mckinsey research strategic planning

• Search Search Please fill out this field.

What Is the McKinsey 7S Model?

What are the key elements in the mckinsey 7s model.

• How Are the 7 S's Used in Strategic Planning?

What is McKinsey, and What Do They Do?

What are the 7s factors.

• Why Follow McKinsey's 7S Model?

The Bottom Line

• Business Essentials

How to Use the McKinsey 7-S Model for Strategic Planning

Investopedia / NoNo Flores

The McKinsey 7S Model is a framework for organizational effectiveness that postulates that there are seven internal factors of an organization that need to be aligned and reinforced in order for it to be successful.

Key Takeaways

• The McKinsey 7S Model is an organizational tool that assesses the well-being and future success of a company.
• It looks to seven internal factors of an organization as a means of determining whether a company has the structural support to be successful.
• The model comprises a mix of hard elements, which are clear-cut and influenced by management, and soft elements, which are influenced by corporate culture.

The 7S Model specifies seven factors that are classified as "hard" and "soft" elements. Hard elements are easily identified and influenced by management, while soft elements are more intangible, and influenced by  corporate culture . The hard elements are as follows:

The soft elements are as follows:

• Shared values

The framework is used as a strategic planning tool by organizations to show how seemingly disparate aspects of a company are, in fact, interrelated and reliant upon one another to achieve overall success.

Consultants Thomas Peters and Robert Waterman Jr., authors of the management bestseller "In Search Of Excellence," conceived of the McKinsey 7S Model at consulting firm McKinsey & Co. in the late 1970s.

How Are the 7 S's Used in Strategic Planning?

Below, we take a closer look at each element in the 7S Model:

• The strategy is the plan deployed by an organization in order to remain competitive in its industry and market. An ideal approach is to establish a long-term strategy that aligns with the other elements of the model and clearly communicates what the organization’s objective and goals are.
• The structure of the organization is made up of its corporate hierarchy , the chain of command, and divisional makeup that outlines how the operations function and interconnect. In effect, it details the management configuration and responsibilities of workers.
• Systems of the company refer to the daily procedures, workflow, and decisions that make up the standard operations within the organization.
• Shared values are the commonly accepted standards and norms within the company that both influence and temper the behavior of the entire staff and management. This may be detailed in company guidelines presented to the staff. In practice, shared values relate to the actual accepted behavior within the workplace.
• Skills comprise the talents and capabilities of the organization’s staff and management, which can determine the types of achievements and work the company can accomplish. There may come a time when a company assesses its available skills and decides it must make changes in order to achieve the goals set forth in its strategy.
• Style speaks to the example and approach that management takes in leading the company, as well as how this influences performance, productivity, and corporate culture.
• Staff refers to the personnel of the company, how large the workforce is, where their motivations reside, as well as how they are trained and prepared to accomplish the tasks set before them.

The McKinsey 7-S Model is applicable in a wide variety of situations where it's useful to understand how the various parts of an organization work together. It can be used as a tool to make decisions on future corporate strategy.

The framework can also be used to examine the likely effects of future changes in the organization or to align departments and processes during a merger or acquisition. Elements of the McKinsey Model 7s can also be used with individual teams or projects.

McKinsey & Co. is a global consulting and accounting firm founded by University of Chicago management professor James O. McKinsey in 1926. The firm specializes in management consulting for a wide range of corporations, governments, and other organizations.

The seven factors in McKinsey's model are strategy, structure, systems, shared values, skills, style, and staff.

Why Follow McKinsey's 7S Model?

Among the primary reasons corporate management uses McKinsey's 7S Model is to identify where a company excels and where it needs more work in creating an optimal and efficient workforce. Additionally, it used to evaluate the performance of a company following a merger or other restructuring to identify areas in the business that need greater improvement and alignment. In many ways, it allows organizations to target problems and set a course of action to implement change.

The McKinsey 7S Model is a framework for optimizing organizational design through analyzing seven core elements: strategy, structure, systems, shared values, skills, style, and staff. As a widely-used strategic planning tool, it allows organizations to function more effectively through aligning each of these elements in order to achieve its goals and objectives.

McKinsey. " Enduring Ideas: The 7-S Framework ."

• Terms of Service
• Editorial Policy
• Privacy Policy

• Certifications
• Associate Business Strategy Professional
• Senior Business Strategy Professional
• Examination
• Partnership
• For Academic Affiliation
• For Training Companies
• For Corporates
• Help Center
• Associate Business Strategy Professional (ABSP™)
• Senior Business Strategy Professional (SBSP™)
• Certification Process
• TSI Certification Examination
• Get your Institution TSI Affiliated
• Become a Corporate Education Partner
• Become a Strategy Educator
• Frequently Asked Questions

The McKinsey 7-S Model for Organizational Alignment and Success

Aligning an organization is crucial yet challenging, especially amid ongoing changes. One strategic tool businesses use to manage complexity and drive consistent alignment is the McKinsey 7-S Model.

Learn how leaders leverage the Mckinsey 7-S model - a strategic framework analyzing structure, strategy, systems, skills, staff, style and shared values - to diagnose gaps, guide transformations, and improve organizational effectiveness.

In this article, we explore the 7-S framework, its implementation, and how leaders have leveraged this model to direct effective transformations.

What Is the McKinsey 7-S Model?

The McKinsey 7-S Model is a change management strategy framework that analyzes a company's organizational design to help leaders effectively manage organizational change. It does this by looking at the interactions and alignment between seven key interconnected elements that influence an organization's ability to change:

• Structure - Structure refers to the accountability-enabling chain of command. It creates employee ownership within an organization.
• Strategy - The plans and approaches the business takes to achieve goals and gain a competitive edge. Effective strategies align with other model elements, reinforce vision/mission/values, and response to market changes.
• Systems - Systems are operational processes and workflows impacting productivity and decisions.
• Shared Values - The guiding principles and culture that shapes decisions and unites the organization. Enable employee behavioral change essential for a strong culture.
• Skills - The actual skills and competencies people in the organization need to execute the strategy. Employee abilities to complete tasks. Skill gaps overburden experienced employees, so identifying gaps to bridge them through training is essential.
• Style - The leadership approach and management style that drives the culture. Management style influences employee productivity and satisfaction levels.
• Staff - The human resources required, how people are hired, trained, motivated.

The model proposes that these seven elements influence each other, like a domino effect. The central placement of shared values indicates its crucial role - a strong, healthy culture impacts all other elements and drives change. Leaders must get the shared values and culture right to enable organizational change.

The 7 Elements of the McKinsey 7-S Framework

McKinsey's model comprises seven elements in two categories:

Hard Elements: More tangible elements that leadership and management can directly influence.

Soft Elements: Intangible, culture-driven elements.

• Shared values

The hard elements are more easily identified and adjustable. However, the model proposes soft elements are equally crucial for organizations to examine and realign to drive successful change.

How to Implement the McKinsey 7-S Model

Leaders can effectively implement the model using a top-down approach:

1. Identify Gaps and Unaligned Processes

The first step is to conduct an analysis of the current state of the organization across the 7-S dimensions. The goal is to spot inconsistencies, misalignments, and areas needing change.

This involves thoroughly evaluating the organization's:

• Structure - Reporting lines, decision-making processes, team dynamics
• Strategy - Business plans , goal setting, competitive positioning
• Systems - Technologies, workflows, infrastructure
• Shared Values - Cultural values, norms, employee experience
• Skills - Capabilities, training levels, competency gaps
• Style - Leadership approach, management model, HR policies
• Staff - Human capital, job roles, incentives and rewards

Compare findings to identify gaps between current and desired states per element and in their interactions. List out unaligned processes and practices needing realignment.

Conduct employee surveys, workflow analysis, and leadership discussions to gather broad insights into potential issues. Identify pain points experienced by various stakeholders.

2. Determine the Ideal Organizational Design

Next, research extensively to define what the optimal organizational design should be to enable business strategy execution.

Take into account your long-term business vision and priorities when deciding what changes different 7-S elements require. Consult strategic experts to benchmark against organizational best practices. Importantly, the "ideal state" vision must align with leadership aspirations as well as wider team sentiments. Achieve this balance through change management surveys and focus group discussions.

The outcome of this step should be clarity on the required realignments per element - like flatter hierarchy, upgraded tech systems, better incentives, etc.

3. Create an Effective Action Plan

With the gaps identified and ideal state chartered, the next step is creating a detailed change implementation roadmap.

Define the precise hierarchy changes, communication protocols, system upgrades, training programs, and policy changes required to shift the organizational design. Include specific departments impacted and resources needed.

Assign change sponsors and owners for accountability. Set targets and timelines for various initiatives outlined in the plan. Creating this plan collaboratively, with leadership and employee inputs incorporated, will drive engagement and momentum.

4. Implement the Change

The most crucial step is the actual change implementation based on the action plan. Careful execution avoids resistance, confusion, and failures.

Appoint internal change agents from impacted teams or hire external consultants skilled in organizational change management best practices. Conduct regular training workshops. Offer communication forums for clarity. Encourage employee participation at every step, from feedback to pilots. Leadership alignment on the "why" and support during transitions is vital. Celebrate small wins through the process.

5. Maintain Momentum with Review Processes

As organizational elements and market dynamics constantly shift, it's key to sustain momentum post-implementation with rigorous review mechanisms.

Set up processes to continually track interdependencies between the 7-S elements - like skills and staff or systems and structure. Check that realignments made enable strategy delivery consistently. Adapt action plans if critical misalignments re-emerge. Use insights to refine change initiatives or maintain competitive edge through new transformations.

The McKinsey 7-S model framework offers a simple yet effective method for leaders to analyze and enhance organizational design. Following this step-by-step implementation methodology can help companies execute complex change initiatives smoothly.

The focus should be on identifying gaps, correcting course, sustaining alignment, and repeating the process as new market realities emerge. With constant assessment and adaptation, companies can build resilient systems powered for high performance.

McKinsey 7-S Model Examples

Here is a detailed explanation of two McKinsey 7-S model examples:

Nokia: From Industry Pioneer to Microsoft Acquisition

Nokia's journey from being an industry pioneer to losing significant market share and eventually getting acquired by Microsoft aligns well with the McKinsey 7-S model analysis of change failure.

Strategy Dilemma: Nokia faced a dilemma regarding whether to optimize costs and volumes, enhance device performance, or maximize security. They opted for a cost-leadership approach but failed miserably on innovation and device performance fronts.

Structure: Nokia had a hierarchical, top-down organizational structure where employees were working in silos with limited communication across teams. To compete with the likes of Apple, Nokia should have transitioned to a more agile, decentralized structure with increased collaboration.

Systems: Nokia considered organizational agility and being nimble as its key competitive advantages in the past. With a skilled engineering workforce, Nokia initially was in a strong position to rapidly innovate its products and increase operational efficiency.

Skills: Nokia had built a large pool of highly skilled telecom engineers over the years and leveraged that to design highly efficient mobile phones earlier on. Lack of relevant skills was not an initial gap that led to their downfall.

Staff: Surprisingly, Nokia removed the Chief Technology Officer (CTO) position from top management during 2007-2010 (Source: BrandMinds.com) . This led to extremely high attrition rates of engineers and technology executives. New hires also weren't adequately skilled to start with, eventually causing the downfall of Nokia as a cutting-edge mobile brand.

Style: Due to the low technical competence of leaders appointed, employee morale was generally low during Nokia's decline. Instead of bringing in people with relevant backgrounds to further innovation and business growth , Nokia clearly needed transformational, visionary change leadership during that period to rejuvenate technology advancement and cutting-edge product designs.

Shared Values: The core values of the company previously enabling business performance were Respect, Achievement, Renewal and Challenge. However, these got diluted among competing priorities.

McDonald's: Leveraging 7-S Model to Drive Change

In contrast, here is how the global fast-food giant McDonald's successfully leverages the McKinsey 7-S model components to continually drive organizational change and evolution:

Strategy: McDonald's gains significant market share through adopting a cost-leadership approach. The company also sets clear, time-bound SMART goals to achieve both long-term strategic vision as well as short-term objectives.

Structure: Unlike other complex multinational corporations, McDonald's has a relatively flat organizational structure where a store manager efficiently manages restaurant employees. Store crews function as close-knit teams and can easily access senior management when required.

