In recent years, digital transformation has become a popular topic among businesses. Many companies are looking for ways to digitise their operations in order to improve efficiency and competitiveness. The McKinsey 7S framework is one tool that can be used to guide a company’s digital transformation.
Defining digital transformation
Digital transformation is the process of using technology to create new or improved business processes, products, or services. This can be done through the implementation of new technologies, the creation of new business models, or the use of data and analytics to improve decision-making.
Organisations that undergo digital transformation can see significant improvements in their performance. They may experience increased revenues, higher customer satisfaction levels, and greater efficiency.
The McKinsey 7S framework
The McKinsey 7S framework is a popular strategy tool that helps businesses to identify and assess areas in need of improvement. The framework is composed of seven elements: strategy, structure, systems, shared values, style, staff and skills. By evaluating each element, businesses can develop a clearer understanding of where they need to focus their efforts in order to achieve desired results.
The McKinsey 7S framework has been used by countless organisations across a variety of industries as it provides a comprehensive way to address business challenges.
By taking the time to assess all seven elements, businesses can develop an actionable plan that will help them to achieve their desired outcomes.
The framework categorises the 7 elements into “Hard” and “Soft” elements. The hard elements of the McKinsey 7S model are those that are considered to be more tangible and easy to measure. This would include things like strategy, systems, and structure. The soft elements are those that are more intangible and difficult to measure. This would include things like staff, skills, style, and shared values.
To be effective, all seven elements must be aligned and working together. If one of the elements is not aligned with the others, it can create problems and cause the company to lose its competitive edge.
You can find great explaination for the 7S model below in McKinsey website
Let’s define each elements:
1-Strategy
Strategy is one of the seven parts of the framework and refers to the company’s overall plan for achieving its goals. It is what sets the direction for the other six elements. There are a number of different elements that make up an organisation’s strategy, including its business model, competitive advantage, and value proposition.
2-Systems
It refers to the processes and technologies that a company uses to get work done. This can include everything from financial and accounting systems to manufacturing and production systems. Effective systems are essential for any organisation, as they help to ensure quality control and efficient operations.
While all of the elements in the Framework are important, systems are often seen as the backbone of organisations. This is because they provide the infrastructure necessary for success.
3-Structure
It is the organisational structure of a company and how it is set up to achieve its goals.
A company’s structure element includes its hierarchy, its departments, and how these departments interact with each other. The structure element also encompasses the company’s culture, which can either be formal or informal.
The purpose of the structure element is to help a company be efficient and effective in achieving its goals. The right organisational structure will allow a company to use its resources in the most efficient way possible.
Having a well-defined structure can help a company be more successful because it ensures that everyone understands their role within the organisation and how to contribute to the company’s success.
4-Staff
The “Staff” element in the McKinsey 7s framework is the people who work for the organisation. This includes all employees, from top executives to entry-level workers. The staff element is important because it can make or break an organisation.
An effective staff can help an organisation achieve its goals and objectives, while a poorly managed or unmotivated staff can drag down even the best companies. For this reason, it is crucial for organisations to invest in their staff and ensure they have the skills and training they need to be successful.
While the other elements of Mckinsey 7s are important, they cannot function without a strong staff to support them. Without people, there would be no company – it’s as simple as that.
5-Shared Values
The “Shared Values” element in the McKinsey 7S Framework is the set of values and beliefs that guide an organisation’s actions. These values are shared by all members of the organisation and influence everything from decision-making to how work gets done.
Organisations with strong shared values have a clear sense of purpose that drives their actions and decision-making. These values help to create a cohesive culture within the organisation, where everyone is working towards the same goals. Strong shared values can also help to attract and retain top talent, as people are drawn to organisations that align with their own personal values.
6-Skills
The “Skills” element in Mckinsey 7s is the ability of the organisation’s employees to execute the tasks necessary to achieve the organisation’s goals. The skills of the employees must be aligned with the goals of the organisation in order for the organisation to be successful.
The skills of the employees must be continuously developed and improved in order to meet the changing needs of the organisation. The development and improvement of employee skills is a continuous process that should be a part of the culture of the organisation.
The “Skills” element in Mckinsey 7s is a critical component of organisational success. Organisations must ensure that their employees have the skills necessary to execute the tasks required to achieve organisational goals. Continuous development and improvement of employee skills is essential to meeting changing organisational needs.
7-Style
Style is one of the seven elements of the McKinsey 7S Framework. It represents the company’s culture and values, and norms. This includes how employees dress, behave, and interact with each other and with customers. And how these are expressed through the behaviour of its leaders and employees.
Style is often seen as the most difficult of the 7Ss to change, as it is deeply ingrained in an organisation. However, it is also seen as one of the most important factors in determining a company’s success. A company with a strong, positive culture and values that are communicated throughout the organisation will be more successful than one without these things.
For example, a company that is risk-averse may miss out on opportunities for growth. On the other hand, a company that takes too many risks may find itself in financial trouble. Thus, finding the right balance is key when it comes to style.
Applying the 7S in digital transformation
McKinsey 7S is One frameworks that can be used to assess and guide a company’s digital transformation efforts. The 7S Framework was originally designed as a tool for organisational analysis, but it can also be used to analyse individual businesses or business units within a larger organisation.
The 7S Framework is a critical aspect of digital transformation in a company. It is used to help the organisation assess itself, find areas where they can improve, and determine what they should be focusing their efforts on.
When you digitally transform a company, it is important to start with the strategy. What is the company trying to achieve? What are its goals? Once these have been established, the next step is to look at the structure of the organisation. Is it set up in a way that will allow it to achieve its goals? The third step is to look at systems. What systems does the company have in place and how can they be improved? The fourth step is to look at shared values. What are the values of the organisation? The fifth step is to look at people. How can they be motivated to achieve these goals?,..etc.
Similar to the Digital Maturity Assessment, companies can assess the organisation against the 7S elements and identify areas where they can improve, and determine what they should be focusing their efforts on.
Benefits of using the 7S in Digital Transformation
There are many benefits to using the 7S framework in digital transformation:
- It helps to create a comprehensive plan for the transformation. It provides a roadmap for successfully implementing and sustaining the changes throughout the organisation. This can be used to define the transformation strategy and to align the organisation and stakeholders around it.
- The framework also helps companies understand their business better, and what are the elements that will impact the digital strategies of a company. Once the framework is defined, it will be easier for them to create a plan for the execution.
- It establishes clear roles and responsibilities for each team member involved in the transformation. It helps to identify the gaps and address them.
- The 7S framework can also help in creating a culture of change management within the organisation and to develop a leader who can champion the transformation.
- It helps to ensure that you don’t miss any element of the transformation.
The 7S framework is an invaluable tool for any organisation undergoing a digital transformation. By following the framework, organisations can be sure that they are taking all the necessary steps to ensure a successful transformation.
Conclusion – McKinsey 7s and Digital Transformation
In conclusion, it is evident that the digital transformation of an organisation can be approached through the McKinsey 7S framework. The framework provides a comprehensive and systematic way to identify areas of improvement and digitise them. It also offers a flexible way to change and adapt the digital transformation process according to the specific needs of the organisation.
