Anda di halaman 1dari 33

&

Driving  it  to  Success  

Using  7  S  framework  
We  are  in  a  age  where  
•  1 Billion strong on face book – making it third largest country in

the world

•  Over 50% of world population is under 30

•  New Yorkers received tweets about east coast earthquake 30

seconds before they felt it

•  Each day 20% of Google searches were not searched before

•  69% of parents are friends of their children over social media

•  Every second 2 join on LinkedIn


2  
Points  to  Ponder  
•  YouTube is the second largest search engine in the world

•  Every minutes 72 hours of video uploaded to YouTube

•  If Wikipedia is made to a book it would be 2.25 million pages

long

•  90% of customers trust peer recommendations

•  In 10 years over 40% of Fortune 500 companies will no longer be

here

3  
Astonishing  Speed  

Years To Reach
50 millions Users:

Radio (38 Years)


TV (13 Years)
Internet (4 Years)
iPod (3 Years)
Facebook added 100 million users in 9 months
iPhone applications hit 1 billion in 9 months.
.
4  
Can  We  Let  Go  
Such vast connected community
and the speed of interaction
without attributing economic value?

Should not the strategic interface


between Business and Management
be challenging our own beliefs?
.

5  
PALM
This firm's personal digital assistants (PDAs) took the market by
storm back in the late 1990s. But by 2001 several major
competitors had entered the market. Hewlett-Packard
introduced a new line of handhelds, as did Sony and Research in
Motion. Mobile phone companies even began integrating PDA-
like elements into their handsets. The result: Palm's product
quickly became a commodity, and the firm's growth soon
evaporated.

Some firms can show tremendous growth for a period of time,


but inevitably, competitors would cut across that and attack the
business castle's advantage, eroding profitability.

6   6  
Wall Mart
The company controls so much retail space that it's
able to demand the lowest possible prices from
suppliers. Because it would take decades of successful
expansion for any firm to match Wal-Mart's tremendous
size and scale, the company enjoys a sustainable
advantage over its competition.

It is a perfect example of low-cost leadership in action.


which enable low sales price or even price undercuts.
Thus keeping its leadership position
for so many years across globe
7  
COCA COLA

The Company constantly pursues all kinds of things to


maintain brand loyalty and image amongst its
customers. Although Coke contends with dozens of
homogenous soft drinks, the company still manages to
charge 20% to 30% more than generic brands. The
reason: consumers identify with Coke and continually
purchase their favorite brand.

Consumers will continually look to reach for their


favorite brands, by paying a premium even if there are
several cheaper generic equivalents on the market.

8  
Top  5  wealth  creator  in  India  

Capital seeks the areas of highest potential return, so


all firms face competition that seeks to force down high
returns on capital.
–  But some firms generate high returns for a very
long time.
–  How?
9  
Let’s  probe    
with  conceptual  mind  

10  
McKinsey  7-­‐S  Framework    

A  tested  tool  for  evaluaEon  


11  
Business Horizons, in its June 1980 issue, formally birthed the
7-S model in an article by Bob Waterman, Tom Peters, and
Julien Phillips titled:
"Structure Is Not Organization."

12  
The  7S  Framework  Origin-­‐  Ensuring  that  all  parts  
of  your  organizaEon  work  in  harmony  
  your  organization  is  positioned  to  achieve  
—  How  do  you  go  about  analyzing  how  well  
its  intended  objective?  This  is  a  question  that  has  been  asked  for  many  years,  and  
there  are  many  different  answers.  Some  approaches  look  at  internal  factors,  others  
look  at  external  ones,  some  combine  these  perspectives,  and  others  look  for  
congruence  between  various  aspects  of  the  organization  being  studied.  Ultimately,  
the  issue  comes  down  to  which  factors  to  study.  

—  While  some  models  of  organizational  effectiveness  go  in  and  out  of  fashion,  one  that  
has  persisted  is  the  McKinsey  7S  framework.  Developed  in  the  early  1980s  by  Tom  
Peters  and  Robert  Waterman,  two  consultants  working  at  the  McKinsey  &  Company  
consulting  firm,  the  basic  premise  of  the  model  is  that  there  are  seven  internal  
aspects  of  an  organization  that  need  to  be  aligned  if  it  is  to  be  successful.  

13  
Seven  S  model  

Concept  used  as  a  measure  of  the  quality  of  the  


performance  of  a  firm,  as  indicated  by  7  factors  so  
interrelated  that  changing  any  factor  may  effect  
changes  in  other  six  factors.    