Systems: McDonald's is known for constantly innovating various systems to reduce customer wait times and make restaurant operations along with the whole supply chain more efficient. Some examples are mobile ordering apps, self-ordering kiosks, delivery partnerships, lean kitchen processes etc.

Shared Values: Values like integrity, serving diverse customer demographics, hiring employees from different backgrounds, encouraging teamwork and giving back to communities shape McDonald's operations. These are reflected in the core values - Serve, Inclusion, Integrity, Community and Family.

Style: McDonald's leverages a highly participative leadership style where senior leaders actively engage with employees at different levels to seek frequent feedback to improve policies, operations and resolve conflicts.

Staff: With over 150,000 employees globally, McDonald's is one of the largest employers worldwide (Source: Wikipedia.org) . The company firmly believes in diversity and strives to enable employee satisfaction through various initiatives.

Skills Training: McDonald's regularly trains employees through real-world simulations to provide an excellent customer experience and handle objections effectively. This focus results in highly skilled staff.

In summary, the 7S model offers business leaders a framework to analyze how integral organizational elements impact each other. As the Nokia and McDonald's examples illustrate, leveraging 7-S insights properly can drive change or hindrance.

In conclusion, the McKinsey 7-S model offers a framework for organizations to analyze alignment and enable success. Leaders can assess interdependencies between these components to pinpoint organizational gaps or misalignments. Addressing these effectively guides strategic improvements and change initiatives.

With robust research and committed implementation, the McKinsey 7-S model gives organizations a holistic blueprint towards increased alignment and competitiveness. Continuous assessment between elements helps firms execute their vision.

The framework offers a simple, structured methodology to diagnose issues and track progress. Ultimately, organizations aiming for agility, innovation or growth can leverage the 7-S model to reach higher performance excellence.

Recent Posts

How Data Analytics Can Revolutionize Your Business - A Strategist's Guide

Download this Strategist's Guide to empower yourself with resourceful insights:

• Roadblocks to Data Usage
• Advantages that Data Analytics offer for businesses
• Elements of a Data Analytics Strategy
• Top reasons why businesses must adopt a Data Analytics Strategy
• Case studies, Scenarios, and more

CredBadge™ is a proprietary, secure, digital badging platform that provides for seamless authentication and verification of credentials across digital media worldwide.

CredBadge™ powered credentials ensure that professionals can showcase and verify their qualifications and credentials across all digital platforms, and at any time, across the planet.

Verify A Credential

Please enter the License Number/Unique Credential Code of the certificant. Results will be displayed if the person holds an active credential from TSI.

Stay Informed!

Keep yourself informed on the latest updates and information about business strategy by subscribing to our newsletter.

Start Your Journey with The Strategy Institute by Creating Your myTSI Account Today.

• Manage your professional profile conveniently.
• Manage your credentials anytime.
• Share your experiences and ideas with The Strategy Institute.

Account Login

• Remember Password
• Forgot Password?

Forgot Password

McKinsey 7S Model: Importance & How To Use It (2024)

Managing strategic alignment across various business operations becomes increasingly challenging as organizations pivot through ongoing changes.

One strategic tool used by businesses to manage this complexity and drive consistent alignment through change periods is the McKinsey 7S Model.

In this article, we will guide you through the basic principles of the McKinsey 7S Model and show you how to use it in practice based on a real-life example. And yes, you’ll also get a template that will help complete your own 7S Analysis. ;)

• The 7S Model is a strategic tool that helps you analyze organizational gaps, inconsistencies, and alignment issues.
• The framework divides organizations into seven categories and shows how key elements impact one another.
• Both “hard” and “soft” elements in the 7S Model are equally important when implementing change.
• Pros: The 7S Model helps you understand the broader impact of change initiatives on the entire organization.
• Cons: It doesn’t analyze external elements and their impact on organizations.

⚠️ Avoid analysis paralysis! Aligning your organization is key, but a framework on paper isn't enough. Cascade Strategy Execution Platform bridges the gap between design and action. Talk to our strategy experts to translate the McKinsey 7S model into a clear, actionable plan for organizational effectiveness.

What Is the McKinsey 7S Model?

The McKinsey 7S Model is a change management tool for analyzing organizational design, alignment, and performance. It offers a simplified method of identifying organizational gaps, inconsistencies, and conflicts. Additionally, it is useful for mapping out various types of change initiatives in complex environments.

As the name implies, there are seven components to the 7S Model—all of which start with an “S.” 

These seven components are grouped into “hard” and “soft” elements. Both are equally important to driving successful change initiatives .

Hard elements

Hard elements are tangible, easy to identify, and can be directly impacted by management. 

Soft elements

Soft elements are intangible and primarily driven by the organization’s corporate culture .

• Shared Values

7 Elements Of The McKinsey 7S Model

Let’s look at the different elements of the McKinsey 7S Model in more detail.

1. Structure

This is how the organization is set up for decision-making, ownership, and leadership. It includes hierarchy, the chain of command, and accountability between role players.

2. Strategy

The business’s approach to strategic planning and executing actions that ensure success, sustainability, and competitive advantage.

Systems refers to the processes, infrastructure, and workflows established and utilized within the organization.

Skills are the competencies and capabilities of people within an organization that help it reach business goals and objectives.

Style is the way and manner in which people in the organization operate and interact. This includes interpersonal business relationships, management styles, and codes of conduct.

Staff encompasses human resources and talent management related to company decisions, like hiring, training, retention, and incentives.

7. Shared Values

These are the common objectives and values that help form an organization’s culture and align the other elements within the organization. In and outside of your organization, they influence employee, customer, and work experiences.

How to Use the McKinsey 7S Model? (In 7 Steps)

1. analyze each component of the 7s model.

Here’s how you should take it step-by-step: 

• Start in the middle and analyze Shared Values . This step should help you to identify if you have a clear understanding of where your company wants to be in the future. 
• Move into the Hard elements ( Strategy, Structure, and System ).
• Finish with Soft Elements ( Skills, Staff, and Style ).

>>> Download your 7S Model template here .

You can use the following questions during your review process (also included in the template): 

• How should we proceed to resolve the specific business problem?
• What is our strategy and its priorities?
• How will we achieve our strategic objectives?
• How do we compete in the market? What are our competitive capabilities? 
• How does the organization respond to changes in customer demand or the business environment? 

Structure: 

• How is our organization organized? 
• How are reporting and working relationships structured (hierarchical, flat, silos, etc.)? Who reports to whom? 
• How are our employees aligned with the strategy? 
• How do our teams align and collaborate on shared goals?
• What is our process for making decisions? Is it through centralization, empowerment, decentralization, etc.?
• How does the organization share information (formally and informally)?
• Can we execute the strategy with the existing business system or do we have to develop a new one?
• How do we track progress and performance? 
• What internal processes and guidelines do we have in place to stay on track? 

Shared Values: 

• What principles help us to achieve our goals? 
• What makes us do what we do in the way we do it?
• What is our vision for the future? What is our mission to get there?
• What are our core values? How are we incorporating them into daily activities? 
• What are our strongest skills within the organization? What are our weaknesses? 
• How are we going to fill the skill gap? Which skills are required?  
• Is the current employee's skill set sufficient for the job?
• How do we monitor, assess, and improve skills?
• What leadership style and cultural qualities will help us to achieve a strategic objective?
• What is our current management approach?
• How are our employees respond to it? 
• Is there anything we can do to support the growth of our team members?
• What are the current staffing needs?
• Are there any gaps in required capabilities or resources?
• What is our plan for addressing those needs?

Remember, you may already be able to identify some of the issues in your organization. However, some problems may be less obvious. 

An exercise like this can help you gain a better understanding of all the issues that are impacting alignment and organizational effectiveness.

2. Identify areas that are misaligned with your vision and strategy

Review your findings and use them to find gaps and inconsistencies in the organization. Create a list of these existing issues. 

“If you want to go to the moon, you need to understand the distance you need to bridge to go from here to there.” – Thibault Mesqui, Managing Director, Heineken

Additionally, speak to other key stakeholders and get their opinions on different business areas and processes in your organization. 

“When you involve people, when you ask them their opinions, they feel a lot more inclined to actually execute the thing later on.” - Ilana Rosen , Director of Strategy and Head of Enterprise Innovation at Old Navy

3. Define the desired state

You’ll then need to identify and articulate the organization's ideal alignment. Go through each “S” and use this question:  “What do we need to change in each element so we can execute our strategy?”.  

This will likely require additional research and consultations with external experts to understand what an optimal organizational design can look like and the possible obstacles that might stand in its way.  

Remember, your “ideal” state should be informed by your company’s long-term strategic goals , conversations with role players, and other internal analyses . 

Once you’re done, review everything and ensure it aligns with your company’s vision and strategy.

4. Prepare your change management plan

Analysis of the 7S Model holds no value if you don’t map out a change management action plan. Your organization needs a clear roadmap to get where it needs to be. Without it, you will either miss growth opportunities or continue to be stagnant. 

As part of this step, clearly define your strategic objectives , key projects or initiatives, and KPIs. Co-create an action plan with the owners who will be responsible for executing it. This collaborative approach is essential if you want to get buy-in and maintain momentum. 

Strategic planning can be challenging depending on your organization's size and existing processes. 

An all-in-one strategy execution platform, like Cascade , can help simplify the strategic planning process with tools to lead, monitor, and manage key change initiatives and projects.

5. Execute your plan

Now it’s time to turn your plans into reality. Execution is the most crucial step in the change process. 

Getting it right will result in impactful changes and help your organization reach important milestones. Getting it wrong will mean delays, lackluster outcomes, and failure. 

But, strategy execution in a complex business environment can be tricky. Especially if you don’t have the right tools to align efforts, ensure accountability, and manage change initiatives. 

Get ahead of the problem. Check out Cascade’s robust transformation management features and see how they can help you drive strategy execution to get results faster.

6. Review your progress against set targets

Monitoring progress is vital if you want your change initiative to have maximum impact. 

Continually review the performance of your teams and projects to ensure your organization is constantly aligned and on track.

Cascade is one of the few platforms that make oversight and monitoring easy. Its focus on strategic alignment, powerful real-time reporting features , and drill-down capabilities give organizations a holistic overview of progress.

7. Adapt your plans and strategy if needed

Any good strategy will change, iterate, and adapt. Don’t be afraid to change your plans and approach as you progress. 

Using insights, knowledge, and new information to improve your approach is important. Plans must be adjusted or refocused as your organization progresses toward its goals. 

“The True North should not change that much, that frequently, but the components of the pillars that make up for the solution might evolve.” - Carlos Trad , Director of Global Business Strategy, Google.

McKinsey 7S Model Example: Chick-fil-A

Chick-fil-A is a popular fast-food restaurant with over 2000 locations in the US, Canada, and the UK. Here’s an example of how a McKinsey 7S Model might look for Chick-fil-A:

• A private family-owned fast-food franchise. 
• Wholly-owned subsidiaries that supply franchisee restaurants.
• Individual Chick-fil-A restaurants are owned and operated by franchisees.
• Franchise owners (Operators) manage day-to-day operations in their stores.

When it comes to growth, Chick-fil-A pursues a market development strategy . They are expanding into new markets with existing products through franchising. They also pursue international expansions by opening new locations outside the US, including Canada and UK. And they are planning to enter new markets, such as Asia. 

• Franchise and licensing business with corporate offices to manage broad strategic initiatives.
• Corporate control of food production and distribution channels.
• A rigorous vetting process for all prospective franchise owners.

Shared values

Christian and family values play a large part in Chick-fil-A’s corporate identity. For example, all Chick-fil-A restaurants are closed on Sundays. 

Chick-fil-A’s core values also play a big role in shaping their culture, work, and customer experience:

• “We are better together” 
• “We're here to serve.”
• “We are purpose-driven.”
• “We pursue what's next.”

These values drive their presence and approach in the fast-food industry. And it proves to be worth the investment. Chick-fil-a is one of the most beloved fast-food chains in America, and it enjoys a reputation for providing the best customer service. 

The company invests heavily in upskilling franchise owners through training, support, and investments. 

They also provide staff members with opportunities to grow and move into new roles. For example, in 2019, Chick-fil-A gave employees $15.3 million in educational scholarships.

In the fast-food industry, Chick-fil-A is known for its unique management style and the trust it places in franchise owners. 

• Known for its servant-leadership style of management.
• The corporate office is known as the “Support Center.”
• Franchisees are known as “Operators,” and employees are known as “Team members.”

