Strategic Implementation

CHAPTER 6.
STRATEGIC IMPLEMENTATION REVIEW AND EVALUATION
MCKINSEY 7-S FRAMEWORK
This model was developed in the 1980's by Robert Waterman, Tom Peters and
Julian Philips whilst working for McKinsey and originally presented in their
article “Structure is not Organisation". To quote them:
"Intellectually all managers and consultants know that much more goes on in
the process of organizing than the charts, boxes, dotted lines, position
descriptions, and matrices can possibly depict. But all too often we behave as
though we didn’t know it - if we want change we change the structure.
Diagnosing and solving organizational problems means looking not merely to

structural reorganization for answers but to a framework that includes
structure and several related factors."
The 7S Model which they developed and presented became extensively used
by managers and consultants and is one of the cornerstones of organisational
analysis.
Essentially the model says that any organisation can be best described by the
seven interrelated elements shown above:
McKinsey Company developed the 7-S framework. This frame work helps in
strategic planning and help to determine the future impact of change and take
decisions to reach a designed future.
7-S frame work also provides insight into an organizations working and help
in formulating plans for improvement. The seven levers of the organization
help achieve the desired results. The complex relationship is diagrammatically
presented below:
Structure: The structure of the organization is designed in accordance with

the strategy involved. If the structure of the organization is already in place,
it is advisable that it is flexible enough to accommodate changes for
implementing the strategy. The way the organization's units relate to each
other: centralized, functional divisions (top-down); decentralized (the trend in
larger organizations); matrix, network, holding, etc. The design of the
structure involves allocation of responsibilities, relationship between various
departments of the organizations, and the ways in which the organization’s
tasks are integrated and coordinated. The structure of the organization is
depicted by the organizational chart.
System: It refers to the rules and procedures that support the structure of the
organization. Systems include production planning and control system,
recruitment, selection, training and development strategy changes than the
organization structure.
Style: Top managers in organization use style to implement strategies. The

style of the working of the organization becomes evident through the patterns
of actions taken by the top management over a period of time. These styles of
managers are likely to influence the people in the lower levels of the
organization. The style of the managers must be in such a way that it should
be adaptable to the changing internal and external environment. The
managerial style must be to teach the employees the correct way to think,
take correct decisions etc.
Staff: Staff refers to the way organizations introduce young recruits into the
mainstream of their activities and the manner in which they manage their
careers as the new entrants develop into future manager.
Skills: It refers to the crucial attributes or capabilities of an organization. The

dominant skills are those characteristics which most people use to describe
an organization. E.g. Hindustan Lever is characteristic with distribution,
Reliance is known for their marketing skills.
Strategy: It is the determination of basic long term goals and objectives of an

enterprise and the adoption of courses of action and the allocation of
resources for carrying out of goals like organization. Strategy comprises of
four components Product-market scope, growth, competitive advantage and
return on investment.
Super- Ordinate goals: Super ordinate goals refer to the fundamental ideas
around which a business in built. They are its main values. They are the broad
notions of future direction e.g. of super ordinate goals include strong drive to
“customer service”, “innovation throughout the organization”.
The 7-S frame work highlights important organizational interconnections and

their role in effecting strategic change. It produces a checklist for the
organization to judge whether it is time for implementing a strategy. It helps
in environment scanning and also to find out the organizations strength and
weakness.
However the model is more than simply a list. Key Points are:
1. The top 3, strategy, structure and systems are the hard elements. The
bottom 4, skills, staff, style, and shared values are the soft
elements.Previously, any organizational study focused on the top "hard"
elements and ignored the bottom "soft" elements.
2. The current view is to focus on all 7, accepting that for each business
or enterprise, two or three will be the VITAL ones.
3. The key point is that all the elements are all inter-dependant. Changes
in one will have repercussions on the others. Thus introduction of new
systems will certainly affect skills, and may well effect structure, style
and staff. It could even have an impact on strategy. Similar
repercussions occur with decentralisation.
4. If you just try to change one element on its own, the other element may
well resist the change and try to maintain the status quo.
5. In this sense, any change in organisation is best seen as a shift in the
whole picture.
The model is based on the theory that, for an organization to perform well,
these seven elements need to be aligned and mutually reinforcing. So, the
model can be used to help identify what needs to be realigned to improve
performance, or to maintain alignment (and performance) during other types
of change.
Whatever the type of change – restructuring, new processes, organizational

merger, new systems, change of leadership, and so on – the model can be
used to understand how the organizational elements are interrelated, and so
ensure that the wider impact of changes made in one area is taken into
consideration.
OBJECTIVE OF THE MODEL
 Improve the performance of a company

