In the late 1970’s, McKinsey & Company developed the 7-S framework as a way to conceptualize the various aspects of a successful organization, (Enduring Ideas: The 7-S Framework 2008). Prior to this model, leaders and managers commonly thought about organizations in terms of structure. The CEO sat at the top. They would report to the Board of Directors, and would have a group of executives reporting to them. This broke down into Marketing, Accounting, R&D, HR, and other areas where the business needed to focus. But structure doesn’t equate to strategy or success. The 7-S model aimed to replace that thinking by describing 7 different aspects of any successful organization and showing how interrelated they all are. These areas are:
- Shared Values
I will be going through these one by one and showing how different leadership theories are better suited for each of the 7 areas, demonstrating that a successful organization may outperform others by using a variety of leadership styles.
What is the purpose of the organization? What are the company’s overall goals? What does it mean to be a part of this team? Values are highly abstract ideas that get to the heart of how we feel about things. For an organization like The New England Patriots, the values center around excellence and vying for the NFL Championship every single season. For the Red Cross, the shared values center around the desire to help victims of disasters at the time they are most in need. For a labor union, the values will likely be about providing well-paying jobs, safety and job security to its members. Every organization is different, but truly successful organizations have shared values that everyone can get behind and use as a personal driving force. This is where transformational leadership is extremely powerful. Transformational leaders motivate followers by engaging their need for meaning in their work, life and career, (Northouse, p. 162). Bill Belichick (the Head Coach/General Manager of the New England Patriots) taps into his players’ desire for accomplishments and championships, then demands nothing short of excellence out of each of them.
You cannot get to your destination without a roadmap. Every organization needs to be planning ahead and thinking about where they want to be in the next year, 5 years, decade, and beyond. For some, it may be more about maintaining what they have and continuing to hold their place in the market. For others, it may be about achieving significant growth or venturing into new markets with new products or services. But development and following of an organizational strategy requires leadership best described by the Path-Goal theory, (Northouse, p. 115). Leaders need to be attuned to the work needs of their followers and need to provide them with the tools and motivations necessary for attaining the goals set forth. When developing and executing strategy, leaders have to have a strong grasp on internal talents and capabilities while also motivating their teams to accomplish the goals set forth. For these reasons, focusing on strategy will require a path-goal leadership approach.
Most successful organizations rely heavily on people. Staffing an organization requires recruitment efforts that are great at finding the right kind of people who have high potential to succeed within that organization. But once those individuals are on-boarded and working, they need to be able to work among others with similar skills and aspirations. And this is where Team Leadership works so well, (Northouse, p. 363). Leaders need to coordinate employee activities and progress towards specific goals that are aligned with the strategy and shared values of the company. Team leadership focuses on the leadership style to recognizes the need to organize team efforts and motivate employees as a group, not just individually. It’s not enough that individuals are motivated or are working on specific tasks diligently and effectively. They need to be doing so in the context of a larger group with larger goals. For this reason, team leadership is most effective when dealing directly with the staff of an organization.
Systems are the processes and procedures involved in accomplishing the day-to-day activities of an organization. How does the salesman onboard a new client? How does HR handle complaints from employees? How often are C-Suite meetings held, who sets that agenda and who’s allowed or required to attend. Every organization needs to have a well-defined method of getting the daily and weekly tasks accomplished. One could make the argument that systems require management, not necessarily leadership. But to the extent that leadership is required here, I’d argue that the Skills approach is most appropriate, (Northouse, p. 44). The leader needs to have the technical skill and organizational understanding to oversee the systems and processes that the company undertakes. They need to have the human skills to make sure people are motivated to get the work done.
Style can be thought of as the culture of the organization, the overall attitudes, or simply the way people behave around one another at the office and within the organization. There’s an old business saying coined by Peter Drucker; “Culture eats strategy for breakfast,” (Rick, 2020). If true, (Drucker was a pretty smart guy, so it’s a safe assumption) we can see that this is an essential aspect of running a successful organization. If those around you are working hard and taking pride in their work, you’ll be more likely to do the same. If everyone is working slowly and taking little care to get things right, then you’ll feel less pressure to perform yourself. The situational approach to leadership seems the best suited to this organizational aspect, (Northouse, p. 93). Leaders need to be able to assess the situations at hand and make appropriate decisions based on that. These leaders need to be extremely attuned to the feelings, behaviors and culture of the organization, but a certain finesse is necessary to maintain morale and overall focus. A good leader will understand when to inspire, when to offer incentives, and when to crack the proverbial whip in order to keep the culture strong in their organization.
Skills can refer to the talents of the individual employees, or to the organizational skills overall. As an example, Apple Computers has many tremendously talented individuals working in their research and development division. But only the organization as a whole has the skill to create brand new technologies, build them, and get them to the consumers who want them. As the name implies, the Skills approach to leadership is best suited to this area, just as it was to the systems aspect, (Northouse, p. 44). Leaders here need to have a strong understanding of the technical aspects of their organizations and what skill sets are needed in the staff to make those areas function best. They also need the human skills to work with those people and ascertain what skills the people may need to further develop via training or continuing education.
Rounding out our discussion of the 7-S model is the Structure of the organization, the very thing that too many executives focused on excessively prior to the introduction of this model. There are a huge number of potential structures that a large organization can take. None seem to be demonstrably better than others, but an organization must choose one that works well with their strategy, systems, style and shared values. On the one hand, one might argue that the structure of an organization requires little leadership as it’s more of a description of how they are organized. But I would argue that structure requires both transformational leadership, (Northouse, p. 161) and skill based leadership, (Northouse, p. 44). The leader needs to have the skill to understand how the pieces of the organization fit together and operate. But they also need to be able to make large scale changes when necessary and called for. This might include eliminating divisions, positions, or just reorganizing the c-suite. Such moves can be extremely disruptive to the processes of a company, but also to the overall culture or style. This is where a good transformational leader can inspire his team and company to get onboard with the changes in the quest for improved company performance.
Strong companies and organizations require a large variety of leadership styles. As demonstrated by the McKinsey 7-S model, these organizations are also incredibly complex entities, with many aspects that need to work in alignment with one another, all focused on an overarching goal and on the shared values of the organization. By thinking about the leadership styles best suited for each area, we can use the McKinsey 7-S model along with a variety of leadership theories to design a more effective and successful organization.
Northouse, P. G. (2019). Leadership: Theory and practice. Los Angeles: Sage.
Enduring Ideas: The 7-S Framework. (2008, March 01). Retrieved June 20, 2020, from https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/enduring-ideas-the-7-s-framework
Rick, T. (2020, February 27). How and Why Organizational Culture Eats Strategy for Breakfast, Lunch and Dinner – Supply Chain 24/7. Retrieved June 20, 2020, from https://www.supplychain247.com/article/organizational_culture_eats_strategy_for_breakfast_lunch_and_dinner