Chick-fil-A represents over 170,000 Team Members, Operators, and Staff. This is how the

• Corporate: Strategy, licensing, business development, marketing, compliance, and human resources.
• Franchise owners: Business management, operations, and people management.  
• Restaurant staff: Food preparation, front-of-desk service, customer relations, cleaning, and team management.

Now let’s take a look at the 7S Model in action…

The example above suggests Chick-fil-A's operations are aligned and efficient. But what happens if Chick-fil-A decides to enter a new market with a new product? For the sake of example, let's ignore the fact that a diversification strategy like this would be a bold and risky move based on the Ansoff matrix.  

Using the 7S Model, they might realize that they lack the right management staff to help them through this transition. In terms of Staff , they will need to hire people with the right skills and experience to fill these gaps. Looking at Skills , they might even identify that franchise owners and restaurant staff will need additional training because the new product requires new processes and workflows. 

Strategy is another area they should consider.

Their strategy needs to change and it might even require a new approach to strategic planning. They might also realize that their current approach to strategy execution isn’t fast enough and it will need to change if they want to outperform competitors and stay relevant. 

A McKinsey 7S Framework forces leaders to do their homework and identify gaps that could result in a failed strategy execution. As a leader, you don't want to be in that 90% of strategies that fail.

Note: The above is just an example illustrating different scenarios. You should do your own research and apply the model to your organization.

What Are The Benefits Of Mckinsey 7S Model?

The key benefits of the 7S model framework are:

• It shows the wider impacts of changes on organizations.
• Simplifies the process of planning and executing change initiatives.
• Helps align different segments of business units during periods of change. 
• Useful for different types of change initiatives. 

As with every strategy framework , it also has some disadvantages:

What Are The Disadvantages Of Mckinsey 7S Model?

The disadvantages of the 7S Model are: 

• It requires a lot of research and benchmarking to be used effectively.
• Ignores the impact of the external environment on businesses.

When Should You Choose the McKinsey 7S Model? 

The McKinsey 7S Model is a simplified method of understanding organizational structures and how they impact one another. It is beneficial for identifying key organizational elements impacting performance, such as gaps, inconsistencies, and misalignment.

The 7S Model is a great strategic tool for analyzing organizational design and change management in complex environments. It can be used for various types of organizational change initiatives, such as:

• Diversity, Equity, and Inclusion (DEI) initiatives
• Digital transformation
• Restructuring due to M&A
• Market Development 

Organizations embarking on any transition, reinvention, or reorganization can use this model to bolster strategic planning and execution .

McKinsey 7S Model + strategy execution =  🔥 

7S Model analysis it’s not enough. Yes, you get insights into business areas that need to improve or change within the organization. But that’s just a starting point. 

You need to create your action plan and execute it to close the gap between misaligned elements and your strategy. This is the only way you can create a well-oiled machine that drives business results. And you need the right tools that will help you measure and monitor performance. 

Recommended reading: 23 Best Strategy Tools For Your Organization in 2022

FAQs about the McKinsey 7S Model

Is the mckinsey 7s model still relevant.

Yes, the McKinsey 7S Model remains relevant for businesses and NGOs. It is an important strategic framework for analyzing an organization's alignment and potential future obstacles.

What is the difference between a hard strategy and a soft strategy?

Hard strategies involve planning, executing, and monitoring systems, processes, and structures. The benefits of these initiatives are usually clear and measurable. Soft strategies focus on changes in management style, work culture, and people.

Who introduced the 7S Framework?

The Mckinsey 7S Framework was introduced in the late 1970s by Tom Peters and Robert Waterman, who worked as consultants at McKinsey & Company.

What is the difference between the McKinsey 7S Model and a SWOT analysis?

The difference between McKinsey 7S Model and SWOT Analysis involves each model’s focus and analytical approach. The 7S Model is internally focused and looks at seven elements that affect business performance. SWOT is internally and externally focused and analyses the potential impact of four factors on organizations.

Popular articles

6 Steps To Successful Strategy Execution & Best Practices

How To Create A Culture Of Strategy Execution

McKinsey GE Matrix: Importance & How To Use It (2024)

How To Be More Strategic: 7 Tips & Best Practices For Leaders

Your toolkit for strategy success.

• Announcements
• Brainstorming
• Development
• HR Planning
• Infographics
• IT & Operations
• Marketing & Sales
• Meeting & Visual Collaboration
• Product Management
• Production & Manufacturing
• Project Management
• Remote Working
• Research & Analysis
• Software Teams
• Strategy & Planning
• Template Roundup
• Uncategorized

The Easy Guide to the McKinsey 7S Model

Updated on: 10 January 2023

Although invented in the late 1970s, the McKinsey 7S model still helps businesses of all sizes succeed. A conceptual framework to guide the execution of strategy. 

In this guide, we’ll walk you through the 7S of the McKinsey Framework and how to apply it to evaluate and improve performance. 

McKinsey 7-S Model Definition 

The McKinsey 7S model is one of the most popular strategic planning tools .  Businesses commonly use it to analyze internal elements that affect organizational success. 

The model recognizes 7 of these elements and considers them to be interlinked, therefore it’s difficult to make significant progress in one area without making progress in other areas as well. Accordingly, to be successful, the organization should ensure that all these elements are aligned and reinforced.

The model divides these 7 elements into two categories;

Hard elements – Strategy, Structure, Systems (these are easier to be identified and defined and can be directly influenced by the management)  

Soft elements – Shared Values, Skills, Style, Staff (these are harder to be defined because they are less tangible, but are just as important as the hard elements) 

You can use the framework 

• To successfully execute new strategies
• To analyze how different key parts of your organization work together
• To facilitate changes in the organization 
• To help align processes during a merger or acquisition
• To support management thinking during strategy implementation and change management

The 7 Elements of the McKinsey 7-S Framework 

• Shared values

Let’s dig into these elements in more detail. 

Strategy 

A strategy is a plan the company develops to maintain its competitive advantage in the market. It consists of a set of decisions and action steps that need to be taken in response to the changes in the company’s external environment which includes its customers and competitors. 

An effective strategy would find external opportunities and develop the necessary resources and capabilities to convert the environmental changes into sources of new competitive advantage. 

The structure is the organizational chart of the company. It represents how the different units and divisions of the company are organized, who reports to whom and the division and integration of tasks. The structure of a company could be hierarchical or flat, centralized or decentralized, autonomous or outsourced, or specialized or integrated. Compared to most other elements, this one is more visible and easier to change. 

Systems 

These are the primary and secondary activities that are part of the company’s daily functioning.  Systems include core processes such as product development and support activities such as human resources or accounting. 

Skills are the skill set and capabilities of the organization’s human resources . Core competencies or skills of employees are intangible but they a major role in attaining sustainable competitive advantage. 

The most valuable strategic asset of an organization is its staff or human resources. This element focuses on the number of employees, recruitment, development of employees, remuneration and other motivational considerations. 

This refers to the management style of the company leadership. It includes the actions they take, the way they behave, and how they interact.  

Shared Values

Shared values are also referred to as superordinate goals and are the element that is in the core of the model. It is the collective value system that is central to the organizational culture and represents the company’s standards and norms, attitudes, and beliefs. It’s regarded as the organization’s most fundamental building block that provides a foundation for the other six elements. 

How to Use the McKinsey 7-S Model

The model can be used to do a gap analysis or to determine the gap between what the company is currently doing and what it needs to do to successfully execute the strategy. 

Step 1: Analyze the current situation of your organization

This is where you need to understand the current situation of the organization with regard to the 7 elements. Analyzing them closely will give you a chance to see if they are aligned effectively.

The following checklist questions will help you explore your situation. 

Strategy  

• What’s the objective of your company strategy? 
• How do you use your resources and capabilities to achieve that?
• What makes you stand out from your competitors? 
• How do you compete in the market? 
• How do you plan to adapt in the face of changing market conditions?
• What’s your organizational structure ?
• Who makes the decisions? Who reports to whom? 
• Is decision-making centralized or decentralized?
• How do the employees align themselves to the strategy?
• How is information shared across the organization?
• What are the primary processes and systems of the organization? 
• What are the system controls and where are they?
• How do you track progress?
• What are the processes and rules the team sticks with to keep on track? 
• What are the core competencies of the organization? Are these skills sufficiently available? 
• Are there any skill gaps?
• Are the employees aptly skilled to do their job? 
• What do you do to monitor, evaluate and improve skills? 
• What is it that the company is known for doing well? 
• How many employees are there? 
• What are the current staffing requirements? 
• Are there any gaps in the required resources? 
• What needs to be done to address them?
• What is the management style like? 
• How do the employees respond to this style?
• Are employees competitive, collaborative or cooperative? 
• What kind of tasks, behaviors, and deliverables does the leadership reward? 
• What kind of teams are there in the organization? Are there real teams or are they just nominal groups? 
• What are the mission and vision of the organization? 
• What are your ideal and real values? 
• What are the core values the organization was founded upon? 
• How does the company incorporate these values in daily life? 

Step 2: Determine the ideal situation of the organization 

Specify where you ideally want to be and the optimal organizational design you want to achieve, with the help of the senior management. This will make it easier to set your goals and come up with a solid action plan to implement the strategy. 

Since the optimal position you want to be in is still not known to you, you will have to collect data and insight through research on the organizational designs of competitors and how they coped with organizational change. Answering the questions above are just the starting point. 

To understand what your organization is best at, use the Hedgehog Concept by Jim Collins

Step 3: Develop your action plan

Here you will identify which areas need to be realigned and how you would do that. The result of this step should be a detailed action plan listing the individual steps you need to take to get to your desired situation, along with other important details such as task owners, timeframes, precautions and so on.

Step 4: Implement the action plan 

Successfully executing the action plan is depended on who executes it. Therefore you need to make sure that you assign the tasks to the right people in your organization. Additionally, you can also hire consultants to guide the process. 

Step 5: Review the seven elements from time to time

Since the seven elements are subjected to constant change, reviewing them periodically is essential. A change in one element will affect all the others, which will require you to implement a new organization design. Review the situation frequently to stay aware of the remedial action you might want to take.

Advantages and Disadvantages of McKinsey 7-S Model 

• Considers 7 elements of strategic fit, which is more effective than the traditional model that only focuses on strategy and structure
• It helps align the processes, systems, people, and values of an organization
• Since it analyzes each element and the relationship between them in detail, it ensures that you miss no gaps caused by changed strategies
• Helps organizations identify how they should align the different key parts of the organization to achieve their goals

Disadvantages

• It requires the organization to do a lot of research and benchmarking, which makes it time-consuming
• It only focuses on internal elements, while paying no attention to the external elements that may affect organizational performance.
• It requires the help of senior management which may not be readily available depending on how busy they are

To analyze and understand the performance or the functioning of the organization use Weisboard’s six box model framework.

What’s Your Take on the McKinsey 7-S Model? 

The McKinsey 7S model is a proven framework for helping organizations understand how to get from their current situation to the situation they prefer to be in. 

Maybe you are a big fan of the McKinsey 7S model. Maybe you prefer another strategy framework that has worked well for you. We’d love to hear what you feel about the subject; give your feedback in the comments section below. 

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

More Related Articles

Leave a comment Cancel reply

Please enter an answer in digits: twelve + 8 =

Download our all-new eBook for tips on 50 powerful Business Diagrams for Strategic Planning.

McKinsey 7S Model

Definition of the McKinsey 7S Model

McKinsey 7S model is a tool that analyzes company’s organizational design by looking at 7 key internal elements: strategy, structure, systems, shared values, style, staff and skills, in order to identify if they are effectively aligned and allow the organization to achieve its objectives.

What is the McKinsey 7S Model

McKinsey 7S model was developed in the 1980s by McKinsey consultants Tom Peters, Robert Waterman and Julien Philips with help from Richard Pascale and Anthony G. Athos. Since its introduction, the model has been widely used by academics and practitioners and remains one of the most popular strategic planning tools.

It sought to present an emphasis on human resources (Soft S), rather than the traditional mass production tangibles of capital, infrastructure and equipment, as a key to higher organizational performance.

The goal of the model was to show how 7 elements of the company: Structure, Strategy, Skills, Staff, Style, Systems, and Shared values, can be aligned together to achieve effectiveness in a company.

The key point of the model is that all the seven areas are interconnected and a change in one area requires change in the rest of a firm for it to function effectively.

