strategic problem solving model mckinsey

To defend against disruption, build a thriving workforce

Nonstop disruption. We have all lived through it the past several years: a global pandemic, geopolitical and economic instability, and the rise of new technologies such as generative AI (gen AI). This increasing pace of change, coupled with the anxiety of prolonged uncertainty, has created a situation in which companies can’t afford to keep doing business as usual. Indeed, workers have sent a clear message that they are disengaged to varying degrees and often burned out . They continue to question where , how , and why  they work.

About the authors

This article is a collaborative effort by Jacqueline Brassey , Aaron De Smet , Emily Field , Taylor Lauricella, and Brooke Weddle , representing views from the McKinsey Health Institute and McKinsey’s People & Organizational Performance Practice.

Automation and analytics broadly—and gen AI specifically—may be extremely helpful tools for addressing productivity challenges , not to mention the energy transition and climate change. However, if it’s not managed properly, the very adoption of gen AI  as a new way of working could burn people out even more, accelerating the downward spiral.

Recent McKinsey research reveals that both technical and nontechnical heavy users of gen AI are increasingly likely to leave their jobs  because of burnout. Those who aren’t burned out, however, told us they have remained in their jobs because they have real flexibility that suits their personal needs and work preferences, they do meaningful work that gives them energy, and they have support at work for their health and well-being (including mental and emotional health). Organizations would be wise to take note of these worker preferences since the need for gen AI talent is expected to grow rapidly.

But leaders should also consider the big picture. If gen AI can now take care of rote tasks and even complement some complex knowledge work, the nature of work is poised to change for millions of people, not just tech workers. Employees across industries and roles can be freed up or redeployed to focus on work that involves judgment, innovation, creativity, and collaboration—work that is more human .

Because this higher-level cognitive work is harder to plan for and manage, it requires much more than the absence of burnout. 1 Ruma Bhargava and Jacqueline Brassey, “Prioritizing the health of female employees is a strategic imperative. Here are 4 ways to do it,” World Economic Forum, March 8, 2024. It demands a culture of thriving, in which the promise of innovation and technology, used correctly, inspires people to be more creative in their problem-solving. That can then benefit overall performance.

To build a thriving workplace, leaders must reimagine work, the workplace, and the worker. That means shifting away from viewing employees as cogs who hit their deliverables then turn back into real human beings after the day is done. Employees are now more like elite artists or athletes who are inspired to produce at the highest levels but need adequate time to recharge and recover . The outcome is exceptional; the path to getting there is unique.

In this article, we delve into what a thriving culture is (and what it isn’t) and offer five actions organizations can take to maximize healthy work environments, team effectiveness, and employee well-being  so that more workers can reach their peak performance.

Diving into thriving: The skills that are most important now

A recent McKinsey survey of a global sample of workers found that only about 4 percent in a typical organization reported high levels of sustainable engagement and productivity that in turn brought disproportionate value to a company . 2 Aaron De Smet, Marino Mugayar-Baldocchi, Angelika Reich, and Bill Schaninger, “Some employees are destroying value. Others are building it. Do you know the difference?,” McKinsey Quarterly , September 11, 2023. We call these individuals “thriving stars” (Exhibit 1).

Thriving is more than being happy at work or the opposite of being burned out. Rather, one of the cornerstones of thriving is the idea of positive functioning: a holistic way of being, in which people find a purposeful equilibrium between their physical, mental, social, and spiritual health . Thriving is a state that applies across talent categories, from educators and healthcare specialists to data engineers and retail associates.

As gen AI becomes more prevalent in more jobs, the impact from thriving employees has the potential to grow. These are workers who can demonstrate higher-level cognitive and social–emotional skills to be at their collaborative, creative best each day. In fact, the recent McKinsey survey of gen AI talent shows that heavy users and creators feel they need to build these cognitive and social–emotional skills more than technological skills to do their jobs.

McKinsey research has found that thriving stars achieve high levels of sustained performance because of multiple factors: they are adaptable and resilient, they have found meaning and purpose at work, they achieve work–life balance and flexibility, and they experience psychological safety and trust from leaders, allowing them to create the same for their own teams.

The analysis also revealed that these employees flourish in an environment where autonomy and flexibility are valued by the organization. This indicates that many traditional practices and policies that companies use today may not create a thriving workforce at scale. These traditional practices include measuring productivity by inputs, outputs, and activities rather than by supporting outcomes and results; mandating in-person time; and focusing interventions on corrective action instead of on accelerating performance.