14  
7  S  Model  –  components  and  inter-­‐linkages  

The  model  depicts  the  interdependency  of  the  elements  and  indicates  how  a  
change  in  one  affects  all  the  others.  
15  
7S  Framework  :  Key  elements  
Shared   Values   in   the   middle   of   the   model  
emphasizes   that   these   values   are   central   to  
development   of   other   criEcal   elements   like  
structure,   strategy,   systems,   style,   staff   and  
skills.   As   the   values   change,   so   do   all   the  
other  elements.    
o "Hard"  elements  are  easier  to  define  or  idenEfy  and  management  
can  directly  influence  them:  These  are  strategy  statements;  
organizaEon  charts  and  reporEng  lines;  and  formal  processes  and  
IT  systems.    
 
o "SoQ"  elements,  on  the  other  hand,  can  be  more  difficult  to  
describe,  and  are  less  tangible  and  more  influenced  by  culture.  
However,  these  soQ  elements  are  as  important  as  the  hard  
elements  if  the  organizaEon  is  going  to  be  successful.  
16  
7S  Framework  :  Hard  S’s  

Strategy:
The direction and scope of the company over the long term.
– Like the plan devised to maintain and build competitive
advantage over the competition

Structure:
The basic organization structure of the company, its
departments, reporting lines, areas of expertise and
responsibility (and how they inter-relate).

Systems:
Formal and informal procedures that govern everyday
activity, covering everything from management information
systems, through to the systems at the point of contact with
the customer
17  
7S  Framework  :  SoM  S’s  
Skills:
The capabilities and competencies that exist within the
company. What it does best.

Shared values:
The values and beliefs of the company that are evidenced
in the corporate culture and the general work ethic.
Ultimately they guide employees towards 'valued' behavior.

Staff:
The company's people resources and how they are
developed, trained and motivated.

Style:
The leadership approach of top management and the
company's overall operating approach.
18  
The  McKinsey  7S  Framework  :  How  to  use  
—  The  model  is  based  on  the  theory  that,  for  an  organization  to  perform  
well,  these  seven  elements  need  to  be  aligned  and  mutually  
reinforcing.  So,  the  model  can  be  used  to  help  identify  what  needs  to  
be  realigned  to  improve  performance,  or  to  maintain  alignment  (and  
performance)  during  other  types  of  change.    

—  Whatever  the  type  of  change  -­‐  restructuring,  new  processes,  
organizational  merger,  new  systems,  change  of  leadership,  and  so  on  -­‐  
the  model  can  be  used  to  understand  how  the  organizational  elements  
are  interrelated,  and  so  ensure  that  the  wider  impact  of  changes  made  
in  one  area  is  taken  into  consideration.    

19  
7S  matrix  –  points  of  impact  

20  
7S  matrix  –  balancing  the  impact  

21  
IllustraEon  :  Opening  of  new  branches  
Strategy:  
—  Opening  branches  at  places  with  complementary  customer  needs  and  
new  market  penetration?  
—  This  would  be  within  the  existing  value  proposition  of  FPD  for  
remaining  Aam  Aadmi  focused.    
—  Inter-­‐linkages  
—  New  product,  new  leadership  team,  new  market  penetration  activities,  new  
MIS,  new  skill  development  activities  
—  Staff,  Skills,  style,  system  
—  Shared  value  
 
Structure:  
—  No  need  of  changing  organization  or  reporting  structure?  
—  However  a  project  team  should  work  to  do  coordination  
—  Inter-­‐linkages  
—  Staff  
—  System  

22  
IllustraEon  :  Opening  of  new  branches  
System  
—  Marketing,  lead  management  and  pre-­‐sales  process  need  refinement?  
Would  involve  process  and  IT  changes  
—  Vendor  appointment  and  logistic  requirement  would  be  key  
—  Infrastructure  issues  at  new  locations  need  to  be  addressed  
—  Financial  evaluation  and  branch  economics  would  be  essential  
—  Need  a  checklist  of  activities  to  pursue  from  beginning  to  finish    with  
well  coordinated  efforts  and  well  defined  line  of  authority  to  execute  
—  Inter-­‐linkages  
—  Skill  
—  Structure  
—  Style  
 Style  
—  Need  quick  decision  with  clear  line  of  authority  
—  Key  decision  persons  need  to  be  in  a  position  to  evaluate  the  market  
potential  and  business  feasibility  
—  Inter-­‐linkages  
—  Structure  
—  Strategy  
—  Shared  values  
  23  
IllustraEon  :  Opening  of  new  branches  
Staff  
—  Need  different  breed  of  people  to  tap  alternate  market  with  specific  
market  oriented  skill.  
—  Need  little  realignment  of  H  R  benefits  structure  
—  Inter-­‐linkages  
—  Skill  
—  Style  
—  System  
 
 Skill  
—  New  market  penetration  would  need  injection  of  specific  skill  set  
—  Core  values  need  to  be  ensured  while  developing  skill  so  that  right  
business  model  is  followed  
—  Inter-­‐linkages  
—  Staff  
—  Strategy  
—  Shared  values  
 

24  
IllustraEon  :  Opening  of  new  branches:  Inter-­‐
linkages  
Staff  
System  

Staff  
Skill  
Skill  
Structure  
Style  
Style  
System  
Shared  values  

Structure  
Staff   Strategy  
Strategy   Shared  values  
Shared  values  
Skill  
System  
Style  
25  
7S  Framework  :  Proceed  to  ask  the  right  
quesEon  
Sounds  simple?  Well,  of  course  not:    
Changing  your  organization  probably  will  not  be  simple  
at  all!      
 