Below you can find the McKinsey model, which represents the connections between seven areas and divides them into ‘Soft Ss’ and ‘Hard Ss’. The shape of the model emphasizes the interconnectedness of the elements.

The model can be applied to many situations and is a valuable tool when organizational design is at question. The most common uses of the framework are:

• To facilitate organizational change.
• To help implement a new strategy.
• To identify how each area may change in the future.
• To facilitate the merger of organizations.

In the McKinsey model, the seven areas of organization are divided into the ‘soft’ and ‘hard’ areas. Strategy, structure and systems are hard elements that are much easier to identify and manage when compared to soft elements.

On the other hand, soft areas, although harder to manage, are the foundation of the organization and are more likely to create a sustained competitive advantage.

Strategy is a plan developed by a firm to achieve sustained competitive advantage and successfully compete in the market. What does a well-aligned strategy mean in the 7S McKinsey model?

In general, a sound strategy is one that’s clearly articulated, long-term, helps to achieve a competitive advantage, and reinforced by a strong vision, mission, and values.

But it’s hard to tell if such a strategy is well-aligned with other elements when analyzed alone. So the key in the 7S model is not to look at your company to find the great strategy, structure, systems and etc. but to look if it’s aligned with other elements.

For example, a short-term strategy is usually a poor choice for a company, but if it’s aligned with the other 6 elements, then it may provide strong results.

Structure represents the way business divisions and units are organized and includes the information on who is accountable to whom. In other words, structure is the organizational chart of the firm. It is also one of the most visible and easy-to-change elements of the framework.

Systems are the processes and procedures of the company, which reveal the business’ daily activities and how decisions are made. Systems are the area of the firm that determines how business is done and it should be the main focus for managers during organizational change.

Skills are the abilities that a firm’s employees perform very well. They also include capabilities and competencies. During organizational change, the question often arises of what skills the company will really need to reinforce its new strategy or new structure.

Staff element is concerned with what type and how many employees an organization will need and how they will be recruited, trained, motivated and rewarded.

Style represents the way the company is managed by top-level managers, how they interact, what actions do they take and their symbolic value. In other words, it is the management style of the company’s leaders.

Shared Values

Shared Values are at the core of McKinsey’s 7S model. They are the norms and standards that guide employee behavior and company actions and thus, are the foundation of every organization.

The authors of the framework emphasize that all elements must be given equal importance to achieve the best results.

Using the McKinsey 7S framework

As we pointed out earlier, the McKinsey 7S framework is often used when organizational design and effectiveness are in question. It is easy to understand the model but much harder to apply it to your organization due to a common misunderstanding of what should well-aligned elements be like.

We provide the following steps that should help you to apply this tool:

Step 1. Identify the areas that are not effectively aligned

During the first step, your aim is to look at the 7S elements and identify if they are effectively aligned with each other. Normally, you should already be aware of how 7 elements are aligned in your company, but if you don’t, you can use the checklist from WhittBlog to do that.

After you’ve answered the questions outlined there, you should look for the gaps, inconsistencies, and weaknesses between the relationships of the elements. For example, you designed a strategy that relies on quick product introduction, but the matrix structure with conflicting relationships hinders that, so there’s a conflict that requires a change in strategy or structure.

Step 2. Determine the optimal organizational design

With the help of top management, your second step is to find out what effective organizational design you want to achieve. By knowing the desired alignment, you can set your goals and make the action plans much easier.

This step is not as straightforward as identifying how seven areas are currently aligned in your organization for a few reasons.

First, you need to find the best optimal alignment, which is not known to you at the moment, so it requires more than answering the questions or collecting data.

Second, there are no templates or predetermined organizational designs that you could use and you’ll have to do a lot of research or benchmarking to find out how other similar organizations coped with organizational change or what organizational designs they are using.

Step 3. Decide where and what changes should be made

This is basically your action plan, which will detail the areas you want to realign and how you would like to do that. Suppose you find that your firm’s structure and management style are not aligned with the company’s values. In that case, you should decide how to reorganize the reporting relationships and which top managers the company should let go or how to influence them to change their management style so the company could work more effectively.

Step 4. Make the necessary changes

The implementation is the most important stage in any process, change or analysis and only the well-implemented changes have positive effects. Therefore, you should find the people in your company or hire consultants that are the best suited to implement the changes.

Step 5. Continuously review the 7S

The seven elements: strategy, structure, systems, skills, staff, style and values are dynamic and change constantly. A change in one element always has effects on the other elements and requires implementing a new organizational design. Thus, continuous review of each area is very important.

Example of McKinsey 7S Model

We’ll use a simplified example to show how the model should be applied to an existing organization.

Current position #1

We’ll start with a small startup which offers services online. The company’s main strategy is to grow its share in the market. The company is new, so its structure is simple and made of a few managers and bottom-level workers who undertake specific tasks. There are a very few formal systems, mainly because the company doesn’t need many at this time.

So far, the 7 factors are aligned properly. The company is small and there’s no need for a complex matrix structure and comprehensive business systems, which are very expensive to develop.

McKinsey 7S Example (1/3)

Current position #2

The startup has grown to become a large business with 500+ employees and now maintains a 50% market share in the domestic market. Its structure has changed and it is now a well-oiled bureaucratic machine.

The business expanded its staff and introduced new motivation, reward and control systems. Shared values evolved and now the company values enthusiasm and excellence. Trust and teamwork have disappeared due to so many new employees.

The company expanded and a few problems came with it. First, the company’s strategy is no longer viable. The business has a large market share in its domestic market, so the best way for it to grow is either to start introducing new products to the market or to expand to other geographical markets. Therefore, its strategy is not aligned with the rest of the company or its goals. The company should have seen this but it lacks strategic planning systems and analytical skills.

Business management style is still chaotic and it is a problem of top managers lacking management skills. The top management is mainly comprised of founders who don’t have the appropriate skills. New skills should be introduced to the company.

McKinsey 7S Example (2/3)

Current position #3

The company realizes that it needs to expand to other regions, so it changes its strategy from market penetration to market development. The company opens new offices in Asia, North and South America.

The company introduced new strategic planning systems and hired new management, which brought new analytical, strategic planning, and, most importantly, managerial skills. The organization’s structure and shared values haven’t changed.

Strategy, systems, skills and style have changed and are now properly aligned with the rest of the company. Other elements like shared values, staff and organizational structure are misaligned.

First, the company’s structure should have changed from a well-oiled bureaucratic machine to a division structure. The division structure is designed to facilitate operations in new geographic regions. This hasn’t been done and the company will struggle to work effectively.

Second, new shared values should evolve or be introduced in an organization because many people from new cultures come to the company and they all bring their own values, often very different than the current ones. This may hinder teamwork performance and communication between different regions. Motivation and reward systems also have to be adapted to cultural differences.

McKinsey 7S Example (3/3)

We’ve shown a simplified example of how the McKinsey 7S model should be applied. It is important to understand that the seven elements are much more complex in reality, and you’ll have to gather a lot of information on each of them to make any appropriate decision.

The model is simple, but it’s worth the effort to do one for your business to gather some insight and find out if your current organization is working effectively.

• GE McKinsey Matrix
• The Johari Window Model
• Business Model Canvas (BMC)
• Elaboration Likelihood Model of Persuasion

5 thoughts on “McKinsey 7S Model”

For sure this article is one of the most useful and complete guidelines on 7S model.

Thanks Alireza Nami

Hello! Thanks for this. The article has explained comprehensively well how the 7S McKinsey framework works. 🙂 The case studies illustrated clearly how alignment should be investigated.

Thank so much. Tina Saulo

Can we adopt McKinsey 7S Model for gap analysis of data generation system or simply for data gap analysis of SDGs?

Very well explained. Very simple to follow.

Wanted to know how does McKinsey 7S Model differentiate from EFQM Model.

Excellent and accessible insight on the application of the model

Leave a Comment Cancel reply

Save my name and email in this browser for the next time I comment.

The complete guide to the McKinsey 7-S model

A company is a complex ecosystem, and you never truly know how changing one aspect might affect others.

But you can get close.

The McKinsey 7-S model offers a holistic understanding of an organization, breaking it down into seven key elements you must balance to achieve alignment and, thus, company success. The trick to effectively leveraging this organizational framework lies in understanding how each factor affects the whole — and what you’d like this whole to look like.

What’s the McKinsey 7-S model?

The McKinsey 7-S model is a strategic planning framework former McKinsey and Co. consultants Thomas J. Peters and Robert H. Waterman developed in their book “ In Search of Excellence .” The model defines how to reach company objectives by aligning these seven elements:

• Shared values

This framework then categorizes these seven elements as follows:

• Hard elements include strategy, structure, and systems. These are factors leadership professionals can easily identify.
• Soft elements include skills, staff, style, and shared values, and these are culture-driven and more difficult to pinpoint.

Notice how there are more soft than hard elements. A key aim of Peters and Waterman’s project was to show that intangible factors, like staff and working styles, are crucial to how a company performs. Another goal was to showcase how connected every element is: When one changes, company leaders must assess how this change has affected every other factor to find balance.

The 7 elements of the McKinsey 7-S framework

To better understand the interconnectedness this framework showcases, here’s more on each element. A company that’s successfully implementing the 7-S framework will ensure each of these seven elements aligns with the others:

• Strategy: This is the long-term and high-level strategy company leaders create to encourage company success. You’ll also include the critical success factors your team must meet to accomplish this strategy’s goals.
• Structure: A company must always have a clear organizational structure that defines roles, communication cadences, and chains of command. For example, the McKinsey and Co. hierarchy is quite standard, with most firms following some version of this cadence: Analyst, Senior Analyst, Associate, Engagement Manager, Principal, Partner.
• Systems: This includes all processes and procedures, like how to onboard an employee, take vacation time, or use the team communication platform. These processes directly affect how employees complete their work, so ensuring alignment is crucial.
• Skills: Each employee offers a unique skill set that leaders can leverage to achieve company objectives. When deciding how to make organizational changes to ensure all seven factors are aligned, leaders will identify and fill any skill gaps.
• Staff: This covers everything staff-related, like how many employees a team or company has now versus what they’ll need in five, 10, and 15 years.
• Style: The 7-S framework also includes overall management styles and how they affect company culture.
• Shared values: This component sits at the center of the 7-S model, connecting every other element. It includes every norm and standard leaders exemplify to guide employee work and the overall workplace culture.

The pros and cons of the McKinsey 7-S model

Viewing your organization as a seven-piece whole when conducting strategic planning or adjusting to changes might feel daunting — and it is.

The greatest disadvantage of using this framework is that it requires extensive research and data analysis. You must accurately document, audit, and measure the efficacy of factors like employee skill sets and how your current organizational structure is performing. And you must also heavily research alternatives, considering how they’ll affect each of the seven elements before deciding whether to implement changes.

That said, if you’re a medium-to-large organization with the resources to implement and maintain this framework, the McKinsey method offers several benefits. This systems-thinking-style method, where you consider how each part affects the whole:

• Offers you a more comprehensive understanding of your organization’s performance
• Shows the broader impacts of small changes, like how filling a skill gap affects structures, processes, and staff
• Aligns all company operations around shared values you’ve thoughtfully developed to ensure everyone contributes work that respects these principles

When should companies use this framework?

Any company that wants to ensure these seven important factors are aligned to achieve increased efficiency and efficacy can use the 7-S framework. You might leverage it to assess how future changes will affect different elements or how previous adjustments did. Or, if you’re starting a company, you could consider each aspect to determine how you’d like to build out all seven elements.

You might even apply it on a smaller scale, like within a project. During project planning, a manager might consider how their project plan aligns with the company’s overall strategy, structure, systems, and shared values. They might also determine whether task delegation respects each employee’s role and skills. Lastly, they could consider whether their management style throughout project execution resembles that of higher-up leaders.

How to implement the McKinsey 7-S model: 5 steps

Ready to build a more comprehensive understanding of how your organization functions — and how you could improve it? Here’s a five-step guide on implementing the 7-S model.

1. Define your desired state

Working closely with the leadership team, outline your ideal version of each of the seven elements. Start with shared values to ensure you entrench these principles into every aspect of the company as you define each element. You’ll also want to include thorough strategic planning in this stage to better understand how you must define the other five elements in order to meet broad company objectives.

