Monday 16 February 2015

McKinsey 7S, 8S and other Organisation Models

One of the tweets at the Enterprise 2.0 Summit in Paris a few weeks ago was about the need for digital / social business to be seen holistically, and it suggested that the McKinsey 7S model does the trick.  Not for me it doesn't.

I was never totally happy with the 7S model even when I first started working with it whilst still fairly new early on in my career (I remember McKinsey were promoting the recently published In Search of Excellence at the milk round careers fairs I attended.)  But it's now feeling very old and tired.

Even McKinsey, if they were redoing the model for today (and were still interested in the activities in the 7S rather than the outcomes making up Organisation Health) would I am sure come up with an additional S today - which would of course be Social Relationships...

McKinsey after all probably do more research on social businesses than any other strategy based consultancy - so I wouldn't want to suggest the importance of social is something they're not aware of!

And it was interesting to see this model which includes social relationships in HR Magazine this week.

But if we're going to update the model, let's make it even more fit for purpose at the same time.  For example, there's a lot missing from McKinsey's model, including:
  • The vertical axis of the organisation i.e. organisational layers, which are also an even more important consideration today given pressure on hierarchies.
  • Grades and careers which need to fit or integrate somehow with layers if organisational problems aren't going to be created
  • Workplaces and workspaces (facilities and IT) which are increasingly as important for people as the organisational structures they work within.

However I don't include values or deep aspects of culture as I think these provide one of the inputs to the design of a particular organisation and need to be reflected in the governing organisation principles which shape the design, not part of the design itself.

(Culture as the way things are done here is really already included in the model as an aspect of the social relationships element.)

So I've had a number of plays with this organisational model over the years - particularly when I'm consulting on OD, or providing some development (for example my OD training for Symposium in the UK).  These are what I've been using over the last couple of years (I like the elements of the model but have still never been happy at the connections between them.

Please don't think I spend huge amounts of time over these - they are only models and the skill in OD lies mostly elsewhere.  But they are still important and do guide other actions later on.  I like how Andrew Campbell describes it (discussing another model from BCG):
"The way you think about an operating model influences the factors you focus on and the way you analyse...  My experience tells me that you need to develop these frameworks to suit the situation rather than use a standard framework for every situation.   Since the framework biases your thinking, you are better with one that emerges out of the situation than one that you impose on it.  This means that you should have your own starting framework, like my PILOS model,  but be enough aware of the many other frameworks that exist to be able to tailor one for the situation you are in.  This is definitely a black belt skill rather than a beginner’s skill; but I do meet very experienced people who insist on arguing that there model is best."

(BTW I think BCG's coaching and enablement are covered by social relationships too.)

I absolutely do change the model I use according to the situation, but I do also find it useful to have an all-things-being-equal, starting model or framework (which may then also change based upon the new experience / situation.)

So this is the starting model that I'm using now:

In this:
  • Strategy is included as the input to the model vs one of the enablers
  • Whether the strategy focuses on customers (brand), operations (business excellence, core competencies etc) or learning and growth (people, organisational capabilities) will influence whether the main reporting lines (eg priority axis of a matrix) are those of a network, community, function or process based organisation
  • The model is structured on a typical design approach with main building blocks towards the top, supporting elements in the middle and detailed reporting lines at the bottom.

I particularly like it because I think it deals with one of the major areas in confusion around social business these days - that developing social relationships doesn't mean no hierarchy. All (OK, very, very nearly all) organisations have some reporting hierarchy and in my view always will.  The issue is picking a reporting structure which suits the main focus of the design, which if this is social relationships, is going to be a network rather than a more traditional functional design.  But there will still be a more limited hierarchy in this as well.  (The same applies in community based reporting structures such as holocracy too.)

Any thoughts?


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