 Examine the likely effects of future changes within a company
 Align departments and processes during a merger or acquisition
 Determine how best to implement a proposed strategy
LEADERSHIP AND MANAGEMENT STYLE
Leadership: The chairman, President, Managing Director, CEO of

organizations involve getting things accomplished through and with others in
others in order to meet the corporate objectives. The top man in the
organization must successfully handle two responsibilities which is very
important to effective strategic management of the organization.
1. Leadership
2. Manage strategic plans.
Leadership is the directing of activities towards the accomplishment of the
organization’s objective. It sets the time for the entire organization. Good
leaders create a vision, articulate the vision, passionately own the vision and
relentlessly drive it to completion.
Leaders with a clear strategic vision are often perceived as dynamic and
charismatic leaders. They are able to command respect and to influence
strategy formulation and implementation. Leader should have three key
characteristics.
1. Leader articulates a strategic vision. He envisions the organizations not

as it currently is but as it can become…..
2. Leader presents a role for others to identity with and to follow. The
leader sets an example in terms of behavior and dress
3. Leader not only communicates high performance standards but also
shows confidence in the follower’s abilities to meet these standards.
Management style: this is also known as the entrepreneurial style.
Management style in strategic management includes risk taking, proactivity
and innovation.
Risk taking: the manager is willing to pursue opportunities boldly and

aggressively. He prefers for high-risk projects with chances of very high
returns over low risk projects with lower and more predictable rates of return.
Pro- activity: the manager’s style is his willingness to initiate actions to which
competitors then respond. The proactive manager attempts to be first in the
introduction of new products, services rather than merely responding to
competitors.
Innovation: the manager’s style is to place strong emphasis on R&D, new

products, new services, improved product lines, technological improvements
etc
Innovative products are being introduced into the market which is the unique
STRATEGY REVIEW AND EVALUATION:
Effective strategy evaluation allows an organization to capitalize on internal

strengths as they develop to immediately exploit external opportunities as
they emerge, to recognize and defend against environmental threats and to
improve internal weakness before they become bad for the organization. Top
managers deliberately and systematically formulate, implement and evaluate
strategies.
Strategy evaluation consists of three activities:
a. Review underlying bases of strategy

b. Measuring organizational performance
c. Taking corrective actions
Review underlying bases of strategy: To begin with, a review of the existing

bases of an organization’s current strategy out because internal and external
factors do change. Prepare a revised internal and external factor for strategy
implementation.
Measuring organizational performance: Organizational objectives and

goals are the key components of an effective strategic management system.
Strategy evaluation is based on objective factors. e.g.
a. Growth as measured in total sales, unit sales, total assets.
b. Efficiency as measured in gross margin, net profits.
c. Asset utilization as measured by return on equity, earnings per share etc
Take Corrective Actions: If the organizational performance does not match the
standards set corrective actions should be taken which should place an
organization in a better position to capitalize on internal strength, to take
advantage of key extend opportunities.
Critical information Needs (for achieving strategic goals)
The life blood of any organization is information. Thus it is important that the
right information is available at the right time and in the right place. The
integration of internally and externally focused information systems i.e.,
Management Information System developed by an organization serves the
above purpose.
The schematic diagram is given on the next page.

MANAGEMENT DECISION MAKING
Strategic Planning Model
Critical Success Factors
Critical Information Needs Internal

External
Environmental Sub-Domains
Political
Functional sub- domains
Economic MANAGEMENT
Marketing
Social INFORMATION
Finance
Technology SYSTEMS
Production
Environmental
Industry Analysis
Personnel
Research & development

Strategic Implementation

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What are the components of the 7S framework?

What are the components of the 7S framework?

What are the three activities involved in strategy evaluation?

What are the three activities involved in strategy evaluation?

CHAPTER 6.

STRATEGIC IMPLEMENTATION REVIEW AND EVALUATION

MCKINSEY 7-S FRAMEWORK

Diagnosing and solving organizational problems means looking not merely to

Structure: The structure of the organization is designed in accordance with

Style: Top managers in organization use style to implement strategies. The

Skills: It refers to the crucial attributes or capabilities of an organization. The

Strategy: It is the determination of basic long term goals and objectives of an

The 7-S frame work highlights important organizational interconnections and

Whatever the type of change – restructuring, new processes, organizational

OBJECTIVE OF THE MODEL

 Improve the performance of a company

Leadership: The chairman, President, Managing Director, CEO of

1. Leader articulates a strategic vision. He envisions the organizations not

Risk taking: the manager is willing to pursue opportunities boldly and

Innovation: the manager’s style is to place strong emphasis on R&D, new

STRATEGY REVIEW AND EVALUATION:

Effective strategy evaluation allows an organization to capitalize on internal

Strategy evaluation consists of three activities:

a. Review underlying bases of strategy

Review underlying bases of strategy: To begin with, a review of the existing

Measuring organizational performance: Organizational objectives and

Critical information Needs (for achieving strategic goals)

The schematic diagram is given on the next page.

Strategic Planning Model

Critical Success Factors

Critical Information Needs Internal

Research & development

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