2. Analyze each element

Now, review the company’s current state of affairs. Gather research and create thorough definitions, not worrying yet about whether everything aligns with your desired state.

3. List improvement areas

Perhaps the most daunting step, compare your desired state with your current state to illuminate gaps. Here are some factors you might consider:

• Does our management style align with our shared values?
• Are there any skills gaps, and if so, do we have a hiring plan for filling them?
• Is there anything we can do to better support employees?
• Are there any glaringly misaligned elements, like a shared value of cross-functional teamwork when most employees work independently and departments are often siloed?

4. Prepare an operational implementation plan

With your list of improvement areas in hand, create a McKinsey change management action plan that roadmaps how to re-align each of the seven elements. Include the following information in your action plan:

• A general implementation timeline
• A follow-up/progress review plan
• A section discussing how you’ll monitor and track progress and success
• A list of employees taking charge of actioning this implementation plan
• A section for each of the seven elements, with action items that include due dates, resource necessities, employee assignees, and success metrics

5. Review progress, make changes

Routinely check employee progress as they execute your plan, tracking success metrics and making changes as you go. And, to respect the “Staff” element, frequently ask employees for feedback on this change, implementing it as needed.

An example of the 7-S model in action

McDonald’s is an oft-cited example of a company that leverages the McKinsey 7-S model to improve overall alignment and enjoy increased success. Here’s a brief overview of their 7-S elements:

• Strategy: McDonald’s focuses on a cost-leadership approach, meaning they strive to have the lowest-cost operation in the industry.
• Structure: To simplify and streamline operations, McDonald’s uses a flatter organizational structure than most large corporations, with store managers leading all of a location’s employees.
• Systems: McDonald’s constantly improves the entire production and supply process to reduce costs and increase customer service value. Their app ordering and self-serve kiosks are excellent examples of this.
• Skills: To improve employee performance and, in turn, reduce costs, McDonald’s offers frequent training and workshops.
• Staff: To respect the shared values of diversity and inclusion, McDonald’s employs workers from more marginalized communities. The previously mentioned training workshops also contribute to employee development to increase productivity and the customer service experience.
• Style: McDonald’s uses a more participative management style, with leaders frequently collecting and implementing employee and customer feedback.
• Shared values: McDonald’s’ core values are: serve, inclusion, integrity, community, and family. They respect these values throughout each of the other six elements, focusing on providing excellent customer service and building a close workplace community built on respect and continuous development.

Use Tempo’s tools to streamline your strategic planning

Once you’ve crafted your operational implementation plan, pair it with a comprehensive roadmap that clearly visualizes how your team will get from point A to point B. Roadmunk by Tempo lets you quickly create a flexible guide you can adjust to accommodate any roadblocks and challenges. Then, use Timesheets by Tempo to track team progress on important action items for overall implementation plan visibility.

Latest Blog Posts

Maximize project management with Kanban board templates

What’s a project timeline template? A complete guide for beginners

Perfect your next project: Insights for using project plan templates

Strategic plan templates: The secret weapon of successful enterprises

Streamline your tasks with these top resource planning templates

How stellar workflow templates are the secret to improved efficiency

Creating success: The product development process in 6 steps

Product velocity: First-to-market or first-to-fail?

How to calculate the expected monetary value of your project

Try roadmunk for free.

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

Put Marketing at the Core of Your Growth Strategy

• Marc Brodherson,
• Jennifer Ellinas,

Three ways to use marketing as a lever for growth, according to McKinsey research.

Companies that make the decision to put marketing at the core of their growth strategy outperform the competition, according to McKinsey research. Specifically, both B2C and B2B companies who view branding and advertising as a top two growth strategy are twice as likely to see revenue growth of 5% or more than those that don’t (67% to 33%). Yet their research also showed that few CEOs recognize the potential for marketing as a growth accelerator. They recommend three actions for CEOs to hit the reset button. The first is to define what you need from marketing. While it sounds obvious, their research found that more than half the time CEOs and CMOs in the same company were misaligned on marketing’s primary role. Second, nominate one person to serve as the chief voice of the customer. In two many organizations this is fragmented, and when everyone owns the customer, then no one does. Third, the CEO should function as a growth coach. They should have a handle on the challenges and opportunities of modern marketing, but their job is to draw up the strategy, not toss the ball down the field.

Growth is a perpetual business priority. So it’s imperative that CEOs understand how their marketing function and chief marketing officers (CMOs) can contribute to that goal. Few do — and that misalignment can be costly.

• Marc Brodherson is a senior partner in McKinsey & Company’s New York office.
• Jennifer Ellinas is an associate partner in McKinsey & Company’s Toronto office.
• Ed See is a partner in McKinsey & Company’s Stamford, Connecticut office.
• Robert Tas is a partner in McKinsey & Company’s Stamford, Connecticut office.

Partner Center

• Data, AI, & Machine Learning
• Managing Technology
• Social Responsibility
• Workplace, Teams, & Culture
• AI & Machine Learning
• Diversity & Inclusion
• Big ideas Research Projects
• Artificial Intelligence and Business Strategy
• Responsible AI
• Future of the Workforce
• Future of Leadership
• All Research Projects
• AI in Action
• Most Popular
• The Truth Behind the Nursing Crisis
• Coaching for the Future-Forward Leader
• Measuring Culture

Our summer 2024 issue highlights ways to better support customers, partners, and employees, while our special report shows how organizations can advance their AI practice.

• Past Issues
• Upcoming Events
• Video Archive
• Me, Myself, and AI
• Three Big Points

The Real Value of Strategic Planning

• Developing Strategy

Most companies invest a significant amount of time and effort in a formal, annual strategic planning process — but many executives see little benefit from the investment. One manager told us, “Our planning process is like a primitive tribal ritual — there is a lot of dancing, waving of feathers and beating of drums. No one is exactly sure why we do it, but there is an almost mystical hope that something good will come out of it.” Another said, “It’s like the old Communist system: We pretend to make strategy and they pretend to follow it.”

Management thinker Henry Mintzberg has gone so far as to label the phrase “strategic planning” an oxymoron. 1 He notes that real strategy is made informally — in hallway conversations, in working groups, and in quiet moments of reflection on long plane flights — and rarely in the paneled conference rooms where formal planning meetings are held. Our own research on strategic planning supports Mintzberg’s observation: We found that few truly strategic decisions are made in the context of a formal process. But we also found that, when approached with the right goal in mind, formal planning need not be a waste of time and can, in fact, be a real source of competitive advantage. See “About the Research.”) Companies that achieved such success used strategic planning not to generate strategic plans but as a learning tool to create “prepared minds” within their management teams (to paraphrase Louis Pasteur). 2

About the Research

We began our research by looking in depth at the strategic planning processes of 30 companies, including some that have highly regarded records of long-term strategic success and others that have made serious strategic blunders in recent years. The companies represented a variety of industries and had approaches to strategic planning that ranged from seat-of-the-pants to very analytical and buttoned-up. Our sources of information for the case studies included public information, interviews with top managers, interviews with former executives, prior McKinsey research and academic research. We then developed hypotheses about what constituted the most effective approach to strategic planning, tested them in workshops and discussions with approximately 50 additional companies around the world, and worked with many of those companies to transform their strategic planning processes.

About the Authors

Sarah Kaplan, formerly an innovation specialist with McKinsey & Company, is a doctoral candidate at the MIT Sloan School of Management. Eric D. Beinhocker is a principal in McKinsey’s London office. They can be reached at [email protected] and [email protected].

1. H. Mintzberg and J. Lampel, “Reflecting on the Strategy Process,” Sloan Management Review 40 (spring 1999): 21–30.

2. Pasteur famously said that “chance favors the prepared mind” in describing his own breakthrough research.

3. Prepared minds, however, are a necessary but not sufficient condition for good strategy making in today’s intensely competitive markets. Long-term success also depends on a company’s ability to develop truly creative and innovative strategies, which is why formal processes must be balanced by informal ones that allow for creative experimentation. See E. Beinhocker, “Robust Adaptive Strategies,” Sloan Management Review 40 (Spring 1999): 83–94; S.L. Brown and K.M. Eisenhardt, “Competing on the Edge: Strategy as Structured Chaos” (Boston: Harvard Business School Press, 1998); R. Foster and S. Kaplan, “Creative Destruction: Why Companies That Are Built To Last Underperform the Market — and How To Successfully Transform Them” (New York: Currency/Doubleday, 2001); and G. Hamel, “Leading the Revolution” (Boston: Harvard Business School Press, 2000).

More Like This

Add a comment cancel reply.

You must sign in to post a comment. First time here? Sign up for a free account : Comment on articles and get access to many more articles.

• What is Strategy?
• Business Models
• Developing a Strategy
• Strategic Planning
• Competitive Advantage
• Growth Strategy
• Market Strategy
• Customer Strategy
• Geographic Strategy
• Product Strategy
• Service Strategy
• Pricing Strategy
• Distribution Strategy
• Sales Strategy
• Marketing Strategy
• Digital Marketing Strategy
• Organizational Strategy
• HR Strategy – Organizational Design
• HR Strategy – Employee Journey & Culture
• Process Strategy
• Procurement Strategy
• Cost and Capital Strategy
• Business Value
• Market Analysis
• Problem Solving Skills
• Strategic Options
• Business Analytics
• Strategic Decision Making
• Process Improvement
• Project Planning
• Team Leadership
• Personal Development
• Leadership Maturity Model
• Leadership Team Strategy
• The Leadership Team
• Leadership Mindset
• Communication & Collaboration
• Problem Solving
• Decision Making
• People Leadership
• Strategic Execution
• Executive Coaching
• Strategy Coaching
• Business Transformation
• Strategy Workshops
• Leadership Strategy Survey
• Leadership Training
• Who’s Joe?

STRATEGY FRAMEWORKS TEMPLATE

The Compendium of Strategy Frameworks is 168 PowerPoint slides of strategy frameworks, worksheets, charts , templates, icons, and professional graphics. Developed by a McKinsey alum and the founder of Stratechi.com, this is your one-stop shop for the top-used strategy frameworks for your strategic planning and analysis needs. Below you can view the preview of the deck, the table of contents, and each individual slide.

Included are many of the most used strategy frameworks covering competitive dynamics , market analysis , decision-making , strategic dynamics, growth strategies , organizations , strategic planning , McKisney-style charts and graphs, process strategy , problem solving , business models , management & leadership , and goals & metrics . You get all of the top hits such as SWOT Analysis, Porter's 5 Forces, PESTLE , the ANSOFF Growth Matrix, the Change Management Model, most of the Stratechi.com frameworks and worksheets, and so much more. Professionally designed strategy frameworks, charts, icons, and graphics. Don't reinvent the wheel, simply download the Compendium of Strategy Frameworks to get you started.

$95.00 – Purchase Checkout Added to cart

OR BUY THE VALUE PACK

$150.00 – Purchase Checkout Added to cart VALUE PACK INCLUDES: This Template Plus...

