Take a Holistic View to Strategic Planning
One of the most important things I have learned about the Strategic Planning process is how it can impact ALL areas of the organization. This is more that a top group think tank exercise. It will truly impact every area of the organization. One of the trailblazers of the understanding this interrelationship was the consulting firm of McKinsey.
They promoted and used a model referred to as the Seven S model of organizational effectiveness. Within this model, they determined there were no hierarchical boundaries – meaning each S was equal in need and priority – and as an organization you could rarely work on one area without impacting another. In fact, all seven S’s work together to create your effectiveness as an organization and as a leader, you must be prepared to work on all seven areas or elements to be successful in today’s competitive environment.
So what are the Seven S’s of this model? Here is the list of the seven, remember there is no one element with a priority over the other…
- Strategy – Uncovers what the company is trying to do as an organization to gain a competitive advantage. The game of Strategy is evolving rapidly due to the dynamics of the global economy with the rapid response times to change and development. It is more difficult today to develop a strategy with any length of time involved. The days of the 10 year or 5 year plans are limited to certain markets or conditions.
- Structure – This was related to the classic organizational structures which were created to support the long term vision of the organization. Today, the authority relationships of the old structures have given way to a more dynamic organizational structure that ebbs and flows with priorities and economic stimuli. It is becoming increasing complex to develop structure due to the dynamics of the business environments.
- Style – This covers two important areas of the organization – Leadership Style and Culture. They are somewhat related due to my belief that leaders are responsible for the development of the culture and their leadership style will impact the culture. Yet, culture is all about the way we do things within the organization and are usually the informal structure of the organization. Leadership Style has a major influence upon the development of a high performance culture or some other type of business culture.
- Staff – This is the part I really like – it’s all about the People or the intrinsic talent of the organization. What is the level of talent within the organization? The better the staff, the more willingness to tackle the complex issues confronting today’s organization. The question becomes – how well have you selected and promoted the talent within your organization? The answer will show in the marketplace.
- Systems – While technology and equipment is part of the equation, it is really about knowing the processes of the company. Systems define how work is done within your organization. Again, the main question is – What are you doing to define your processes and then improve your processes. The key requirement is to continuously look for ways to improve your systems and processes.
- Skills – Some feel that skills is only about the individual skills within the organization. It really goes much farther and includes the institutional skills or the aggregate level of skills within the organization. In some organizations there is a high need for specialized skills for their competitive advantage to work properly. From a higher level decision need, unique or specialized skill sets must be acquired for the organization. This could impact how you hire, where you hire, and who or when acquisitions make economic sense.
- Shared Values – the backbone of the entire seven or the super-ordinate goal for the organization. It is closely related to the reputation of the organization or another way of the thinking about it – what legacy do you want to leave behind? A new factor has rapidly taken its position in this element – social missions. Rather being a Green company or an Ethical company are all involved in this S element. (An example of this factor is Apple, Inc.’s recent resignation from the Chamber of Commerce due to the Chamber’s poor track record on supporting the Green social point of view)
There you have an overview of the McKinsey Seven S’s model of organizational effectiveness. Yet, it is an important model for leadership to understand and embrace in the running of their organization. You must be willing to cover all seven areas in your planning and execution relative to your organization’s performance. If you neglect any area listed you will have performance issues. Use the model to understand how your organization operates and wins in your market.
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