The 7-S framework of McKinsey is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company.

The 3Ss across the top of the model are described as 'Hard Ss':

Strategy

The direction and scope of the company over the long term. Plans for the allocation of a firms scarce resources, over time, to reach identified goals.

Structure

The basic organization of the company, its departments, reporting lines, areas of expertise, and responsibility (and how they inter-relate). The way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc.

Systems

Formal and informal procedures that govern everyday activity, covering everything from management information systems, through to the systems at the point of contact with the customer (retail systems, call centre systems, online systems, etc).

The procedures and routines that characterize how important work is to be done: financial systems; hiring, promotion and performance appraisal systems; information systems.

The 4Ss across the bottom of the model are less tangible, more cultural in nature, and were termed 'Soft Ss' by McKinsey:

Skills

The capabilities and competencies that exist within the company. What it does best. Distinctive capabilities of personnel or of the organization as a whole.

Shared Values

The values and beliefs of the company. Ultimately they guide employees towards 'valued' behavior. The interconnecting center of McKinsey's model is: Value. What does the organization stands for and what it believes in.

Staff

The company's people resources and how they are developed, trained, and motivated. Numbers and types of personnel within the organization. 

Style

The leadership approach of top management and the company's overall operating approach. Cultural style of the organization and how key managers behave in achieving the organization’s goals.

Related Links

Mckinsey