You are evaluating a new technology for managing your supply chain process. Wondering whether it will work in your organization the way things are now and if not, how will you make it work? The 7 S framework, a diagnostic tool to assess organization effectiveness can help you here. This tool describes seven interdependent internal factors that need to be aligned for an organization to be successful viz., Strategy, Structure, Systems, Style, Staff, Skills, and Shared Values.
The 7 S framework was born when four people met in 1978. Two of them were Richard Pascale and Anthony Athos who were investigating how Japanese industry has been so successful. They first mentioned the 7 S framework in the article ‘The Art of Japanese Management’ in 1981. The other two were Tom Peters and Robert Waterman both McKinsey consultants who had also been exploring what makes a company excellent. They explained this in their book ‘In Search of Excellence’. McKinsey started using it as a diagnostic tool and since then it came to be known as the Mckinsey 7 S framework.
Understanding the 7 Ss
The 7 factors in the 7 S framework are categorized as either "hard" or "soft" elements:"Hard" elements are easier to define, identify and management can directly influence them."Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful. The figure below depicts the interdependency of the elements.
More on each of the 7 elements…
- Strategy: The plan devised to maintain and build competitive advantage over competition, to allocate scarce resources to reach identified goals.
- Structure: The way the organization is structured, who reports to whom and way in which organization’s units relate to each other.
- Systems: The daily activities, processes, routines and procedures that staff members engage in to get the job done eg., systems related to recruiting, promotion ,information systems.
- Shared Values: This is at the center of the model. Also called "superordinate goals", these are the core values of the company that are reflected in the corporate culture and the general work ethic.
- Style: The style of leadership adopted and how key managers behave in achieving organization’s goals.
- Staff: The number and type of employees within the organization and how they are deployed.
- Skills: The actual skills and competencies of the employees working for the company.
A change in one element affects all the other elements. For instance a company looking at adopting speed as a strategy to gain competitive advantage may want to add a core value (shared value) of “empowering employees” to support its strategy. To institutionalize this core value, the organization will then need to transition to decentralization from centralization (structure). It will require a change in the number and type of people required at various work units in the organization (staff) and the kind of capabilities that employees need to have (skills) to take independent decisions. Managers will need to be a more hands off (style).Processes will need to be more robust to support decentralization (systems). So to establish a change one must work on all the factors simultaneously.
Using 7 S Framework
Using the framework is going to be lot tougher than just understanding the concept and will require quite a bit of work. The steps for the same are:-
- First determine what you want to do. Do you want to improve the performance of the organization by identifying the reasons for your organization not operating effectively? Do you want to introduce some change like a new leadership, organization structure, process etc?
- Gather as much information about the organisation and all the 7 elements as possible from all available sources such as primary research (observation, interviews with employees), organisational reports, news and press releases, literature review etc.
- Using the information you have gathered, now examine where there are gaps and inconsistencies between elements. Analyze both the current situation (Point A) and the proposed future situation (Point B) to identify gaps and inconsistencies between them.
- Now adjust and fine tune all the elements of the 7S model till you reach the desired endpoint. Soft elements will be more difficult to work on, but ignoring them will surely result in failure.
- As you are adjusting and aligning the elements, you must be prepared to use an iterative and often time consuming process of making adjustments, and then reanalyzing how that impacts other elements and their alignment.
I hope next time when you want to introduce a change you will not wonder what to do to make it a success. Of course you must consider the external elements also which this model does not cover.
You can even use the 7 S framework for improving your team effectiveness. If something within your team is not working, instead of shooting in the dark, the 7 S framework gives you a structure to conduct your analysis. Determine if there are inconsistencies between some of the elements identified by this classic model in your team. Once these inconsistencies are identified, you can work towards aligning the elements to make sure they are all contributing to the shared goals and values of your team.