7S  framework  is  not  intended  to  develop  organizational  
strategy,  improving  performance  and  managing  change.    
 
The  7S  model  is  a  good  framework  to  help  you  ask  the  
right  questions  –  although  it  may  not  give  all  the  
answers.  
 
But  directs  attention  to  right  direction.  

26  
7S  Checklist  QuesEons  
Here  are  some  of  the  questions  that  we  will  need  to  
explore  to  understand  our  situation  in  terms  of  the  7S  
framework.  Use  these  to  analyze  our  current  (Point  A)  
situation  first,  and  then  repeat  the  exercise  for  proposed  
situation  (Point  B).  
 
Strategy:    
—  What  is  our  strategy?  
—  How  do  we  intend  to  achieve  our  objectives?  
—  How  do  we  deal  with  competitive  pressure?  
—  Have  we  captured  changes  in  customer  needs?  
—  How  is  strategy  adjusted  for  business  environment  issues?    

27  
7S  Checklist  QuesEons  
Structure:  
—  How  is  the  company/team  divided?    
—  What  is  the  hierarchy?  
—  Who  reports  to  whom?    
—  How  do  the  various  departments  coordinate  activities?    
—  How  do  the  team  members  organize  and  align  themselves?  
—  Is  decision  making  and  controlling  centralized  or  
decentralized?  Is  this  as  it  should  be,  given  what  we're  
doing?    
—  Where  are  the  lines  of  communication?  Explicit  and  
implicit?    

28  
7S  Checklist  QuesEons  
Systems:  
—  What  are  the  main  systems  that  run  the  organization?  
Consider  financial,  business  processes  and  HR  
systems  as  well  as  communications  and  document  
storage  
—  Where  are  the  controls  and  how  are  they  monitored  
and  evaluated?  
—  What  internal  rules  and  processes  does  the  team  use  
to  keep  on  track?    
 
Shared  Values:  
—  What  are  the  core  value,  corporate/team  culture?  
—  How  strong  are  the  values?  How  strategies  are  aligned  
to  such  values  
—  What  are  the  fundamental  values  that  are  offered  to  
customers,  other  stakeholders  and  employees?    

29  
7S  Checklist  QuesEons  
Style:  
—  How  participative  is  the  management/leadership  style?  
—  How  effective  is  that  leadership?  
—  Do  employees/team  members  tend  to  be  competitive  or  cooperative?  
—  Are  there  real  teams  functioning  within  the  organization  or  are  they  
just  nominal  groups?    
Staff:  
—  What  positions  or  specializations  are  represented  within  the  team?  
—  What  positions  need  to  be  filled?  
—  Are  there  gaps  in  required  competencies?    
—  Whether  the  HR  Policy  is  aligned  to  take  care  of  employee  needs  
Skills:  
—  What  are  the  strongest  skills  represented  within  the  company/team?  
—  Are  there  any  skills  gaps?  
—  What  is  the  company/team  known  for  doing  well?  
—  Do  the  current  employees  have  the  ability  to  do  the  job?  
—  How  are  skills  monitored  and  assessed?    

30  
7S  matrix  quesEons  
—  Using  the  information  you  have  gathered,  now  examine  where  
there  are  gaps  and  inconsistencies  between  elements.  Remember  
you  can  use  this  to  look  at  either  your  current  or  your  desired  
organization.  

—  Start  with  your  Shared  Values:  Are  they  consistent  with  your  
structure,  strategy,  and  systems?  If  not,  what  needs  to  change?  

—  Then  look  at  the  hard  elements.  How  well  does  each  one  support  
the  others?  Identify  where  changes  need  to  be  made.    

—  Next  look  at  the  other  soft  elements.  Do  they  support  the  desired  
hard  elements?  Do  they  support  one  another?  If  not,  what  needs  to  
change?    
31  
Good  way  of  looking.  But  not  enough  to  lead  
our  way  to  enduring  strategy  
—  The  concept  is  useful  whenever  we  are  concerned  with  
interdependencies    
—  Meets  our  important  concern  whether  all  necessary  factors  
have  been  evaluated.  
—  Very  important  from  corporate  strategic  interface  with  all  
key  elements  and  execution  of  strategy    
—  But  the  concept  does  not  provide  answer  to  whether  the  
strategy  is  right  
—  Also  silent  on  whether  the  strategy  is  backed  by  
competitive  advantage  
—  Not  linked  to  bottom-­‐line  impact.    

32  
Thanks
Developed by Kalyan Debnath
For

For a copy mail to

treatrisk@gmail.com

33