The McKinsey 7-S Model: Definition, Pros and Cons

Executives in Prosci research on executive engagement say strategic acumen is a critical attribute in change practitioners. 

To demonstrate these skills, change professionals can use change management models such as the McKinsey 7-S Model. This change framework analyzes seven critical internal elements to ensure they align with strategic organizational goals.

In this article, we explore how the McKinsey 7-S framework works and dive into its pros and cons. We also compare it with the Prosci Methodology to highlight where they differ, and how they can be used together to achieve successful change.

What Is the McKinsey 7-S Model?

The McKinsey 7-S Model is a tool for strategic change management. It is designed to help organizations assess and optimize their internal alignment during a change initiative.

Developed in the 1970s by Robert Waterman and Tom Peters, the model examines seven internal elements that must be aligned for successful organizational performance and sustainable change.

The elements of the McKinsey 7-S Model are divided into hard and soft categories.

Hard elements

The hard elements, or “Hard S’s,” are more tangible, easier to identify, and often directly influenced by management decisions. They include:

• Strategy – The plan designed to achieve a competitive advantage and meet organizational change goals.
• Structure – How the organization is arranged, including roles, responsibilities and hierarchies.
• Systems – The daily activities, procedures and processes people use to do the job.

Soft elements

The soft elements, or “Soft S’s,” are more abstract and rooted in the organization's culture and people. They are less tangible and harder to measure but equally vital to overall effectiveness. They include:

• Shared Values – The core beliefs and values that are ingrained in the organizational culture and drive behaviors.
• Skills – The capabilities and competencies of employees within the organization.
• Style –  The organization’s leadership approach and corporate culture.
• Staff – The types and levels of employees in the organization.

This change management model focuses on coordination between all areas of the organization. By examining each element, change teams can identify inconsistencies and make improvements to create a cohesive change management strategy for smooth transformations.

The model is often visualized as a web or circle, illustrating that all elements are interconnected, with Shared Values at the center. So, all the components must be aligned and mutually reinforcing for an organization to operate effectively and achieve change objectives.

The McKinsey 7-S Model

The 7 Elements of the McKinsey 7S Framework 

Let's take a closer look at the seven key elements of the McKinsey 7S Model:

1. Strategy

Organizations focused on innovation with purpose need a change strategy that aligns with their business goals. The Strategy element guides the overall direction and helps allocate resources effectively. It defines unique value propositions, outlines the specific markets to target, and outlines the critical actions required for change success.

2. Structure

This element refers to how the organization is arranged, including the hierarchy, reporting lines and departmental roles. A correctly design and well-defined structure should align with the organization’s strategy, enabling clear communication channels and efficient decision-making. 

The Structure element can range from rigid, hierarchical arrangements to flexible, decentralized designs, depending on the organization's needs.

3. Systems

Systems are the processes, tools, and workflows that support daily operations. They include the organization's information systems, employee evaluation procedures, and financial tracking methods. 

Well-designed systems simplify activities and increase productivity. This ensures smooth operations, upholds quality standards and supports the strategic direction of the change.

4. Shared Values

At the core of the 7S Model, Shared Values represent the fundamental beliefs and norms that shape the organization's culture. These values influence key decisions and how they’re made. They also guide employee behavior.

Change practitioners must consider cultural factors when planning and implementing transformations.

A strong, unified set of core values helps bind the organization together. This is vital during the change process, as a scattered workforce can increase resistance and hinder transformations.

5. Style

The Style element pertains to the leadership and management approach within the organization. It encompasses how leaders interact with employees and the way they influence the organizational culture. Effective leadership style is crucial during the change process, as it directly impacts employee morale and engagement. Leaders who embody the organization's core values and inspire their teams can drive successful transformations. 

The ideal style is one that aligns with the organization's values and fosters an environment where employees are motivated to perform at their best. By adopting a leadership style that supports and encourages open communication, collaboration, and innovation, organizations can navigate change more effectively.

6. Staff

Staff is the organization's human resources—its employees and their roles. This element considers recruitment, development and retention practices to ensure the organization has the talent and provides training programs to meet its objectives.

7. Skills

These are the organization's current capabilities and expertise. This includes employees' technical skills and the organization's unique competencies. Ensuring that employees have the right skills is crucial for change success. Practitioners must identify and address any skill gaps to develop a resilient workforce that can provide a competitive edge.

The McKinsey 7-S Model of organizational analysis and change management gives practitioners a holistic view of areas that must be realigned to improve performance during change.

McKinsey 7-S Model Pros and Cons

Advantages of the McKinsey 7S Model

Here's an in-depth look at the advantages of the 7S Model:

1. Holistic view of the organization

The McKinsey 7S Model covers tangible (hard) and intangible (soft) elements that drive an organization's performance. This can be a diagnostic tool during transformations, helping plan, execute and manage changes more effectively. 

