PROJECT LANEWAYS PTY LTD People in Projects | Change Management | PRINCE2

Practical Applications of the McKinsey 7-S Framework

Some practical tips on how to use the McKinsey 7-S Framework to enhance your change management initiative. The 7-S Framework can be very useful in different ways in different phases of the change initiative.

What is the McKinsey 7-S Framework?

The 7-S Framework considers organisations to be made up of several inter-connecting systems and that all these should be considered and planned for during a change:Organisational Chart

Structure
Organisational Strategy

Routine Processes

Strategy

Systems

Shared Values
Guiding Principles

Staff
People

Style

Skills
Capabilities of key people

Management style and culture

Attention must be paid to all systems or factors but the relative importance of each can vary, depending on the circumstances and the phases of the change.

Using the 7-S Framework

For the purposes of this article, a typical change initiative is separated into four phases. This can apply in both a planned project approach and in a more exploratory approach, where each step builds on the lessons of the last step. It should also be said that, in practice, these phases are not always distinct and will tend to overlap to some extent.

1. The Decision Making Phase

This is when the organisation is deciding Is any change necessary? Is this change the right one? Is this change feasible? Can we actually achieve it and achieve it without irreparably harming the business? What kind of effort is it going to take? Some factors take on more special importance in this phase. Staff (people) Style (management style and culture) Shared values (guiding principles) Strategy (organisational goals)
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Staff
Wherever possible and feasible, opinions should be gathered from all levels of staff. Whether this is done formally through staff surveys and focus groups, or more informally will depend on many factors. It is always worth doing, as it avoids the pitfalls of making too many assumptions. However, sometimes factors such as commercial confidentiality or proposed lay offs make it very difficult to sample opinion. In this case, it might be possible to review previous surveys for clues.

Style
Does the proposed change match with the management style and culture of the organisation? If the answer is yes, then while this aspect should be monitored, it should not present much of a problem. Sometimes a change is necessary for organisational survival even if this is contrary to the management style and culture. If the proposal is counter cultural, then there will be significant resistance. A change in culture will be required. If so, then you will need to deploy a wide range of Change Management techniques.

Shared Values
The same applies to Shared Values or guiding principles. If the proposed change is counter to the Shared Values then you may actually be talking about a change initiative that needs to change the Shared Values or at the very least reinterpret them. If that is so, then it will be a large and potentially difficult change.

Strategy
Finally, if the proposed change does not match the Organisational Strategy, then why is it being proposed at all?

2. The Planning Phase

During the planning phase, all 7 factors should be analysed and the eventual plan should address each one. All projects should, at the very least, have a formal stakeholder analysis and a communications plan. Both must consider internal and external stakeholders. If the decision phase revealed significant Change Management challenges, then the plan should include real and concrete deliverables to address these issues. Some examples would be: Creation of materials to explain the new model, culture or vision. Opportunities for senior management to visibly sponsor the change and demonstrate it through role modelling. Time and opportunity for staff at all levels to learn about and work through the proposed changes. The use of pilot groups. A plan that is more exploratory than linear, each step building on the lessons of the previous step.
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Regular temperature readings on the state of the factors through such mechanisms as surveys, focus groups, meetings, absenteeism, customer satisfaction and process efficiency. A mechanism to spot and report early successes. A mechanism to spot and deal with problem areas.

Several important points are often overlooked in the planning phase: Skills. Soft skills as well as hard skills need to be examined. People were often initially recruited when the process required a different personal style. New processes may require different soft skills and sometimes these can be acquired. Systems. Many projects neglect to set up ongoing support systems that help to embed the new process such as ongoing coaching, local experts and a place for the local expert to escalate questions to, and methods for continuously improving the process. Structure. The informal structure. Formal organisation charts do not always reflect where the power lies and this should be considered in your stakeholder analysis.

3. The Implementation or Execution Phase

This is the easiest to explain and the hardest to do: Follow the plan Monitor progress Deal with the issues Be prepared to change the plan

If the change is complex, it will not be possible to plan it in every detail. This is especially true when the change affects the more emotional factors (such as Shared Values). In these cases it is important to keep a close eye on progress and watch the temperature readings. It is especially important for Change Managers to be honest with themselves during the implementation phase. Is it working? What can we do differently? Be as objective as possible. A matrix such as below can be quite powerful as a review tool.
Progress Staff Skills Systems Style Shared values Strategy Structure Issues Risks Evidence

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4. Review Phase
While change is often a continuous process, at some stage senior management will require a formal review. This will not be a trivial exercise, although regular temperature readings throughout the implementation phase will benefit here. It will be necessary to report on all factors and it is important to be as concrete and numeric as possible. A matrix such as below can guide the questions that should be answered:Before Staff Skills Systems Style Shared values Strategy Structure Now Benefits Areas for improvement

An important point that often gets lost in the review process is to document the lessons that were learned during the change initiative: What went wrong What went right What should be done differently next time

It can be hard to admit that things did go wrong at times, but unless this is faced openly and transparently, the organisation may be destined to repeat the same mistakes.

Conclusion
The McKinsey 7-S framework is both simple and powerful. It acts as an effective checklist through all phases of a change of initiative of any size. It is easy to understand and it can also be used to provide an early warning that the proposed change will be difficult and rich with complex issues.

This paper was written by Dan Skelsey, Director and Lead Trainer of Project Laneways. For more information about Project Laneways, please visit www.project-laneways.com.au Project Laneways is an accredited training organisation for PRINCE2 and Change Management. PRINCE2 is a Trade Mark of the Office of Government Commerce UK

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