If two computer programmers, for example, are working to develop a creative new-user feature, how helpful is it to measure lines of code written, keystrokes logged, or hours worked? Does it matter if the code was written in the office or at home? If one coder writes 10,000 lines of code and another writes 1,000, which new-user feature is better? The answer has to do with the outcome, not the activity. If users prefer the 1,000-line code because it is simpler and more elegant, that is the better work product—even if it was written in one-tenth of the time.

The assembly-line approach has largely inspired modern-day management and current work policies (the 40-hour workweek is a prime example). Under this model, the organization monitors the programmers’ keystrokes or lines of written code to quantify activities, not necessarily outcomes or impact. Because the work is standardized, the biggest red flag for these workers would be not working enough hours or not producing enough code.

The organization that follows this assembly-line model would want the programmers to do the coding themselves, with no help from AI. It may even want the programmers to complete the coding in their cubicles, not at home. On a workforce level, employees in this model need to be engaged enough, to put in the hours without getting burned out, and to make enough high-quality code each hour to recover from setbacks and power through. This way, they can achieve efficiency and productivity.

If the organization instead takes an artist or athlete approach, it understands not only that people need to be at their very best to be effective but also that the path is different for everyone. As long as there is accountability for timelines and quality of work, the outcome is what matters. If a programmer used AI to do some of the coding and fine-tuned the rest but the result is a more user-friendly product, that would be celebrated. Under this approach, employees are pushed to be innovative, creative, and collaborative; the organization supports their use of the resources available to generate the best output (Exhibit 2).

We believe that the work for humans is departing further from the assembly-line model and getting closer to the artist or athlete framework. In this way of thinking, companies should not be afraid of letting people experiment with chatbot services or other gen AI tools, if those tools help workers perform their jobs better. They should realize that gen AI has the power to enhance human creativity (while also acknowledging the need for intellectual property protections) but not to replace it.

Take the movie Barbie as an example. If Hollywood had asked a chatbot to create a film based on the iconic doll, there’s very little chance it would have come up with the movie about feminist empowerment directed by Greta Gerwig. Leaders should create an environment that allows more employees to thrive like Gerwig.

The work environment gets a makeover

While the scarcity of high performers is an age-old organizational problem, today it takes on new urgency. As more work requires higher cognitive and social–emotional skills, it also requires people who are up to the challenge. To find and retain these employees, organizations should view them as both leaders and full human beings , leaning into the artist or athlete analogy as a guide to the multiple factors that bring about stellar performance.

In this workplace, people at every level are capable of being potential thought leaders who have influence through the right training, support, and guidance. They don’t have to be just “doers” who simply implement what others tell them to. All employees can learn to lead themselves, others, and the business (even if they themselves are not managers). Soon, as many begin to manage AI, they may need to judge which work to delegate to AI, how to assign it, what criteria to use, and how to supervise it. And they may, at times, need to intervene to correct it.

This sort of thriving organization also welcomes employees who bring their full selves to work, knowing that demonstrating authenticity, vulnerability, and other emotions has real benefits and that enhancing psychological safety at work  can lead to better decision making and performance. In Right Kind of Wrong: The Science of Failing Well (Atria/One Signal Publishers, September 2023), professor Amy Edmondson of Harvard Business School writes about how organizations can embrace human fallibility while learning from (and even preventing) failure.

While this work environment sounds great in theory, how does it become reality? To build a thriving culture, companies can rethink policies, practices, and rituals through five actions.

Rewrite the rules on workforce flexibility

Many organizations have made strides when it comes to offering workforce flexibility since the pandemic forced new rules upon much of the business world . Even so, leaders can look for more ways to infuse thoughtful flexibility into the workweek beyond work-from-home and hybrid options.

At the company level, one of the most cutting-edge changes regarding flexibility has involved piloting a four-day workweek. While that is a step in the right direction, it’s not enough. If we think about elite artists and athletes, they don’t have the confines of a four- or five-day week (some even work up to seven days a week). But they do rely on designated times to recover and recharge. Whereas some companies have identified core hours when all employees are expected to be online, we believe there is an opportunity to implement core days—that is, designating a certain number of days or specific days during the week when employees are expected to be online, with flexibility on “off days” to finalize work.

