January 17th, 2012 7-S Framework of McKinsey
The 7-S framework of McKinsey is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company. Together these factors determine the way in which a corporation operates. The 7's of McKinsey Framework are listed below:
1. Shared Value
The interconnecting center of McKinsey's model is: Shared Values. What does the organization stands for and what it believes in. Central beliefs and attitudes.
Plans for the allocation of a firms scarce resources, over time, to reach identified goals. Environment, competition, customers.
The way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc.
The procedures, processes and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems.
Numbers and types of personnel within the organization.
Cultural style of the organization and how key managers behave in achieving the organizationï¿½s goals. Management Styles.
Distinctive capabilities of personnel or of the organization as a whole. Core Competences.
Element of 7S model
Application to digital marketing team
Key issues from practice and literature
|The significance of digital marketing in influencing and supporting organisations' strategy||
Gaining appropriate budgets and demonstrating / delivering value and ROI from budgets. Annual planning approach.
Techniques for using digital marketing to impact organisation strategy
Techniques for aligning digital strategy with organisational and marketing strategy
|Structure||The modification of organizational structure to support digital marketing.||
Integration of team with other management, marketing (corporate communications, brand marketing, direct marketing) and IT staff
Use of cross-functional teams and steering groups
Insourcing vs. outsourcing
|Systems||The development of specific processes, procedures or information systems to support digital marketing||
Campaign planning approach-integration
Managing/sharing customer information
Managing content quality
Unified reporting of digital marketing effectiveness
In-house vs. external best-of-breed vs. external integrated technology solutions
|Staff||The breakdown of staff in terms of their background and characteristics such as IT vs. Marketing, use of contractors/consultants, age and sex.||
Insourcing vs. outsourcing
Achieving senior management buy-in/involvement with digital marketing
Staff recruitment and retention. Virtual working
Staff development and training
|Style||Includes both the way in which key managers behave in achieving the organizations' goals and the cultural style of the organization as a whole.||
Relates to role of digital marketing team in influencing strategy ï¿½
it is it dynamic and influential or conservative and looking for a voice
|Skills||Distinctive capabilities of key staff, but can be interpreted as specific skill-sets of team members.||Staff skills in specific areas: supplier selection, project management, Content management, specific e-marketing approaches (SEO,PPC, affiliate marketing, e-mail marketing, online advertising)|
|Superordinate goals||The guiding concepts of the digital marketing organisation which are also part of shared values and culture. The internal and external perception of these goals may vary||Improving the perception of the importance and effectiveness of the digital marketing team amongst senior managers and staff it works with (marketing generalists and IT)|
What is 7-S Model?
The Seven-Ss (7-S Model) is a framework for analyzing organizations and their effectiveness. It looks at the seven key elements that make the organizations successful, or not: strategy; structure; systems; style; skills; staff; and shared values.
Consultants at McKinsey & Company developed the 7S model in the late 1970s to help managers address the difficulties of organizational change. The model shows that organizational immune systems and the many interconnected variables involved make change complex, and that an effective change effort must address many of these issues simultaneously.
7-S Model: A Systemic Approach to Improving Organizations
The 7-S model is a tool for managerial analysis and action that provides a structure with which to consider a company as a whole, so that the organization's problems may be diagnosed and a strategy may be developed and implemented.
The 7-S diagram illustrates the multiplicity interconnectedness of elements that define an organization's ability to change. The theory helped to change manager's thinking about how companies could be improved. It says that it is not just a matter of devising a new strategy and following it through. Nor is it a matter of setting up new systems and letting them generate improvements.
There is no starting point or implied hierarchy – different factors may drive the business in any one organization.
Shared values are commonly held beliefs, mindsets, and assumptions that shape how an organization behaves ï¿½ its corporate culture. Shared values are what engender trust. They are an interconnecting center of the 7Ss model. Values are the identity by which a company is known throughout its business areas, what the organization stands for and what it believes in, it central beliefs and attitudes. These values must be explicitly stated as both corporate objectives and individual values.
Structure is the organizational chart and associated information that shows who reports to whom and how tasks are both divided up and integrated. In other words, structures describe the hierarchy of authority and accountability in an organization, the way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc. These relationships are frequently diagrammed in organizational charts. Most organizations use some mix of structures – pyramidal, matrix or networked ones – to accomplish their goals.
Strategy are plans an organization formulates to reach identified goals, and a set of decisions and actions aimed at gaining a sustainable advantage over the competition.
Systems define the flow of activities involved in the daily operation of business, including its core processes and its support systems. They refer to the procedures, processes and routines that are used to manage the organization and characterize how important work is to be done. Systems include:
- Business System
- Business Process Management System (BPMS)
- Management information system
- Innovation system
- Performance management system
- Financial system/capital allocation system
- Compensation system/reward system
- Customer satisfaction monitoring system
"Style" refers to the cultural style of the organization, how key managers behave in achieving the organization's goals, how managers collectively spend their time and attention, and how they use symbolic behavior. How management acts is more important that what management says.
"Staff" refers to the number and types of personnel within the organization and how companies develop employees and shape basic values.
"Skills" refer to the dominant distinctive capabilities and competencies of the personnel or of the organization as a whole.