Mckinsey 7s Model - Guide, Examples And Templates (2025)

The McKinsey 7S Model was developed in the late 1970s by McKinsey consultants Robert Waterman, Tom Peters, and Julien Philips. The model provides a framework for assessing organizational alignment and performance.

The McKinsey 7S Model is designed to help organizations identify misalignments across seven interconnected elements – strategy, structure, systems, skills, staff, style, and shared values.

Although, it was originally developed to address internal alignment issues, the model is now frequently used during major organizational changes like mergers, restructuring, or digital transformations.

The goal of using the model is to ensure that every internal component is coordinated and supports the company’s strategic goals. The goal os using it is to ensure all elements are reinforcing rather than conflicting.

Because the model takes a holistic approach, it provides leaders with a key framework for managing complex transformations.

Table of Contents

Explanation of the McKinsey 7S Model Elements

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The McKinsey 7S Model divides organizational elements into two categories: hard elements and soft elements. Hard elements, such as strategy and structure, are easier to identify and manage, while soft elements, like shared values and skills, are more intangible and deeply rooted in company culture.

Hard Elements

Strategy

In the McKinsey 7S Model, the strategy element refers to the long-term plan an organization develops to achieve its goals and maintain competitive advantage. Strategy involves positioning, market entry, and expansion plans.

This includes the vision, mission, and goals, as well as the actions and resource allocation that support achieving these targets. Strategy is typically shaped by external market conditions, internal capabilities, and the need for differentiation from competitors.

It involves deliberate choices regarding product offerings, customer segments, market positioning, and growth opportunities. In business, strategy also accounts for evolving technological, economic, and regulatory landscapes.

NOTE:Strategy should be dynamic, continuously refined based on market feedback, competition, and changing conditions. It is not just a static but an ongoing adaptive process.

Applied to the 7s Model, Starbucks’ strategy to expand into new global markets required changes instafftraining and localsystems to accommodate cultural differences.

Structure

Structure defines the organizational hierarchy, roles, and reporting lines. Adjusting the structure is often the first action taken during reorganizations.

However, just changing structures can damage culture and cause problems with motivation. That is why, this element must be aligned with other elements, such as shared values, skills and staff motivation, to avoid misalignment.

As an example, companies like Amazon have adopted more flexible structures that allow for rapid decision-making and experimentation, which aligns with their fast-paced innovation strategy.

Take Tesla, for example. As it expanded its electric vehicle strategy, the company adjusted itsstructureto promote agility and innovation.

It also invested heavily inskillsby hiring top engineers to develop autonomous driving technologies. Without alignment across all elements, Tesla would not have been able to scale as rapidly while maintaining its competitive edge.

However, structure changes must be carefully managed to avoid disconnects withshared valuesorstaff.

NOTE:A highly centralized structure may be effective for tight control and efficiency, but it can stifle creativity and slow decision-making.

Systems

Systems include all the processes, workflows, and technologies that guide the organization’s daily operations and decision-making.

In addition to enabling operational efficiency, systems also influence key business decisions, particularly in fast-paced industries such as tech. This means that upgrading systems is essential for maintaining agility during periods of digital transformation or market shifts.

Example here is Nike. Nike’s digital strategy required a fundamental shift, not just in operations to enable efficiency gains, but also in how it delivered and captured value.

Modularization allowed customers to personalize shoes directly on their e-commerce platform, while digital apps like Nike Run Club and Nike Training Club enabled personalized fitness tracking and coaching.

Additionally, Nike integrated its offerings into other digital ecosystems, such as Apple Health and smartwatches, enhancing user experience across multiple platforms.

This approach required significant updates to internal systems to support seamless customization, real-time data analytics, and cross-platform integrations, ensuring Nike could effectively execute its customer-centric digital strategy.

NOTE:Systems can be a source of competitive advantage if they are highly efficient or technologically advanced. They can also serve as bottlenecks if outdated or misaligned with strategy.

Soft Elements

Shared Values

Shared values sit at the heart of the McKinsey 7S Model and are the foundational beliefs that guide the organization. Shared values are the basis for building the organization’s culture; moreover, they should guide every decision made by its leadership.

Misalignment of shared values with strategy or leadership style hinders organizational changes or transformations. Rather than enablers they become barriers to change.

Zappos, which is known for its great customer service has a set of unifying shared value that guide decisions and employees’ actions and ultimately build a culture in complete alignment with its strategy.

NOTE:Shared values are the glue that binds all other elements together. They often shape informal culture and employee engagement more deeply than formal policies.

Style

Leadership style influences organizational culture and employee engagement. A participative leadership style, as seen in Google, fosters creativity and innovation which aligns with the company’s focus on pushing boundaries and encouraging experimentation.

NOTE:Leadership style can directly impact employee motivation and engagement. A mismatch between leadership style and the needs of the business can cause friction.

Staff

This element of the McKinsey 7S Model focuses on the organization’s human resources. The people who are recruited, trained, and retained to drive the company’s goals.

During growth or transformation, companies must ensure they have the right talent pool to achieve their strategic goals. Without adequate realignment of thestaffelement, strategic changes can fail.