It provides a deeper understanding of how interconnected elements contribute to success. This helps practitioners build a comprehensive strategy without missing any crucial areas.

For example, the model shows that an effective strategy alone cannot garner positive results. You also require a suitable organizational culture and skilled staff to support the change.

2. Enable organizational alignment

The 7S Model is valuable for aligning organizational elements with strategic goals. By analyzing the interconnectedness of each "S," organizations can identify misalignments that may hinder progress. This can include a mismatch between the organization's structure and strategy or between leadership style and shared values.

This alignment process helps ensure that every part of the organization supports the others, leading to better operations and a clearer focus on shared objectives.

3. Improve strategic planning

The model focuses heavily on strategic planning. Leaders can assess all the areas required for executing the strategy and identify gaps that need strengthening.

For example, if an organization wants to improve innovation, the 7S Model prompts a review of skills, structure and culture to ensure they focus on creativity and collaboration.

The model also prevents organizations from using a one-size-fits-all approach to problem-solving. By promoting a balanced approach, it enables practitioners to assess impact accurately and prevent negative consequences.

4. Adaptable across industries

The McKinsey 7-S Model is applicable across different industries, business types and sizes. It provides a universal model for analyzing organizational effectiveness, making it an appropriate tool for enterprises, nonprofits, government agencies and any other business looking to enhance performance through better internal alignment.

While the McKinsey 7S Model offers advantages, it is also important to consider its potential drawbacks and limitations. Understanding these can help organizations apply the model more effectively and address any challenges that may arise during its implementation.

Drawbacks and Limitations of the McKinsey 7-S Model

While the McKinsey 7-S Model is a widely used framework for organizational analysis, it has four major limitations that may impact its effectiveness:

1. Static nature in a dynamic environment

The 7-S model is best suited for stable or gradually changing environments. It may lack flexibility in rapidly shifting industries.

It doesn't provide a clear framework for adapting to sudden or unexpected changes in the market, technology or customer needs. This makes the McKinsey 7-S framework less suited for highly dynamic sectors.

The 7-S Model is primarily an internal analysis tool focusing on elements within the organization. It overlooks the external environment and factors like market trends, competition, regulatory changes and technological advancements, which can be critical for strategic planning.

Businesses facing volatile market conditions may find the model too rigid for their needs, preferring a more dynamic change management approach. Change practitioners can also use the McKinsey 7-S Model with another change framework for better outcomes.

2. Complexity

One of the model's strengths—the connection of its elements—can also be a limitation. Since each component influences the others, analyzing and implementing changes can become complex and time-consuming.

Reevaluating multiple other elements for every change hinders quick decision-making and action, particularly in fast-paced environments. It also makes it harder to find straightforward solutions during implementation.

3. Lack of prioritization

The McKinsey 7-S Model does not inherently prioritize which elements to focus on during an analysis. Without clear direction, organizations might struggle to identify the most critical areas for improvement, leading to scattered efforts or overlooking high-impact changes.

So, organizations usually need external change management expertise to determine where to focus, especially when they have limited resources or time.

4. Not people-centric

The McKinsey 7-S framework is a holistic approach focused on the organization as a whole rather than the individual change journey. The model examines Staff as one of seven elements, but it is not the main priority.

This can be a disadvantage as employee experience is a key driver of positive change outcomes. A recent study showed that employees at people-centric organizations are 12 times more likely to say change was well-managed and 11 times more likely to see their experiences with change as positive.

Employees who are not adequately equipped or supported during a transition are more likely to resist the change. This resistance may lead to failed change initiatives and wasted resources.

Given these limitations, it's beneficial to explore how other models, such as the Prosci Methodology, might complement the McKinsey 7-S Model. By comparing these frameworks, organizations can better understand how to integrate strategic planning with effective change management practices, ensuring a more comprehensive approach to organizational transformation.

Comparing the McKinsey 7-S Model With the Prosci Methodology

The McKinsey 7-S Model and the Prosci Methodology are popular change management models with distinct approaches and applications.

While the 7-S Model focuses on aligning internal elements, the Prosci Methodology centers on the human aspects of change and provides a structured process for implementing change within organizations.

Here's a comparison of the models across six key areas:

Purpose and focus

The McKinsey 7-S Model is primarily a tool for assessing and aligning seven internal organizational elements. It is often applied to align a company's strategic goals with its internal setup.

The Prosci Methodology focuses explicitly on change management, addressing how change affects individuals within an organization. It is widely used for initiatives like digital transformation, process changes, or cultural shifts.

Structure and components

The McKinsey 7S Model divides elements into "hard" (strategy, structure, systems) and "soft" (shared values, skills, style, staff) components, creating a broad framework for organizational analysis. Each element is interconnected, so changes in one area will likely impact others.

