the McKinsey 7S Model, explore each element in detail, and illustrate its practical application through real-life case studies.

The first S in the McKinsey 7S Model represents the organization's overarching plan and direction. A clear and well-defined marketing strategy is essential to guide decision-making, resource allocation, and market positioning. A prime example is Apple Inc., which revolutionized the technology industry by focusing on innovation, creating premium products, and building a strong brand identity. Their strategic approach has enabled them to consistently outperform competitors and dominate the market.

The second S denotes the organization's design, including its hierarchy and reporting lines. A cohesive marketing team structure facilitates efficient communication, collaboration, and decision-making. Procter & Gamble (P&G) serves as a prime example. P&G's matrix organizational structure enables seamless coordination between various brands and functions, fostering innovation and global expansion.

The third S in the model refers to the processes and procedures that support the execution of the marketing strategy. Amazon, renowned for its customer-centric approach, leverages robust systems to streamline operations, ensuring fast and reliable product delivery and an outstanding customer experience. Their efficient system integration has driven unparalleled growth and customer loyalty.

The fourth S encompasses the competencies and expertise of the marketing team. Adobe, a leading software company, continuously invests in its employees' development, ensuring they possess the skills required to innovate and deliver exceptional customer experiences. This focus on upskilling has contributed to their industry-leading solutions and sustained growth.

The fifth S highlights the importance of having the right people in the right roles. Google is renowned for its rigorous talent acquisition process, seeking individuals who align with their culture of innovation and passion for solving complex challenges. This meticulous approach to hiring has fostered a dynamic and diverse workforce that drives Google's continuous success.

The sixth S relates to the leadership and management style that influences an organization's culture and decision-making. Microsoft's transformation under Satya Nadella exemplifies effective leadership. His inclusive and empowering style enabled Microsoft to shift its focus from products to solutions, leading to unprecedented growth and market relevance.

Shared Values:

The final S represents the core values and beliefs that underpin the organization's identity. Starbucks, known for its commitment to social responsibility and ethical sourcing, has successfully cultivated a brand that resonates with its customers' values. This shared value system has resulted in a loyal customer base and global brand advocacy.

Case Studies:

General electric (ge):.

GE implemented the McKinsey 7S Model during its organizational transformation. By aligning strategy, structure, systems, skills, staff, style, and shared values, GE refocused on core competencies and divested non-core businesses. This strategic shift resulted in increased operational efficiency, improved financial performance, and enhanced shareholder value.

Coca-Cola utilized the McKinsey 7S Model to streamline its marketing function. By reevaluating its marketing strategy, restructuring marketing teams, and investing in employee development, Coca-Cola achieved greater agility in responding to market trends and enhancing customer engagement.

Real-life case studies, like General Electric and Coca-Cola, demonstrate the McKinsey 7S Model’s practical application in driving transformation and achieving long-term success. The model has surely provided organizations with a comprehensive framework to evaluate and align their internal elements in a super effective way. By harmonizing strategy, structure, systems, skills, staff, style, and shared values, companies are now creating a unified and high-performing entity. If you are striving to make your mark with data-driven marketing strategies that are on-point, engaging and relatable, consider outsourcing your marketing needs to a reliable partner like Marketing Eye Atlanta. 

At Marketing Eye Atlanta , we pride ourselves on being truly disruptive in every way. We're not your typical marketing agency – we're a force of change, committed to helping businesses thrive. Our outsourced marketing model is tailor-made for companies that recognize the power of having a 'Marketing Eye' on their side. Through collaboration and partnership, we believe there are no limits to what we can achieve together – and our track record proves it! Check out our services to know how we are constantly evolving and developing custom technology to work harder, faster, and smarter for our clients, ensuring remarkable results.

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The Marketing Eye Atlanta team has a combined 35+ years experience in marketing and communications. Marketing Eye Atlanta is well-known for high performance, technology-driven marketing campaigns that deliver results. The team members are experts in all facets of the marketing mix including strategy development, content marketing, branding, website development, public relations, social media, digital marketing, SEO, lead generation, direct marketing, etc.

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Home » Strategy » The McKinsey 7S Framework – with Related Examples, Templates and Tools

The McKinsey 7S Framework – with Related Examples, Templates and Tools

• Posted on February 11, 2022
• / Under Strategy
• / With 3 Comments

In the 1970s and 1980s, Americans were suffering from recession and unemployment while trying to find the right way to develop and revitalize their own companies after fully understanding the art of successful Japanese companies. Thomas J. Peters and Robert H. Waterman were long-time employees of the famous McKinsey & Company. They interviewed 62 of the best and oldest large companies in the United States and selected 43 based on the criteria of profitability and growth rate. They selected 43 outstanding model companies, including IBM, Texas Instruments, Hewlett-Packard, McDonald’s, Kodak, DuPont, and other industry leaders, and invented the 7S model.