At a function or team level, rather than mandating in-office days, the expectation can be based on the degree of coordination and interdependence of work, or “teaminess.” Some groups may have a greater degree of teaminess, while other teams and functions may have more defined swim lanes and clearer handoffs.

When the function involves more teaminess, the expectation should be more in-person or overlapping core hours. However, just because it’s Tuesday and an employee’s team is in the office doesn’t mean the employee has to be there—especially if there are team video calls throughout the day. Leaders can strive for a more thoughtful collaboration model (more on that below).

On an individual level, employees should be encouraged to optimize for their particular rhythms outside of core team hours. We all know morning and night people, 3 Jeff Haden, “Are you a night owl trying to be a morning person? Science says you may (literally) be killing yourself,” Inc. , August 12, 2022. as well as colleagues who do their best work alone and those who become their most creative selves in a team setting. Some may complete their duties over three long days, while others may stretch the work out in smaller increments over seven days, setting aside time on quiet weekends to get some focused work in.

It’s hard for many leaders and managers to let go of the assembly-line approach to working hours in the office. After all, this has been the norm for nearly a century, since the 40-hour workweek was first adopted by the Ford Motor Company in 1926. But those who embrace a fluid-flexibility model will be responding to what employees across industries and jobs say they need to feel engaged  and to thrive.

Rethink the collaboration model

As routine tasks are increasingly automated, the remaining work becomes more complex, dynamic, and creative and therefore requires higher levels of innovation and collaboration. In turn, effective team dynamics become even more essential within and across teams. The best collaborative models augment thriving by creating a team environment that offers clarity in three areas: the problem the team is trying to solve, how the team knows when it’s successful, and how to work together to get there.

What problem are we trying to solve? Teams must understand the strategic context, problem statement, what’s in and out of scope, and the from–to aspiration at the start of each project. As the work becomes more complex and requires more innovative solutions, solving for each of those elements becomes increasingly less straightforward.

How will we know when we’re successful? As teams scope out the work, they should clearly define what the ultimate impact is from the project, as well as the leading indicators they can track along the way. In today’s environment, we’re more likely to see that the ultimate impact tends to be holistic in nature, affecting teams, customers, stakeholders, and society. The impact for a social media influencer, for example, may be whether a video goes viral, rather than the time frame needed to create that video. If an expected outcome isn’t materializing, the team should rapidly diagnose the problem and shift to different measures of progress.

How do we create sustainable team practices? It’s hard to thrive at work if one’s working preferences aren’t taken into consideration. Teams, especially cross-functional ones, need to feel their own sense of agency as they work together. They must jointly identify and synthesize work preferences to make the most of their time together. Do people, for instance, want to communicate through calls, emails, texts, or a communication app? Should cameras be on or off during online meetings? Are travel and locating close together crucial to achieving team goals? What type of work energizes or drains each team member? A rapid cadence of pulse checks on deliverables is crucial. Feedback is important, too, and not just during a postmortem, when the team discusses what worked well and what could have been done better. People should be empowered to continually offer their constructive feedback about what could be done differently.

Emphasize performance coaching

Just as agreed-upon norms and practices allow teams to thrive, so do clear expectations for individual employees. Those include guidance on how the outcome of their work is measured. A strong performance management system sets accountability metrics that are consistent and equitable.

Employees should have stretch goals they can work toward with clear, quantifiable, objective, and holistic metrics that show whether they are meeting those expectations. If 80 to 90 percent of the workforce is meeting performance expectations, these goals are probably too easy.

Athletes and artists can’t reach their performance goals without continuous feedback and training. A coach wouldn’t wait for the World Cup to manage performance, and a painter’s agent wouldn’t wait until just before a gallery opening to provide feedback on a new body of work. In the same vein, employees shouldn’t have to wait until the end of the year to know how they’re doing. Specific, continuous feedback helps people who are not meeting the bar to meet it, those who are meeting it to exceed it, and those who exceed it as thriving stars to also accelerate their ability to be future leaders.

Even the highest performers should continue to learn and grow through feedback and coaching. Athletes are instructive here as well. They may have a personal coach, a personal trainer, a nutritionist, and others to help them perform at their best. Often, the best athletes in the most important positions get the most coaching.

By contrast, in a corporate setting, an executive coach may be seen as a corrective. Leaders often spend more time coaching the lowest performers than they do the top performers, for example. What if organizations put more energy and resources into coaching and feedback  for the highest performers in the most critical roles? Feedback is extremely valuable across all groups, from the C-suite to the edges of any organization.