NOTE:Talent management goes beyond hiring; it involves career development, performance management, and maintaining an agile workforce. Organizations that neglect ongoing training or fail to match employee competencies with evolving business needs will struggle to remain competitive.

Skills

Skills, in the McKinsey 7s model, refer to the competencies and expertise required to execute strategy. Skills are often dynamic because an organisation has to adapt to changes in the business environment which often change the talent needed.

As an example, many companies are seeking to harness talent related to AI and are having to compete with a limited pool of AI talent.

Also, firms need to regularly conduct a skill-gap analyses to ensure that employees are equipped with the knowledge and capabilities to carry out new strategies or embrace new technologies. As an example, train staff on cybersecurity, AI prompts to ensure security of intellectual property but also to improve productivity.

NOTE:Skills must be constantly updated. This element also includes the organization’s institutional knowledge and intellectual capital – whether its expertise in core areas differentiates it in the marketplace.

Interconnectivity of the McKinsey 7S Elements

A change in one element of the McKinsey 7s model inevitably affects the others, creating a “domino effect.”

For example, if a company adopts a digital transformation strategy but does not invest inskillstraining or update itssystems, the transformation is likely to fail.

Similarly, a shift inshared valuesrequires adjustments in leadershipstyleand howstaffare trained and motivated. The key point is that the MCKinsey 7S Model forces leaders consider how to maintain balance across all elements.

Example: If a tech company switches to a remote-first model (structure change), it must adjust itssystems(e.g., implementing better digital collaboration tools) andskills(e.g., training employees on remote work technologies). Without alignment, the company risks reduced productivity and engagement.

Applying the McKinsey 7S Model

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Analyzing Each Element: Start by conducting a thorough review of all seven elements—strategy, structure, systems, skills, staff, style, and shared values—to identify misalignments. Questions to consider include:

  • Are the current systems equipped to support our strategy?
  • Does the structure encourage efficient decision-making and accountability?
  • Are skills and staff aligned with future goals?

Define the Desired State: Define the ideal alignment by examining industry best practices or similar companies. Setting clear objectives for alignment creates a strategic direction that informs the creation of the action plan. For instance, benchmark against market leaders and consider questions such as:

  • How does our organizational structure compare to successful competitors?
  • What values will guide us through this change process?
  • Does our current staff have the skills necessary to meet future needs?​

Develop an Action Plan: Craft an actionable roadmap, including changes to systems, structure, or skills. This requires mapping out a detailed roadmap that specifies key projects, strategic objectives, and performance indicators (KPIs).For example:

  • Does the current IT infrastructure support planned changes in digital strategy?
  • What training programs or external hires are necessary to fill skill gaps?
  • How will management style and employee engagement evolve during change?​

Monitor and Track Progress: Continuous review is essential. Implement a tracking system that monitors each element for alignment. This could involve regular check-ins with teams, performance indicators for new systems, and metrics to track whether staff is meeting newly defined skill expectations​.

Adapt and Realign: Review each element consistently and adjust plans as needed. Misalignments will resurface over time, especially as market conditions change. Adapt your strategy or style based on real-time feedback and external market shifts​.

Use Supplementary Tools: To better align the internal 7S framework with the external environment use tools like the PESTLE analysis. Consider external market trends (political, economic, technological changes), that are likely to change the strategy and internal elements.

Benefits and Challenges of Implementing the McKinsey 7S Model

The McKinsey 7S Model presents several advantages, notably its capacity to provide a comprehensive perspective on the internal operations of an organization. It assists leaders in comprehending how each component contributes to the overall success of the company and how misalignments may hinder progress.

However, implementing the McKinsey 7s model comes with challenges:

  1. Soft Elements: Adjustingshared valuesandstyleis more difficult than changing systems or structures. These elements are deeply rooted in the company’s culture, and changing them requires sustained effort and commitment from leadership.
  2. Maintaining Alignment: It’s not enough to implement changes once. Continuous adaptation, meassurements, and review are critical to ensure that all elements remain aligned. For example, companies like Microsoft have maintained long-term success by regularly realigning theirsystemsandskillsin response to new technologies.
  3. Balancing Short and Long-Term Goals: There is a need to balance immediate operational needs with long-term cultural changes. Focusing too much on short-term financial performance without addressing deeper misalignments inshared valuesorskillscan hinder long-term growth.

Nokia: A Case Study Through the Lens of the McKinsey 7S Model

Nokia provides a compelling example of how the McKinsey 7S Model can support organizational change.

Once the world leader in mobile phones, Nokia struggled to adapt to the smartphone revolution. Nokia didn’t align the Mckinsey 7s model elements during the rise of smartphones which provides a cautionary tale to how fast things can change.