HR & Org Strategy - 186 pages Sales Plan - 101 pages Strategic Plan - 121 pages Market Analysis - 114 pages Business Model - 17 pages

ALL 168 PAGES OF THE COMPENDIUM OF STRATEGY FRAMEWORKS

The 168 slides in the Strategy Frameworks Compendium template includes:

4. STRATEGY FRAMEWORKS 5. BCG Growth Share Matrix 6. McKinsey Three Horizons of Growth 7. SWOT Analysis 8. SWOT Analysis Worksheet 9. Porter’s Five Forces 10. Porter’s Five Forces Worksheet 11. Adoption Curve Growth Markets 12. Adoption Curve Customer Segments 13. Ansoff Growth Matrix 14. PESTLE Analysis 15. PESTLE Analysis Topics 16. PESTLE Analysis Worksheet 17. Balanced Scorecard 18. Balanced Scorecard Worksheet 19. Balanced Scorecard Template 20. Prioritization Matrix 21. Prioritization Matrix Template 22. The 5Ws and 1H of Strategy 23. The 5Ws and 1H Worksheet 24. The 4Ps of Marketing 25. The 4 Ps of Marketing Worksheet 26. The 8Ps of Marketing 27. The 8Ps of Marketing Worksheet 28. Net Promoter Score 29. Change Management Model 30. Change Management Template 31. Minto Pyramid Principle 32. Customer Purchase Funnel 33. Customer Journey Template 34. Profit Tree 35. Will Skill Matrix 36. High-Performing Team Conditions 37. Project Management Triangle 38. SMART Goals 39. STRATECHI FRAMEWORKS 40. The Definition of Strategy 41. The Core of Business Strategy 42. Business Model Framework

85. 3 Strategy Yin Yang Slide 86. 4-Part Puzzle Piece 87. Roadmap Slide 88. 4-Part Flower Framework 89. 8-Part Flower Framework 90. Speedometer Slide 91. Pyramid Framework 92. 3-Ellipse Framework 93. Funnel Framework 94. Alternative Funnel 95. Project Template 96. Performance Template 97. 3-Box Framework 98. Staircase Framework 99. Org Chart 100. US Map 101. Global Map 102. Downward Flow Template 103. 4-Piece Process Framework 104. Core Initiative Framework 105. Milestone Framework 106. 4-Box Framework 107. 3-Box Framework 108. 3-Box Segmented Framework 109. KPI Template 110. KPI Goal Template 111. STRATEGY ICONS 112. Light Blue Background 1 of 3 113. Light Blue Background 2 of 3 114. Light Blue Background 3 of 3 115. Dark Blue Background 1 of 3 116. Dark Blue Background 2 of 3 117. Dark Blue Background 3 of 3 118. White Icons 1 of 3 119. White Icons 2 of 3 120. White Icons 3 of 3 121. Dark Blue Icons 1 of 3 122. Dark Blue Icons 2 of 3 123. Dark Blue Icons 3 of 3 124. CHARTS 125. Donut Chart 126. Pie Charts

125. Donut Chart 126. Pie Charts 127. Historical Column Chart 128. Stacked Column Chart 129. 100% Stacked Column Chart 130. Alternative Stacked Column 131. 100% Stacked Bar Chart 132. Waterfall Chart 133. Bubble Chart 134. Radar Chart 135. Process Map Icons 136. Process Map Example 137. OTHER FRAMEWORKS 138. Problem Statement Worksheet 139. Hypothesis Tree Template 140. Decision Matrix 141. Process Maturity Worksheet 142. 8 Forms of Waste Worksheet 143. Comprehensive SWOT Analysis 144. ROLES Framework 145. ROLES Worksheet 146. Project Team Charter 147. Strategic Alignment Charter 148. Culture Charter 149. Governance Worksheet 150. Meeting Charter 151. SMART Goals Worksheet 152. Change Mgmt. Worksheet 153. Will Skill Assessment 154. 7 Sources of Power 155. Personal Power Plan Worksheet 156. Functions Framework 157. Product Roadmap 158. Alternative Product Roadmap 159. Project Plan Template 160. Project Management Scorecard 161. KPI Worksheet 162. Analytical Model Template 163. Negotiation Worksheet 164. Service Benchmarking 165. Product Benchmarking 166. Service Idea Template 167. Product Idea Template

Preview the Strategy Frameworks Compendium

DOWNLOAD STRATEGY PRESENTATION TEMPLATES

THE $150 VALUE PACK - 600 SLIDES 168-PAGE COMPENDIUM OF STRATEGY FRAMEWORKS & TEMPLATES 186-PAGE HR & ORG STRATEGY PRESENTATION 100-PAGE SALES PLAN PRESENTATION 121-PAGE STRATEGIC PLAN & COMPANY OVERVIEW PRESENTATION 114-PAGE MARKET & COMPETITIVE ANALYSIS PRESENTATION 18-PAGE BUSINESS MODEL TEMPLATE

JOE NEWSUM COACHING

EXECUTIVE COACHING STRATEGY COACHING ELEVATE360 BUSINESS TRANSFORMATION STRATEGY WORKSHOPS LEADERSHIP STRATEGY SURVEY & WORKSHOP STRATEGY & LEADERSHIP TRAINING

THE LEADERSHIP MATURITY MODEL

Explore other types of strategy.

BIG PICTURE WHAT IS STRATEGY? BUSINESS MODEL COMP. ADVANTAGE GROWTH

TARGETS MARKET CUSTOMER GEOGRAPHIC

VALUE PROPOSITION PRODUCT SERVICE PRICING

GO TO MARKET DISTRIBUTION SALES MARKETING

ORGANIZATIONAL ORG DESIGN HR & CULTURE PROCESS PARTNER

EXPLORE THE TOP 100 STRATEGIC LEADERSHIP COMPETENCIES

TYPES OF VALUE MARKET ANALYSIS PROBLEM SOLVING

OPTION CREATION ANALYTICS DECISION MAKING PROCESS TOOLS

PLANNING & PROJECTS PEOPLE LEADERSHIP PERSONAL DEVELOPMENT

How to use McKinsey’s three horizons of growth to find balance for your business

Reading time: about 8 min

It may seem odd, but some companies are content to keep doing what they’ve been doing because it’s been successful so far. Their customers are happy, their employees are happy, they’re meeting their goals, and they see no reason to change. They may add a few employees from time to time to keep up with demand, but the base operation remains the same.

But if the industry shifts, the company might not be prepared. If they keep doing business the way they’ve always done it, they can stagnate, lose the ability to innovate and grow, and lose their customers.

The last couple of decades have taught us that industries will change, and the change is rapid. Companies that can’t innovate or grow to address industry shifts could be doomed to fail. For example, the rapid growth and development of the internet and web browsers in the 1990s caught the newspaper industry off guard. Thousands of newspapers have closed permanently since 2004, and thousands of jobs have been lost. The newspapers that still survive are those that could see beyond print media and found innovative ways to work with the internet. 

This is where McKinsey’s three horizons of growth come in. The ideas presented in this model can help companies to find a balance between current working operations, and growing in new directions.

What is the three horizon framework?

The three horizons model was first introduced by McKinsey consultants Mehrdad Baghai, Stephen Coley, and David White in their 1999 book, The Alchemy of Growth . It is a growth strategy framework that is designed to keep you focused on innovation and sustained growth. It is a structured approach that helps you look at and evaluate potential growth opportunities while ensuring that current operations are not neglected.

With this framework, you manage business and growth using three horizons that represent short-term building and maintaining current core business, medium-term expansion and exploration into new opportunities, and research and ideas for future growth and new business opportunities.

Each horizon has a different focus, so you will need a different management style for each one. For example, horizon one has a short-term focus that can be managed by team leads looking at current trends and analysis of what’s working and what needs to be fixed. Horizon one is where the bulk of your company’s business is done. At the same time, horizon two and horizon three require the attention from senior management and executives as they plan out the company’s long-term strategic goals and determine in which direction to go next.  

Horizon one: Core business

This horizon generally gets a lot of attention because it represents the current business. Here is where you analyze what is currently working, what may have peaked, what your strengths and weaknesses are, and what you might need to abandon. This is a short term horizon (six months to three years) that has the goal of defending the core business and understanding current value.

While you are looking at ways to grow, you can’t simply abandon what you are currently doing. Horizon one keeps you focused on satisfying current customers while you make tactical improvements so you can extend the business to new customers. 

For example, adding security measures to fix a potential threat can add value to a current app and possibly get you more customers. But any competitive advantages tend to be short-lived. 

A large portion of your resources are funneled into this horizon to support current innovations. But at the same time, you’ll want to funnel some of your resources to be used in horizons two and three.

Horizon two: Emerging opportunities

Here you take what you have and extend it to new business opportunities within the next two to five years. Your job now is to identify the opportunities that most likely will bring success when they’re added to your company’s portfolio. You should look at things that align well with or extend your current business model. Explore opportunities that will bring in new customers, expand into new markets, or help you to reach new goals.

Then you’ll need to figure out how these new businesses will be supported—assets you’ll need, specific skill sets when hiring new talent, acquiring new technology, merging business resources, and so on.

This might require a large initial investment. But if what you choose to do is a logical extension of your current business model, you should see some reliable returns on your investments. Examples might include launching a new product line or expanding your business geographically.

Horizon three: Long-term goals

Your company’s value has grown and now it’s time to think of what you will do in the next five to twelve years. Horizon three is where you think about creating completely new opportunities. This could include focusing on new markets or starting new businesses. It can also include long-term research projects and pilot programs. You might set up new divisions within your organization, or you might start up entirely new business units through acquisitions and mergers.

This type of expansion will require a large amount of money. And it’s possible that some of your ideas are unproven and won’t be profitable for a significant amount of time. But when done well, these costs are offset by new income sources. 

Benefits of using the three horizons of growth 

In large companies it’s not unusual for different departments, managers, and teams to have differing visions of the company’s future path. The three growth horizons model can benefit you in the following ways:   

• It helps you to align varying visions of the company’s future growth by showing everybody the innovation plan and the goals you’ll need to accomplish in that plan.  
• It gives you a common language from top to bottom in the organization that is easy to understand, and that can be used to describe how the company is planning and investing for growth.  
• It helps you to communicate the timeline for each horizon, including when you expect to see positive results and a return on your investment.  
• It helps you to visualize your company’s future so you can more easily manage your company’s portfolio and growth strategy.

How to use the three horizons model

Whether you use an existing template or creating your own, your three horizons template should look similar to this:

• The horizontal axis (the x-axis) represents the approximate amount of time it might take before you begin to see results from the efforts you put into the activities in each horizon. You should not look at these times in terms of “we’ll do this, then we’ll do that.” Instead, you need to remember that successful implementation of the three horizons requires that all three are managed concurrently.  
• The vertical axis (the y-axis) represents value creation or the profits you get from your various business activities within each growth horizon. 

Apply the the 70/20/10 rule

This is a simple rule that helps you to determine the proportion of time and resources that should be applied to each growth horizon. The 70/20/10 rule is a guideline that says you should:

• Use 70% of your resources and time on the core businesses in horizon one. You want to use the majority of your resources in this area because these are the businesses that have been successful and proven to win against your competition. The work in this horizon is important because you are always looking for ways to get as much value as possible from proven activities.  
• Use 20% on emerging businesses that show great promise and that could give you an advantage over your competitors. These ventures have the potential to add a significant amount of value to your business, and the potential for increasing your revenue streams. Some of the businesses and activities in horizon two may fail, so you’ll want to make sure you have enough resources to ensure that there are successes to carry you to horizon three.  
• 10% of your resources are assigned to horizon three. If you don’t ensure that you have resources assigned here, you might lose sight of your company’s ultimate goals. When that happens, you could end up spinning your wheels in horizon two without making any progress. Most of the work here will focus on research and experimentation. A lot of the ideas here are visionary and will be new to the world when they are released. Executives and senior managers are best suited for managing the long-term goals of horizon three.  

Planning for the future with care—and an eye toward innovation

Bring balance to your business—use Lucidspark’s 3 horizons of growth template.

About Lucidspark

Lucidspark, a cloud-based virtual whiteboard, is a core component of Lucid Software's Visual Collaboration Suite. This cutting-edge digital canvas brings teams together to brainstorm, collaborate, and consolidate collective thinking into actionable next steps—all in real time. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidspark.com.

Bring your bright ideas to life.

or continue with

By registering, you agree to our Terms of Service and you acknowledge that you have read and understand our Privacy Policy .

MHC Forward

The Strategic Plan for Mount Holyoke College Spring 2024

A legacy — and future — too bold for boundaries

Rooted in the collective voices of students, faculty, staff, alums and friends of the College, our MHC Forward Strategic Plan maps an audacious vision for MHC’s next decade and beyond. This plan centers the innovative, rigorous educational opportunities that Mount Holyoke values and champions, and outlines a roadmap to leverage resources to further develop leaders who make lasting, positive change in today’s increasingly global world.

The MHC Forward plan establishes four strategic priorities:

Executive summary

The Mount Holyoke Mission

Mount Holyoke, the leading gender-diverse women’s college, immerses students in a vibrant, intellectually adventurous global community to develop their voices and vision for the future, preparing them for lives of purposeful leadership in a culturally diverse world.

Vision Where bold leaders and boundless learners make a better world

We advance excellence.

Academic Excellence Mount Holyoke advances academic excellence with a focus on intellectual curiosity, rigorous scholarship and cross-disciplinary study

Inclusive Learning Mount Holyoke is a dynamic learning community that connects students, faculty and staff from all backgrounds to opportunities and each other

We cultivate leaders.