Create opportunities to practice and train, not just to perform

At many workplaces, leaders don’t specify whether employees are in practice mode or performance mode. Think of a professional athlete practicing for a big game; the activities and drills are different from those on game day. In the same vein, employees can be in practice mode during certain meetings with their teams, and they can be in performance mode during, say, a board call or a steering committee meeting.

In practice mode, people can expand their comfort zones to be bolder, take more calculated risks, and be more innovative—all of which are critical to learning and professional development. When leaders offer an environment where employees feel safe to speak up, to disagree openly without repercussions, and to show up authentically, their teams are more likely to be productive, creative, and innovative.

Leaders can augment these positive effects by clarifying which opportunities are practice and which are performance so that employees can experiment (for instance, by trying a new analysis).

Outside of day-to-day opportunities to practice, training and capability building should be reimagined. Often, the focus is on creating an enjoyable and engaging experience that is highly recommended to others. However, if we look at artists and athletes, the best training is often grueling and demanding. It is predominantly focused on perfecting technical skill sets and building the right mindsets to achieve explicit goals, not a 98 percent recommendation rate.

Kick the meeting habit and build in time for recovery

To build thriving teams that can tackle problems effectively, it’s important to create the space for employees to think critically, get the work done, and have time to recover. Unfortunately, at many organizations, meeting requirements have become a roadblock to creativity and real productivity. How many meetings are employees in each week that they don’t need to be in ? Can information instead be passed along through quick interactions or an email?

Being in back-to-back meetings day after day can be draining—physically and emotionally. Some companies have implemented “no meeting” days on a monthly or quarterly basis. Many employees also add to their calendars microbreaks or time to block things out and focus. They use that time to go for a walk or even take a quick nap—whatever they need to disconnect, recharge, and recover. Building in these moments, small as they may seem, can reap big rewards. Recent McKinsey research on thriving indicates that globally, aligning employment with modifiable factors of health can not only lead to years of higher-quality life but also create trillions of dollars in economic value . 4 Jacqueline Brassey, Lars Hartenstein, Barbara Jeffery, and Patrick Simon, “ Working nine to thrive ,” McKinsey Health Institute, March 13, 2024.

In this postindustrial digital era, organizations must shift from rewarding traditional forms of productivity—time spent, output recorded—to recognizing impact and outcomes. Until recently, the steps required were slow and evolutionary for most companies. But now, with the pandemic and the advent of gen AI, this evolution can turn into a revolution that spurs employees and organizations alike to grow and thrive.

Jacqueline Brassey is a coleader of employee health at the McKinsey Health Institute and a senior fellow in McKinsey’s Luxembourg office, Aaron De Smet is a senior partner in the New Jersey office, Emily Field is a partner in the Seattle office, Taylor Lauricella is an associate partner in the New York office, and Brooke Weddle is a partner in the Washington, DC, office.

This article was edited by Barbara Tierney, a senior editor in the New York office.

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Mckinsey approach to problem solving, a guide to the 7-step mckinsey problem solving process.

McKinsey and Company is recognized for its rigorous approach to problem solving. They train their consultants on their seven-step process that anyone can learn.

This resource guides you through that process, largely informed by the McKinsey Staff Paper 66. It also includes a PowerPoint Toolkit with slide templates of each step of the process that you can download and customize for your own use.

In this guide you'll learn:

Overview of the mckinsey approach to problem solving, problem solving process.

• Problem Definition & Problem Statement Worksheet

Stakeholder Analysis Worksheet

Hypothesis trees, issue trees, analyses and workplan, synthesize findings, craft recommendations, distinctiveness practices, harness the power of collaboration, sources and additional reading, request the mckinsey approach to problem solving.

Problem solving — finding the optimal solution to a given business opportunity or challenge — is the very heart of how consultants create client impact, and considered the most important skill for success at McKinsey.

The characteristic “McKinsey method” of problem solving is a structured, inductive approach that can be used to solve any problem. Using this standardized process saves us from reinventing the problem-solving wheel, and allows for greater focus on distinctiveness in the solution. Every new McKinsey associate must learn this method on his or her first day with the firm.

There are four fundamental disciplines of the McKinsey method:

1. Problem definition

A thorough understanding and crisp definition of the problem.