The 7-S model states that all aspects of a company must be considered holistically in the development process. It includes structure, systems, style, staff, skills, strategy and shared values. In other words, it is not enough for a company to have a clear strategy and a well-thought-out action plan, because companies can also make mistakes in the process of implementing their strategies. This is because strategy is only one factor.

Edit Example Above

In the model, strategy, structure and systems are considered the “hardware / hard skills” for business success, while style, staff, skills and shared values are considered the “software / soft skills” for successful business operations. Both hardware and software are equally important in how a company wants to succeed, and cannot be paranoid.

What is the 7-S model?

By looking at each of these 7 areas and how they are interconnected, a company can determine if it has the capacity to achieve its goals and how it will respond and adapt to change. The idea is that if one area is lacking or needs to be adjusted, then the other elements need to be adjusted as well. All elements are interconnected, so a change in the performance of any one component will affect another.

• Strategy: The overall planning of an enterprise for long-term survival and development in the face of rapidly changing business environment.
• Structure: Organizational structure is a model that expresses the arrangement, spatial location, contact and gathering status of all parts of the organization, in order to effectively bring all parts of the organization together to work towards a common goal.
• System: Enterprise system refers to a series of regulations and constraints made on the microstructure and related systems of the enterprise, which is specifically expressed as the standardization and institutionalization of a series of behaviors such as enterprise organization, operation and management.
• Style: It mainly refers to the corporate culture, which is the sum of the values, professional ethics and behavioral norms formed by the enterprise in the long-term production and operation process and commonly recognized and followed by all employees.
• Staff: the knowledge and skills of employees.
• Skills: All production and management activities of the enterprise are carried out by employees with certain technical abilities using the corresponding factors of production to realize the process of creating material and spiritual wealth.
• Shared values: It is the strategy of all members of the organization. The common understanding of the goals and objectives of the enterprise is the basic view of the meaning of existence, business indicators and other issues, as well as the criteria for judging the behavior of enterprises and employees. Shared values are the core of corporate culture

As shown in the figure below: Shared values are at the center and will drive and promote other elements. When the shared values change, it will bring about changes in other elements.

How does the 7S model work?

The model is based on the idea that for a business to operate well, the seven factors need to work together and interact with each other. Assuming you are at point A and your goal is point B, you can use this model to analyze the gap between A and B and how these seven factors need to be aligned to reach your goal. As simple as it sounds, these seven elements only give you a perspective to think about, but the real answer to the question must rely on your skills, expertise and experience.

Edit this McKinsey 7S Model Template

When you consider applying the McKinsey 7S model, you may want to start with the following.

• First look at the shared values of your business: do they match your organizational structure, strategy, and systems? If not, what changes need to be made?
• Look at the “hardware” elements: How do they support each other and interact with each other? What needs to be changed? (It may be helpful to brainstorm using questions from each of the following areas)
• Look at the “software” factors: do they support the “hardware” factors? Do they match each other? What needs to be changed?  (It may be helpful to brainstorm using questions from each of the following areas)
• After you have made adjustments to the seven factors, you need to analyze again whether the adjustments are justified? Of course, it will also take some time to wait for the implementation results.
• How are our corporate teams divided?
• What is the organizational structure?
• How do the different departments work together?
• How do team members work with each other?
• Is decision-making centralized or decentralized? Is this type of decision making necessary?
• Is communication direct or indirect?
• What are our corporate systems?
• Where is control centralized? What are the appraisal and evaluation systems?
• What are the internal rules and processes of the team?
• What is the management style of the company?
• Is leadership effective?
• Do team members tend to be competitive or supportive?
• What are the company’s strongest technologies?
• Are there any technical gaps?
• What are the company’s core competencies?
• Does the current workforce have the right skills for their current position?
• How are these skills measured?
• What is our strategy?
• How do we achieve our goals?
• How do we face competitive pressures?
• What are the changes in customer needs? How do we deal with it?
• What changes to our strategy are required by the external environment?

shared value

• What are the core values?
• What is the team culture?
• How strong are the values?
• What are the fundamental values on which the company was founded?

Edit this McKinsey 7S Model

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