Active Engagement Mount Holyoke centers experiential learning on and beyond campus for responsible impact

Purposeful Leadership Mount Holyoke develops authentic leaders who make positive contributions to their communities and our world for a just and vibrant future

Academic excellence

MHC Forward’s academic excellence initiatives strengthen our distinctive approach to learning, teaching and scholarship. Together, these initiatives cultivate a creative, cross- disciplinary, and richly inquisitive culture that emboldens students and faculty to shape pathways through global intellectual and social challenges. By opening opportunities for bright minds and bold ideas to meet — across disciplines and lived experiences — we’re preparing learners and leaders to navigate complexities and make meaningful contributions to scholarship, society and the world of work.

Advancing innovation and inclusive academic excellence

Strategic pathways and initiatives.

○ Short-term (1-3 years) ◐ Medium-term (3-7 years) ● Longer-term (7+ years)

I. Make a Mount Holyoke education bold, rigorous and responsive to the needs of today's world through inclusive faculty-led and student-centered academic innovations:

○ Create a faculty institute for research and curricular innovation.

○ Create an innovation fund to support curricular and pedagogical innovation, including project-based learning and interdisciplinary co-teaching that prepares students to consider issues from multiple perspectives.

○ Launch the MHC “Changemaker” residencies: short-term residencies for alums and others who are driving positive change at the local, national or global level.

II. Invest in areas of distinction:

○ Promote Mount Holyoke’s maker culture, emphasizing creative thinking, and making and doing broadly across the curriculum, including the arts, languages, humanities, sciences and social sciences.

○ Strengthen curricular, cocurricular and study away opportunities, including short-term study away opportunities that address global perspectives.

◐ Enhance connections between the curriculum and cocurriculum around climate change, sustainability and environmental justice.

◐ Strengthen and leverage College centers by continuing to build curriculum and faculty affiliations.

III. Enhance the infrastructure that scaffolds academic excellence:

○ Expand the tenure track faculty in all divisions in a manner consistent with the objectives of the strategic plan and an augmentation of course offerings.

○ Robustly support our distinctive faculty mentorship of student research and practice in STEM, humanities, social sciences and the arts.

◐ Enhance technological/technical support for students, faculty and staff while focusing on emerging needs and opportunities.

Student experience

Through experiential learning opportunities and amplified student support throughout their MHC experience, every learner will make the most of their education. MHC Forward’s student experience initiatives bring faculty, staff, students and alums together to reimagine what it means to sustain a vibrant learning community that is responsive to change in the student population, technology, communication, culture and more. From supporting students in their transition to college to teaching them how to engage in challenging conversations to developing a best-in-class career readiness program, we’re ensuring students thrive at MHC and graduate ready to shape the future.

Enhancing the student experience on and beyond campus

I. Bolster student success and enhance retention and graduation rates:

○ Improve student learning, academic success and persistence through a well-integrated network of support that encompasses existing strengths, such as the Speaking, Arguing and Writing (SAW) Center, and new initiatives around peer-led mentoring and quantitative reasoning.

○ Expand support for academic advising, including post graduation opportunities, and increase the legibility and navigability of the curriculum.

○ Invest in a new first-year living learning program and create a residential cocurriculum.

II. Deepen students’ engagement, affinity and well-being by fostering a healthy, inclusive and diverse community:

○ Enhance the vibrancy of the student social experience, including shared experiential events and better integration with Five College social life.

○ Encourage intergroup dialogue to teach students to learn across differences, prepare for a diverse world after graduation and form lifelong bonds with one another.

○ Promote holistic health by incorporating well-being learning objectives and goals for all students, including continuous exposure to the “Be Well” program for every student.

◐ Shape an athletics program to recruit first-rate, talented scholar-athletes with competitive programs and facilities; build an inclusive community on campus; and represent Mount Holyoke at a high level to the world.

III. Execute a best-in-class career exploration and readiness program that integrates curricular and co-curricular approaches:

○ Establish a distinctive and comprehensive career initiative — co-led by faculty — that supports students as they plan their next steps after graduation. The initiative will build on universal funding for internships (The Lynk initiative), pre-professional tracks (Nexus) and the Career Development Center (CDC).

○ Create a set of “Liberal Arts in Action” seminars distributed across the curriculum that ground career preparation in the liberal arts.

○ Guarantee all students access to liberal arts-based “experiential learning” (learning-by- doing) opportunities integrated deeply and purposefully with academic study.

○ Serve communities in western Massachusetts and beyond through an increased commitment to community-based learning.

○ Strengthen career coaching and advising, grounded in the diversity of student experiences and aspirations.

○ Expand mentoring and networking opportunities with alums by creating a strong triangular relationship between alums, the College’s development office and the CDC.

Operational leadership

At MHC, our talented and diverse community comes together to live and learn on a campus that — from our founding — has been intentionally designed to support our unique mission. Generations of Mount Holyoke faculty, staff, students and alums have contributed to and cared for one of the nation’s most beautiful college campuses. Given the age of our buildings and changes in climate, technology, teaching and learning, the MHC Forward plan makes bold and necessary investments in our campus, particularly the interior spaces where we explore, learn and form lifelong bonds. By modernizing our residence halls, academic spaces and other facilities, we will ensure accessibility for all and sustainability for years to come. Coupled with initiatives to expand support for our deeply committed staff, investments in digital infrastructure and state-of-the-art learning spaces will preserve the beauty of our campus and advance the College’s commitments to curricular innovation and inclusive academic excellence.

Strengthening infrastructure for long-term success

I. Reimagine the campus for greater accessibility, sustainability and educational excellence:

◐ Modernize existing residence halls and/or build a new residence hall to enhance accessibility and improve student experience.

● Renovate Williston Memorial Library in service of inclusive academic excellence and scholarship, respecting its rich legacy and tradition and creating an accessible, technologically rich state-of-the-art space that will enable inclusive curricular and pedagogical innovation.

◐ Renovate or build an accessible classroom building to meet the needs of the life sciences in accordance with universal design and sustainability principles. It will include state-of-the-art lab spaces and flexible, technology-enabled instructional spaces.

◐ Develop a campus wide approach to address sustainability and climate change, including the replacement of the College’s fossil fuel-powered steam heating system with a geothermal heat-exchange system to reduce greenhouse gas emissions by 80%.

● Identify opportunities for further responsible carbon reduction across campus sectors and operations.

● Reimagine performing arts spaces.

II. Invest in functional supports to enhance operational effectiveness:

○ Make Mount Holyoke an employer of distinction by investing in recruiting, developing and retaining a diverse staff to support the educational mission and operational needs of the College.

◐ Install a college-wide information system to create an inclusive digital ecosystem to support operational excellence and student success.

◐ Enhance Mount Holyoke’s information and technology infrastructure, with particular focus on data analytics, artificial intelligence and machine learning, while protecting the security and privacy of the community.

Resource stewardship

With these initiatives, we are committing to attracting and retaining a diverse student body; building graduate and professional programs; increasing faculty grant funding; sustaining, expanding and establishing new relationships with generous donors; and more. Together, we can ensure Mount Holyoke forever shall be the place for learners and leaders to reach their full potential and help make a better world.

Growing resources responsibly for a thriving future

I. Expand and diversify earned revenue through mission-aligned initiatives:

○ Create a strategic enrollment plan that will attract and retain a diverse student body that will benefit from and contribute to the College’s mission, vision and values. The plan will include a sustainable financial aid program that builds on Mount Holyoke’s distinction for meeting full demonstrated need.

◐ Add new graduate and professional programs that meet emergent societal challenges and student interest.

● Leverage effects of new programs to increase the College’s reputation, reach and enrollments, in alignment with emerging areas of societal need and student interest.

○ Leverage campus facilities in support of mission-aligned programs and events that generate revenue.

◐ Leverage real estate holdings to support new and emerging needs.

II. Boost contributed revenue for strategic growth initiatives and continued inclusive excellence:

○ Complete a comprehensive fundraising campaign to support the College’s strategic initiatives and priorities.

○ Grow sponsored research and grants income with investments in faculty grants, training and support and staff development.

◐ Advance and sustain endowment growth by securing more gifts, upholding investment excellence and increasing distributions to the annual operating budget.

The plan came together

Years of research and intentional, inclusive planning, community listening and feedback sessions, students, faculty, staff, trustees, alums and friends shaping the plan.

Happening at Mount Holyoke

Campus news

Mount Holyoke College is ranked highly by The Princeton Review

The Princeton Review has released its “Best 390 Colleges” for 2025. The list, which is based on college students’ ratings of their schools, ranks Mount Holyoke College highly for academics, extracurricular activities, the campus and more.

• Academic Excellence
• Activism and Social Justice
• Awards and Honors
• Scholarships/Financial Aid

Mount Holyoke champions next generation of STEM leaders

The latest Survey of Earned Doctorate report shows that Mount Holyoke College is the leading baccalaureate source of women who earn scientific doctoral degrees.

• Science & Technology
• Women’s College

Alexa Veliz ’24 has been awarded the 2024 SOC Grant

Veliz’s project will create collaboration between local libraries and the Mount Holyoke College biology and biochemistry departments to engage younger audiences in the sciences. The project will conclude with a science fair with interactive activities.

• Diversity and Inclusion

The gen AI skills revolution: Rethinking your talent strategy

If every company needs to be a software company, do you have a software organization that can deliver? The answer to that question could be decisive for the future of many companies.

About the authors

This article is a collaborative effort by Alharith Hussin, Anna Wiesinger , Charlotte Relyea , Martin Harrysson , and Suman Thareja , with Prakhar Dixit and Thao Dürschlag, representing views from McKinsey’s Digital; Technology, Media & Telecommunications; and People & Organizational Performance Practices.

The ability to compete  depends increasingly on how well organizations can build software products and services. Already, nearly 70 percent of top economic performers, versus just half of their peers, use their own software to differentiate themselves from their competitors. One-third of those top performers directly monetize software. 1 “ Three new mandates for capturing a digital transformation’s full value ,” McKinsey, June 15, 2022. Generative AI (gen AI) offers a tantalizing opportunity to increase this value opportunity by helping software talent create better code faster.

Promising experiments that use gen AI to support coding tasks show impressive productivity improvements. Gen AI has improved product manager (PM) productivity by 40 percent, while  halving the time it takes  to document and code. At IBM Software, for example, developers using gen AI saw 30 to 40 percent jumps in productivity. 2 Shivani Shinde, “IBM Software sees 30-40% productivity gains among developers using GenAI,” Business Standard , July 9, 2024.

About QuantumBlack, AI by McKinsey

QuantumBlack, McKinsey’s AI arm, helps companies transform using the power of technology, technical expertise, and industry experts. With thousands of practitioners at QuantumBlack (data engineers, data scientists, product managers, designers, and software engineers) and McKinsey (industry and domain experts), we are working to solve the world’s most important AI challenges. QuantumBlack Labs is our center of technology development and client innovation, which has been driving cutting-edge advancements and developments in AI through locations across the globe.

Despite its promise, gen AI has barely revealed its full potential. While some 65 percent of respondents to the recent McKinsey Global Survey on the state of AI  report that they are regularly using gen AI, only 13 percent are systematically using gen AI in software engineering. 3 “ The state of AI in early 2024: Gen AI adoption spikes and starts to generate value ,” McKinsey, May 30, 2024. Our own experience working with companies reveals that gen AI tools currently help with about 10 to 20 percent of the coding activities of a developer.

Scaling gen AI capabilities requires companies to rewire how they work , and a critical focus of rewiring is on developing the necessary talent for these capabilities. The gen AI landscape and how software teams work with the technology to build products and services are likely to stabilize in the next two to three years as the technology matures and companies gain experience. The skills and practices needed to succeed now may well change considerably over time. Until then, companies must navigate through an uncertain period of change and learning.

To help successfully plot the road ahead, this article identifies the new skills software teams will require, examines how their evolution will alter roles and risks, and reveals how companies can orient their talent management practices toward developing skills for greater flexibility and responsiveness.

How software development is changing

Any engineering talent rethink needs to begin with an understanding of how gen AI will affect the product development life cycle (PDLC). The changes are likely to be significant  and affect every phase of the life cycle (exhibit). Recent McKinsey research suggests that gen AI tools have almost twice as much positive impact  on content-heavy tasks (such as synthesizing information, creating content, and brainstorming) as on content-light tasks (for example, visualization).

To highlight just a few examples, we are already seeing gen AI technologies handle some simple tasks, such as basic coding and syntax, code documentation, and certain web and graphic design tasks. Initial progress is also being made with more complex functions, including generating test cases and backlogs, developing insights from market trends, automating log scraping, and estimating and resolving the impact of bugs.

