McKinsey 7S
Innovation Alphabet
McKinsey 7S
in a nutshell
The McKinsey 7S is a strategic planning tool developed in the 1980s by the management consulting firm McKinsey & Co. According to this paradigm, a company’s organizational effectiveness would be achieved by aligning its “hard” elements (Strategy, Structure, Systems) and its “soft” resources (Style, Staff, Skills, Shared Values).
Application Fields
• Training: Among the elements that make up the model are the so-called “Soft Ss”. They are represented and conveyed by the true heart of a company: people. Using the McKinsey method means considering and valuing the human factor. This is an important step to pave the way in the staff training process: employees could elect themselves as brand promoters.
• Strategy: McKinsey’s 7Ss really do touch every aspect of a company’s organization. Possessing a peripheral and, at the same time, detailed view of one’s business can only have positive consequences. The method is another useful tool for gleaning objective data and information in order to embark on a business strategy with a precise direction.
• Alignment: Sometimes, communication (and consequently coordination) between different departments in an organization can be complicated. But it is an aspect that should not be underestimated at all! It is, in fact, one of the cornerstones of an enterprise. Not only in terms of profit, since it reduces misunderstandings and delays at work, but also because the sharing of values will become choral.
Industries
• McKinsey 7S in the food service industry
The core virtues reported by McDonald’s “mission statement” are Serve, Inclusion, Integrity, Community and Family. To put the shared values into practice, the chain decided that serving the very wide range of customers should be staff from diverse backgrounds, encouraging teamwork, and finally, returning its employees to their home communities after generating a profit.
• McKinsey 7S in the energy industry
BP Amoco is a British company active in the energy sector, and particularly in oil and natural gas trading. It is one of the five largest players in the industry worldwide. In 2010, however, an environmental disaster known as Deepwater Horizon caused a significant loss for the company due to poor communication management. This is a prime example of how a lack of “Structure”, even (and especially) at the communication level, can result in disadvantages not only in economic terms, but in brand reputation.
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Business functions
• McKinsey 7S in support of communication
Kellogg Company, a U.S. multinational company specializing in breakfast products, is an example of a very efficient system capable of ensuring communication between employees and different levels of management. Systematic, defined, and organized communication allows for an easy flow of information and ensures that no task or organizational goal is compromised.
• McKinsey 7S in support of innovation
According to a Harvard Business Review article called “Why Good Companies Go Bad”, one of the reasons why many formidably successful companies become irrelevant is because they often do not adopt a mindset aimed at change, demonstrating little foresight. Such is the case with BlackBerry Limited, a Canadian company famous for its cell phone model that has fallen into oblivion since 2007.
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Check out more of the Innovation Alphabet:
Gamification
Gamification
Gamification is actually adding a game-like element to make more fun and engaging something that’s not necessarily a game. It’s all about turning a task that might be boring or difficult into a more enjoyable and motivating activity. You can also earn points, badges, and rewards for completing certain actions or challenges. Are you ready to play?
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Business Intelligence
Business Intelligence
A smart business means efficiency: Business Intelligence represents the ability to collect up-to-date data, present it in easy-to-understand formats, and deliver it in a timely manner to employees. Making data-driven decision-making and management processes leads to competitive advantage, reduces inefficiencies, and improves productivity and service at all levels.
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Artificial Scarcity
Artificial Scarcity
We often tend to desire what we cannot have. Or what we are in danger of losing: Artificial Scarcity is a strategy that flaunts a limited number of items that do not correspond to actual availability. The goal is to stimulate the perception in consumers that the stock of items is about to run out and thus create a need based on the “fear of being cut off” or the intention to buy the item in order to resell it at a higher price.
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Subscription Model
Subscription Model
A subscription model is a business tool that generates revenue by charging customers a fee at regular intervals. The company provides products or services to subscribers on a subscription basis, usually monthly or annually. In this way, loyalty has become more important than acquiring new users.
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Holacracy & Flat Organization
Holacracy & Flat Organization
A “flat organization” breaks down the traditional hierarchy and removes its negative connotation, while “holacracy” is the business tool that facilitates its formation. Flat organizations place more emphasis on communication and collaboration, aspiring to a distributed decision-making process that gives each employee a voice. But this is a model that is difficult to implement.
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Mass Customization
Mass Customization
Mass customization is an initiative adopted by companies to embrace the increasingly diversified needs of customers. By offering customizable products and services, consumers feel engaged and can bring their creativity into play. Brands gain from this a boost in perceived value and the opportunity to fuel a positive word-of-mouth marketing.
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Coopetition
Coopetition
If you can’t beat them, join them. Coopetition is a business strategy that defines cooperative and competitive relationships between competing companies in the same young or high-growth market. The goal is to travel a stretch of road together to lower initial research and development costs. Once the desired results are achieved, the companies will return to being enemies as before.
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MVP
MVP
To the disappointment of all sports fans, this is not an article about Michael Jordan. In the language of business, MVP stands for Minimum Viable Product and indicates the version of a new product that has enough features to attract customers. In this way, a team can gather the most feedback with the least effort, improve the prototype, and validate its sale.
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Agile
Agile
Agile is an approach to software development designed to respond to change. Teams quickly analyze the context in which they operate, identify uncertainties faced, and figure out how to adapt to always move forward. Interaction between individuals comes before processes and tools; collaboration with the customer is more important than negotiating contracts.
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Bounded Rationality
Bounded Rationality
The best solutions always come to mind when it is too late. This is because human beings tend to make decisions on the basis of satisfaction rather than optimization. Bounded Rationality means that we are unable to think clearly and linearly, we proceed by trial and error and forget all the possible variables that affect the process. But we are also flawed.
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