Misalignment in the 7-S Framework

A powerful tool developed for understanding and diagnosing an organization is the "7-S Framework". The model was originally developed by McKinsey & Company and now includes the following seven key elements: Strategy, Structure, Systems, Shared Values, Style, Staff, and Skills.

Businesses have problems when their 7-S's are not properly aligned. I recently had an opportunity to observe the difficulties caused by such a misalignment within an organization.

I came into contact with an action sport clothing company that couldn't determine why they were having difficulty growing. I observed that they had a lot of great aspects within their organization including skills, structure, systems, staff and style; however, as I spoke with different individuals within the organization, I noticed they lacked consistency between their strategy and shared values.

The shared values were seemingly non-existent within the company. Shared values are the "essential and enduring guiding principles and tenets that don't require justification, and that the company would keep even if business circumstances change."1 For the salespeople, it seemed that the end justified the means. In other words, as long as a retail sale was acquired, it was not important the manner in which it was achieved. Furthermore, the "sponsored" individuals had no idea for what the company stood and could not articulate what duty they owed to the company.

A big reason the shared values lacked was due to an unclear strategy for the company. A "strategy must address the question of how the business intends to distinguish itself from other competitors; or how the business will develop a sustainable advantage..."2 Management openly communicated to me that they were waiting to formally develop a strategy until they found their niche or "something that called their attention." My fear is that nothing will catch their attention until they find themselves in the "out-of-business" niche.

The lack of strategy has evidently created a misalignment that has translated into what was expressed to me as incongruent shared values among both employees and principals. My recommendation to this fledgling company is that they develop a strategy consistent with the competencies I observed in their S's of skills, staff, style, structure and systems. Since they do not share any uniform shared values they will need to keep desired values in mind as they establish their strategy. Only once the strategy is determinced can they effectively approach communicating what they feel are the shared values within the organization and move forward in achieving their desired growth goals.

1. "A Leader's Guide to Understanding Complex Organizations: An Expanded "7-S" Perspective," University of Virginia Darden School Foundation, 1998, by Jack Weber, p. 7.
2. Weber, p. 9.