This is more complex than a linear implementation process, like the Prosci 3-Phase Process, which provides a step-by-step approach to achieving successful organizational change. By focusing on the stages people must go through to adapt to change, Prosci offers a more straightforward, structured approach.

Proactivity in resistance management

The McKinsey 7-S Model is a holistic approach to organizational structure rather than a people-centric methodology, so there are no specific measures for proactive resistance prevention.

Preventing resistance is easier, less expensive and more effective than responding to resistance during implementation.

The Prosci Methodology includes the Prosci ADKAR® Model, which focuses on change at the individual level. By going through the ADKAR Model’s individual change elements and using the 3-Phase Process, organizations can prevent resistance by proactively identifying and addressing barrier points.

Reinforcement

The 7-S Model does not focus on sustaining and reinforcing change, missing out on a vital aspect of successful change management. Sustainment helps embed the new behaviors and processes into the organization so that the change fully realizes its intended benefits over time.

Without reinforcement, employees can fail to adopt new working methods into their daily habits, forcing organizations to redo training, communication and other change management activities. This is time-consuming and expensive.

Reinforcement increases the chances of change success and supports a culture of continuous improvement that makes the organization resilient to future changes.

The Prosci Methodology understands this, which is why the Reinforcement element is the final part of our ADKAR Model. By applying reinforcement activities, like rewards, celebrations, corrective actions and feedback, practitioners can ensure that change outcomes are sustained.

How the McKinsey 7-S Model and the Prosci ADKAR Model Align

While the basics of the models match, practitioners can use the McKinsey 7-S Model specifically with the ADKAR Model to achieve better results. Here's how these two approaches align:

1. Awareness and Shared Values

Building Awareness is the first stage of the Prosci ADKAR Model. It involves explaining the reasons for change to employees so they are more likely to understand, accept, and participate in the change.

Here, the Shared Values element of the McKinsey 7-S Model can help build awareness by aligning the organizational culture with the change goals.

Leadership style is also a factor in creating awareness. Leaders or sponsors who are trusted are better able to explain why change is necessary.

2. Desire and Style

The Desire element of the ADKAR Model is about motivating employees to make the personal decision to support the change. An active and visible leader or sponsor plays a role in building this desire.

This relates to the Style element of the 7S Model, which examines how managers and leaders interact and the actions they take. 

Both models encourage collaborative, supportive leadership styles that increase engagement and commitment. Leaders or sponsors should actively participate and communicate the benefits of the change.

Prosci research shows that 79% of change initiatives with extremely effective sponsors met or exceeded their objectives, compared to just 27% of projects with extremely ineffective sponsors.

Correlation of Sponsor Effectiveness With Meeting Objectives

3. Knowledge and Systems

In the Prosci ADKAR Model, Knowledge guides employees on how to change and perform effectively in the future. Practitioners provide this information through training programs and coaching.

In the 7-S Model, knowledge about the change is spread using systems for knowledge-sharing, like learning platforms or communication tools. Systems for training are also built to prepare employees.

By combining the Prosci ADKAR Model with the 7-S Model, change professionals can effectively provide information and ensure that the right people are in the right roles to enable targeted knowledge transfer.

4. Ability and Skills

The Ability element of our ADKAR Model focuses on individuals learning and applying new skills and behaviors to their roles.

By combining the Ability element with the Skills element of the 7-S Model, practitioners can develop individuals’ skills and ensure they align with organizational capabilities. They can also provide training and support to build crucial skills required for the change.

Implementing the required skills also requires alignment with the Structure part of the McKinsey 7S framework. The organization's hierarchy and workflow must support employees in their new roles and remove barriers to applying new skills.

Reinforcement ensures that changes are sustained through ongoing support and rewards.

Alignment with the 7-S Model for this element includes creating and assessing Systems for performance management, including mechanisms to monitor, reward and reinforce new behaviors.

Finally, the Reinforcement activities in our ADKAR Model can be combined with the Shared Values aspect of the 7-S Model to help embed new working methods and behaviors.

Prosci Guides Successful Change Management

The McKinsey 7-S Model is often used for organizational alignment, but it has pros and cons. Simply put, it falls short when it comes to change management. Relying on this framework alone can leave organizations floundering without the tools needed to effectively guide their teams through transformation.

Enter the Prosci Methodology—a dynamic, structured approach that tackles the human side of change head-on. It empowers employees, ensuring they’re actively engaged in the transition. By merging the McKinsey framework with the Prosci robust change management principles, you can create a powerful, comprehensive strategy that drives real results. Don't settle for a one-dimensional approach; embrace a holistic strategy that champions both structural alignment and the essential people dynamics that lead to success.