Evolving Organisations: Remembering McKinsey 7S Model
S. Shyam Prasad Ph.D
In modern time, organisations want to grow fast in order to catch up with the grown-ups. They incorporate various tools and systems adopted and used by the predecessors. This may not necessarily result in achieving the intended objective. Organisations have to draw upon the McKinsey 7S model; ensure that other aspects of firm has to be taken into consideration, their interrelations and interdependency have to be studied. After a careful analysis, incremental changes have to be ushered in and the softer aspects of the firm have to be monitored.
Today, many organisations want to grow fast at a pace greater than their predecessors’. It is true that they need not follow the same path as that of grown up organisations similar to the prevailing thought that the industrializing nations do not necessarily follow the same growth pattern of the industrialized nations. The firms simply implement the tools employed by the developed organisations in the hope that they will reach the heights quickly.
Let us move away from the above discussion and take a look at the article by Dedeurwaerder, Iacovelli, Leydon, & Pate, on “
How data is changing the pharma operations world” (August, 2018). Based on the article is the following discussion.
The digital era has now evolved to the extent that before any physical work begins, an aircraft designed using CAD software can be flight tested in a virtual flight simulator. Imagine the same in marketing firms: a CMO can model a product and test market it – all in digital environment.
Sounds like a fairy tale? I don’t think so. Today the technology exists – such as highly reliable and accurate predictive analytics, machine learning tools and artificial intelligence etc. However, there is no information of any marketing company having executed this. Firms do apply these tools individually but have not extended it fully. This course of action does not yield the results as envisioned above.
Can we sit back and contemplate what prevents such a scenario from becoming true. We need visionaries – and not just utilitarians – to understand the full potential of digital. More importantly, firms simultaneously need to manage expectations and realize the results will come slowly, not immediately. Further, “firms need to see the digital tools not as a series of individual tools but as means of transformation, requiring technology and people” (Dedeurwaerder, Iacovelli, Leydon, & Pate, August, 2018)
. I am reproducing below a section of the article for our discussion.
“There is an analogy in lean manufacturing. The lean methodology was invented by Toyota as part of the company’s famed Toyota Production System. Throughout the 1980s and 1990s, that system led to massive success in the automobile industry, with extremely high quality standards and lower costs, allowing Toyota to dramatically increase its global market share. In response, other car manufacturers tried to copy the principles of lean. Yet, their early efforts fell short, in part because they tried to implement individual lean tools and processes without having the right organizational elements in place.
This approach was bound to fail. In fact, the actions of those companies were almost more disruptive than taking no action at all. One book, The Machine that Changed the World, recounts this struggle, “Lean-production methods on existing mass production systems causes great pain and dislocation.” It took years for these manufacturers to realize that success in lean required more than merely plugging in some new technical tools or using fancy terminology. Rather, it required a fundamental rewiring of the organization and managerial system, which led to a cascading set of implications from the executive suite to the shop floor.
As with lean, the value from digital and AI will not come from trying to bolt tools onto existing processes. It will come through a comprehensive transformation of the entire organization.”
Now back to our original topic of firms on fast track growth. The above analogy is true for our firms in discussion. No organisation can be succeed by just adopting different technical tools employed by the others successful organisations.
Management is not pure science that two plus two will always result in four. It is not necessary that the scientific tools that helped one organisation to grow can be employed and expect the same results. For success of any tool in an organisation, the environment of the organisation is equally important. One should not blindly embrace any management techniques or tools and hope for similar results.
To analyse how well a particular organization is placed to achieve success and its planned objectives, some models are employed; one model that has out lived others and continues to be useful is the McKinsey 7-S framework. The basic postulation of the model is that all the internal activities of an organisation grouped in to seven aspects need to commensurate with one another and mutually reinforcing for the it to be successful. The model has found its usefulness in a wide variety of situations where aligning all the seven aspects are required. Whenever an organisation is undergoing changes – whatever be the type of change – the 7S model can be employed to find out how the organisations aspects are interrelated and mutually interdependent and a change in one of the aspects and its impact on other elements. While a change in any element is contemplated its wider impact on all other aspects have to be considered for the success of the organisation.
In conclusion, it can be said that mere adopting and implementing certain tools would not guarantee success. Modification of hard elements – Strategy, Structure and Systems – are easier to bring about; changes in the soft elements – Staff, Skills, Style and Shared Values are slow and painstaking. Organisations have to holistically consider all the elements of it whenever major changes are contemplated and their impact on each aspect have to be considered. Disruptive changes may not bring in the desired results while incremental changes stand a better chance. Adopt the pace of nature: her secret is patience (Emerson, 2018)
1. Dedeurwaerder, T., Iacovelli, D., Leydon, E., & Pate, P. (August, 2018). How data is changing the pharma operations world. McKinsey and Co. Retrieved August 18, 2018
2. Emerson, R. W. (2018, August 19). Brainy Quote. Retrieved from Brainy Quote Web site: https://www.brainyquote.com/lists/topics/top_10_patience_quotes