Any engineering talent rethink needs to begin with an understanding of how gen AI will affect the product development life cycle.

Over time, gen AI should be able to generate insights from automatically created tests, system logs, user feedback, and performance data. Gen AI can use self-created insights and ideas for new features to create proofs of concept and prototypes, as well as to reduce the cost of testing and unlock higher verification confidence (for example, multiple hypotheses and A/B testing). These developments are expected to significantly reduce PDLC times from months to weeks or even days, improve code quality, and reduce technical debt .

New skills for a new age

While many leaders understand at a high level that new skills are required to work with gen AI, their sense of how these changes might create value is often vague and underinformed. So the decisions that seem bold on paper—such as buying hundreds of gen AI tool licenses for developers—are made without a clear understanding of the potential gains and with insufficient training of developers. The result: predictably poor outcomes.

Important roles throughout the enterprise—from data scientists and experience designers to cyber experts and customer service agents—will need to learn an array of new skills . 4 For more, see Eric Lamarre, Alex Singla, Alexander Sukharevsky, and Rodney Zemmel, “ A generative AI reset: Rewiring to turn potential into value in 2024 ,” McKinsey Quarterly , March 4, 2024. Businesses hoping to operate like software companies will also need to pay special attention to two key roles: the engineer and the product manager.

The skills engineers need to develop will likely fall into three areas:

• Review. A significant percentage of code generated by the current generation of gen AI tools needs some correction. At one level, this requires developers to shift from doer to reviewer, which is not as basic as it sounds. Some proficient coders aren’t good reviewers. Good reviewers must be able to evaluate code-based compatibility with existing code repositories and architectures, for example, and understand what is required so another team can easily maintain the code—skills that more experienced engineers often have but more junior colleagues need to build. Developers will need to not just spot duplicates or obvious errors but ensure high-quality code by developing advanced forensics skills to identify and address issues. Even more complex will be the “training up” of gen AI tools, which have to learn on the job to get better. This will require engineers to understand how to give tools feedback and determine which sorts of tasks provide the best opportunity for a given tool to learn.
• Connect. Integrating the capabilities of multiple AI agents can improve problem-solving speed and solution quality. Some organizations are already integrating gen AI with applied AI use cases, such as using applied AI systems to analyze the performance of gen-AI-created content by identifying patterns in user engagement, which are then fed back to the model. 5 McKinsey Technology Trends Outlook 2024 , July 16, 2024. For example, Recursion, a biotech company, has developed a new gen AI platform that enables scientists to access multiple machine learning models that can process large amounts of proprietary biological and chemical data sets. A critical skill that engineers must develop is how to select and combine gen AI applications and models (for example, how one model might be good at providing quality control for another specific model).
• Design. As gen AI technology takes over more of the basic coding tasks, engineers can develop a new set of higher-value “upstream skills” such as writing user stories, developing code frameworks (for instance, code libraries, support programs), understanding business outcomes, and anticipating user intent. Communication is a critical emerging skill, and it’s needed to ensure that engineers can more effectively engage with teams, leaders, peers, and customers.

Product managers

For product managers , their equally complex skills shift will focus on the following areas:

• Gen AI technology use. Like software engineers, PMs will need to develop new skills to work effectively with gen AI technologies. One hardware/software organization, in fact, assessed the skills of its tech employees and found that PMs needed just as much upskilling on AI as any other role did. As gen AI becomes better at building prototypes, for example, PMs will need to be proficient with low-code and no-code tools and iterative prompts to work with models to refine outputs. PMs will also need to become proficient in understanding and developing “agentic” frameworks—large language models (LLMs) that work together to complete a task. This will require PMs to develop plans for working with these LLMs, taking into account unique considerations, such as the costs incurred when models run inferences.
• Adoption and trust. Given significant concerns regarding trust—either not trusting gen AI or trusting it too much—standard adoption programs (for example, basic training on how to use a new tool) aren’t sufficient. PMs must develop strong empathy skills to identify implicit and explicit barriers to trust (such as not trusting the answers that gen AI solutions provide) and to address them. Significant concerns about risk mean PMs will need to work with risk experts to ensure the right checks and measures are incorporated  into every stage of the PDLC.

Emerging—and merging—roles, with more leadership oversight

The new skills needed to use gen AI will affect how and what people do in their jobs, raising significant questions about how roles need to adapt and what oversight leadership must provide.

Emerging and merging roles

With gen AI helping people be more productive, it’s tempting to think that software teams will become smaller. That may prove true, but it may also make sense to maintain or enlarge teams to do more work. Too often, conversations focus on which roles are in or out, while the reality is likely to be more nuanced and messy. We can expect roles to absorb new responsibilities—such as software engineers using gen AI tools to take on testing activities—and for some roles to merge with others. The product manager and developer role, for example, could eventually merge into a product developer, in which one high-performing person can use an array of gen AI tools to create mock-ups, develop requirements, and generate code based on those requirements.

Too often, conversations focus on which roles are in or out, while the reality is likely to be more nuanced and messy.

Given the unproven and unpredictable nature of gen AI over the short term, new roles will be needed, such as one that focuses on AI safety and data responsibility and that also reviews and approves code. Other areas of significant scope that could require new roles may include LLM selection and management, gen AI agent training and management, third-party model liability, and LLM operations (LLMOps) capabilities to oversee model performance over time.

We anticipate that changes in the tech skills landscape will accelerate, requiring HR and tech teams to become much more responsive in defining (and redefining) how skills are bundled into roles.

Strong oversight

Determining what skills matter to the business and its strategy is a long-standing leadership responsibility. The unique uncertainties and opportunities associated with gen AI, however, require special leadership focus. Two areas stand out as particularly important:

• Standardization. As groups and individuals roll out gen AI pilots, a proliferation of tools, platforms, and architectures emerges. Instead, companies should focus on a single set of standardized capabilities and develop consistency regarding the types of skills needed. Leadership will need to standardize the gen AI tools, models, processes, and approaches, and determine, for example, whether it’s best to license a capability, build it, or partner with a provider  (largely driven by what skills are available within the business).
• Risk. The abiding concerns about the risks related to gen AI  require leadership to develop clear guidelines and expectations for employees. While software talent can’t be expected to become deep risk experts, they can be expected to develop basic skills, such as understanding what kinds of risk exist, developing the habit of integrating safeguards into their code, and knowing how to use emerging testing tools (for example, SonarQube, Checkmarx, or Coverty). Some organizations are also putting in place incentives for frontline users to understand the opportunities, risks, and boundaries of gen AI, and are even making certain kinds of training mandatory. As risk and compliance concerns are likely to shift as quickly as gen AI itself, leadership should invest in tools to automatically test code against designated policies (that is, policy as code).

Talent management transformation built around skills

Current approaches to talent management tend to focus on how to integrate gen AI into existing programs. That will not work for long. The highly structured nature of HR systems in modern companies—tightly drawn roles with well-defined competencies, well-worn career paths, fixed compensation levels, and formal learning journeys—has already struggled to keep up with changes driven by digital capabilities. It is no match for the more volatile and unpredictable dynamics of gen AI.

HR leaders, working with CEOs and tech leadership, must instead transform how they find and nurture talent , with a focus on two areas in particular: strategic workforce planning and apprenticeship capabilities.

Grounding strategic workforce planning in business needs and skills

The talent transformation starts with HR leaders developing a strategic workforce plan that’s built around skills. Companies often focus on roles during workforce planning, but that’s insufficient. Identifying the need for a software engineer or senior data engineer role, for example, isn’t useful with gen AI tools taking over tasks, not roles.

HR leaders can’t do this in a vacuum. They need to work with leaders in the business to understand goals—such as innovation, customer experience, and productivity—to help focus talent efforts. With this in hand, they can map out future talent demands.

This collaboration is critical for developing an inventory of skills, which provides companies with a fact base that allows them to evaluate what skills they have, which ones they need, and which ones gen AI tools can cover. This skills classification should use clear and consistent language (so it can be applied across the enterprise), capture expertise levels, and be organized around hierarchies to more easily organize the information.

The talent transformation starts with HR leaders developing a strategic workforce plan that’s built around skills.

To be useful, however, companies should treat skills as data rather than a document. By adding skills with relevant tags (for example, expertise levels) to a database, companies can use AI and LLMs to determine relationships and connections between skills for reskilling, prioritize which skills to develop, enable workforce planning to determine specific skill needs by program or team, and develop tailored learning programs.

One example includes a life sciences company that is working to use an AI skills inferencing tool to create a comprehensive skills view of their digital talent. The tool scans vacancies, role descriptions, HR data about roles, LinkedIn profiles, and other internal platforms (for example, Jira, code repositories) to develop a view on what skills are needed for given roles. The relevant individual employee can then review and confirm whether they have those skills and proficiencies. Once confirmed, those skills are added not only to the individuals’ profiles but also to the company’s skills database for future assessments.

For this approach to strategic workforce planning to be effective, companies have to continually measure progress against their identified skill gaps and revisit the strategy to determine if other needs have emerged, especially as new gen AI tools and capabilities come online. HR teams will have to work with engineering leaders to evaluate tools and understand the skills that they can replace, and what new training is needed.

Building up apprenticeship capabilities as part of a broader talent program

There is no single path to victory in finding and keeping the talent a company needs. Our experience shows that companies need to implement a range of talent strategies , from more customer-centered hiring practices to tailored training pathways. But because gen AI moves quickly and there is little clarity about which skills will be needed, upskilling will need to be front and center. Among the challenges in developing upskilling programs are the lack of codified best practices and workers’ potential resistance to learning new skills. While an engineer, for example, may be interested in becoming more proficient in coding, the need to learn different kinds of skills—such as effective communication or user story development—can seem less important or even threatening.

For this reason, companies should pay particular attention to apprentice models, which tend to be overlooked as part of a business’s upskilling repertoire. Apprenticing offers hands-on learning to demystify change and role modeling to demonstrate hard-to-teach skills, such as problem-solving mindsets and how to use good judgment in evaluating code suitability. But for apprenticing to be effective, senior experts must be active participants rather than just checking a box. They have the credibility and often institutional knowledge that can be useful, such as navigating risk issues specific to the company. Experts will need to code and review code with junior colleagues, shadow them as they work, and set up go-and-see visits so they can discover how teams work with gen AI. They can also act as mentors to coach new skills, such as how to break problems down, deliver business goals, understand end user needs and pain points, and ask relevant questions.

To ensure that apprenticeship programs succeed, companies should create incentives by making apprenticing part of performance evaluations and provide sufficient time for people to participate. One audio company, in fact, has made apprenticeship an explicit part of its learning program. It ran a boot camp covering gen AI skills for about a dozen top-performing engineers who volunteered for the program. In return for this training, participants were required to train others. Each agreed to lead a three- to four-day boot camp for ten to 15 engineers, followed by two sessions per week for three months, in which anyone could ask questions and share their own learnings.

While gen AI’s capabilities will eventually become more stable and proven, in the short term, companies will need to navigate a great deal of uncertainty. By zeroing in on skills and adapting their talent management approaches, and by being flexible enough to learn and adjust, companies can turn their talent challenges into competitive advantages.

We are celebrating the 60th birthday of the McKinsey Quarterly with a yearlong campaign featuring four issues on major themes related to the future of business and society, as well as related interactives, collections from the magazine’s archives, and more. This article will appear in the first themed issue, on the Future of Technology, which will launch in October. Sign up for the McKinsey Quarterly alert list to be notified as soon as other new Quarterly articles are published.

Alharith Hussin is a partner in McKinsey’s Bay Area office, where Martin Harrysson is a senior partner; Anna Wiesinger is a partner in the Düsseldorf office; Charlotte Relyea is a senior partner in the New York office; Suman Thareja is a partner in the New Jersey office; Prakhar Dixit is an associate partner in the Seattle office; and Thao Dürschlag is an associate partner in the Munich office.

The authors wish to thank Kiera Jones and Sven Blumberg for their contributions to this article.

This article was edited by Barr Seitz, an editorial director in the New York office.

Explore a career with us

Related articles.

Every company is a software company: Six ‘must dos’ to succeed

The state of AI in early 2024: Gen AI adoption spikes and starts to generate value

How generative AI could accelerate software product time to market