  • Strategy: Nokia initially focused on hardware innovation but failed to shift toward software development, which became the core of modern smartphones. This strategic misalignment with industry trends led to the company’s decline.
  • Structure: Nokia’s hierarchical structure slowed decision-making and stifled innovation. Competitors like Apple and Google, with flatter structures and more agile development processes, rapidly overtook them.
  • Systems: Nokia’s internal systems weren’t designed to handle rapid software development cycles, leading to delays and underperforming products.
  • Skills: The workforce was primarily skilled in hardware, with limited expertise in software development. This skill gap was a critical factor in the company’s inability to compete with Apple and Google.
  • Staff: As Nokia’s market share shrank, retaining top talent became difficult, compounding its inability to pivot toward new technologies.
  • Style: Leadership at Nokia was slow to recognize the threat posed by new competitors and was reluctant to shift from the company’s successful hardware-focused business model.
  • Shared Values: Nokia’s culture was deeply rooted in hardware innovation, making it difficult to embrace the shift toward software-centric smartphones.

Nokia is just one of many case studies on failure – there are different lenses to view the failure though – this is just one way of viewing why they went from one the most loved brand in the world in 2007 to obsolete.

It demonstrates the importance of holistic alignment across strategy, skills, and shared values when undergoing industry shifts.

Digital Transformation and the McKinsey 7S Model

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Digital transformation efforts often fail, with studies showing that around70%of initiatives do not meet their targets.

Source: BCG

Common Failures in Digital Transformation

  • Overlooking the ‘Soft Elements’: Many digital transformation efforts fail because organizations focus solely on systems and strategy while neglecting skills, staff, and shared values. Address this by:
    • Conducting skill gap analyses and offering upskilling opportunities.
    • Aligning values with the transformation, such as fostering a culture that embraces change​.
  • Neglecting Organizational Culture: Many companies fail to manage the cultural aspect of transformation. To mitigate this, ensure that leadership advocates for change and that shared values are realigned with strategic goals​. To address this challenge:
    • Leadership Advocacy for Change: Leadership must be active in promoting the change and realigning shared values. In successful transformations, like those seen at Microsoft under Satya Nadella. The new leadership championed a culture shift to make innovation and collaboration central values within the organization.
    • Integrate Change at Every Level: Ensure that change is implemented not just at the top, but throughout the organization. This includes adjustingstaffmotivation andstyleof leadership. For instance, companies like Amazon use flat reporting structures and promote more agile, team-based approaches to leadership, ensuring alignment with new technological capabilities​

Applying the McKinsey 7s Model To Digital Transformation

Digital transformation presents one of the most complex challenges organizations face today. To ensure success, every element of the McKinsey 7S Model must be realigned to support the company’s new digital strategy.

  • Strategy: A clear digital strategy outlines how technologies can be harnessed to support strategic goals. Prioritize digital innovation, leveraging data analytics and automation to drive operational efficiency and create new customer value propositions.
  • Structure: Agile structures are needed to support digital initiatives. Restructure for agility, establishing dedicated digital teams or flattening hierarchies to accelerate decision-making and execution in tech-driven initiatives.
  • Systems: Implementing new and emerging digital tools, such as artificial intelligence, must be accompanied by integrated systems that support existing workflows or produce more automated and effective new ones. Upgrade core systems to cloud-based platforms, integrated CRM, and advanced analytics tools, ensuring seamless, scalable operations that support data-driven strategies.
  • Skills: One of the biggest challenges in digital transformation is upskilling or reskilling the workforce. Reorient talent strategy to recruit and develop digital experts. Upskill existing employees to meet the evolving demands of a digitally transformed environment.
  • Staff: Digital transformation requires not only new talent but also a cultural shift within existing teams. Build capabilities in digital tools, data science, and agile methodologies, to ensure the workforce is equipped to execute on digital transformation objectives and sustain competitive advantage.
  • Style: Shift leadership approach to be more collaborative and adaptive, promoting cross-functional teams and encouraging rapid experimentation and iterative improvements.
  • Shared Values: Embed a digital-first culture, fostering innovation, agility, and a willingness to adapt. Align values across the organization to support and sustain digital transformation.

Conclusion

The McKinsey 7S Model is a useful framework for assessing and improving organizational alignment, especially during periods of transformation or change.The most successful organizations use the 7S Model not only as a diagnostic tool but also as a continuous alignment process.

Related Strategy Frameworks

Here are strategy frameworks related to the McKinsey 7S Model:

  • Porter Five Forces:Analyzes industry competition and profitability.
  • SWOT Analysis:Assesses strengths, weaknesses, opportunities, and threats.
  • BCG Matrix:Evaluates product portfolios based on market share and growth.
  • Balanced Scorecard:Tracks organizational performance across financial and non-financial metrics.
  • Ansoff Matrix:Guides decisions on market growth strategies (market penetration, development, diversification).
  • PESTLE Analysis:Examines external factors (Political, Economic, Social, Technological, Legal, Environmental).
  • VRIO Framework:Assesses internal resources for competitive advantage (Value, Rarity, Imitability, Organization).
  • Blue Ocean Strategy:Focuses on creating uncontested market space for innovation.
  • OKR (Objectives and Key Results):Aligns company goals with measurable outcomes.
  • GE McKinsey Matrix:Prioritizes investments across business units based on industry attractiveness and competitive strength.

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Mckinsey 7s Model - Guide, Examples And Templates (2025)
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