2. The problem-solving process

Structuring the problem, prioritizing the issues, planning analyses, conducting analyses, synthesizing findings, and developing recommendations.

3. Distinctiveness practices

Constructing alternative perspectives; identifying relationships; distilling the essence of an issue, analysis, or recommendation; and staying ahead of others in the problem-solving process.

4. Collaboratio n

Actively seeking out client, customer, and supplier perspectives, as well as internal and external expert insight and knowledge.

Once the problem has been defined, the problem-solving process proceeds with a series of steps:

• Structure the problem
• Prioritize the issues
• Plan analyses
• Conduct analyses
• Synthesize findings
• Develop recommendations

Not all problems require strict adherence to the process. Some steps may be truncated, such as when specific knowledge or analogies from other industries make it possible to construct hypotheses and associated workplans earlier than their formal place in the process. Nonetheless, it remains important to be capable of executing every step in the basic process.

When confronted with a new and complex problem, this process establishes a path to defining and disaggregating the problem in a way that will allow the team to move to a solution. The process also ensures nothing is missed and concentrates efforts on the highest-impact areas. Adhering to the process gives the client clear steps to follow, building confidence, credibility, and long-term capability.

Problem Definition & Problem Statement Worksheet

The most important step in your entire project is to first carefully define the problem. The problem definition will serve the guide all of the team’s work, so it is critical to ensure that all key stakeholders agree that it is the right problem to be solving.

Problem Statement Worksheet

This is a helpful tool to use to clearly define the problem. There are often dozens of issues that a team could focus on, and it is often not obvious how to define the problem. In any real-life situation, there are many possible problem statements. Your choice of problem statement will serve to constrain the range of possible solutions.

• Use a question . The problem statement should be phrased as a question, such that the answer will be the solution. Make the question SMART: specific, measurable, action-oriented, relevant, and time-bound. Example: “How can XYZ Bank close the $100 million profitability gap in two years?”
• Context . What are the internal and external situations and complications facing the client, such as industry trends, relative position within the industry, capability gaps, financial flexibility, and so on?
• Success criteria . Understand how the client and the team define success and failure. In addition to any quantitative measures identified in the basic question, identify other important quantitative or qualitative measures of success, including timing of impact, visibility of improvement, client capability building required, necessary mindset shifts, and so on.
• Scope and constraints . Scope most commonly covers the markets or segments of interest, whereas constraints govern restrictions on the nature of solutions within those markets or segments.
• Stakeholders . Explore who really makes the decisions — who decides, who can help, and who can block.
• Key sources of insight . What best-practice expertise, knowledge, and engagement approaches already exist? What knowledge from the client, suppliers, and customers needs to be accessed? Be as specific as possible: who, what, when, how, and why.

The problem definition should not be vague, without clear measures of success. Rather, it should be a SMART definition:

• Action-oriented

Example situation – A family on Friday evening

Scenario: A mother, a father, and their two teenage children have all arrived home on a Friday at 6 p.m. The family has not prepared dinner for Friday evening. The daughter has lacrosse practice on Saturday and an essay to write for English class due on Monday. The son has theatre rehearsal on both Saturday and Sunday and will need one parent to drive him to the high school both days, though he can get a ride home with a friend. The family dog, a poodle, must be taken to the groomer on Saturday morning. The mother will need to spend time this weekend working on assignments for her finance class she is taking as part of her Executive MBA. The father plans to go on a 100-mile bike ride, which he can do either Saturday or Sunday. The family has two cars, but one is at the body shop. They are trying to save money to pay for an addition to their house.

What is the problem definition?

A statement of facts does not focus the problem solving:

It is 6 p.m. The family has not made plans for dinner, and they are hungry.

A question guides the team towards a solution:

1. What should the family do for dinner on Friday night?

2. Should the family cook dinner or order delivery?

3. What should the family cook for dinner?

4. What should the family cook for dinner that will not require spending more than $40 on groceries?

5. To cook dinner, what do they need to pick up from the supermarket?

6. How can the family prepare dinner within the next hour using ingredients they already have in the house?

In completing the Problem Statement Worksheet, you are prompted to define the key stakeholders.

As you become involved in the problem-solving process, you should expand the question of key stakeholders to include what the team wants from them and what they want from the team, their values and motivations (helpful and unhelpful), and the communications mechanisms that will be most effective for each of them.

Using the Stakeholder Analysis Worksheet allows you to comprehensively identify:

• Stakeholders
• What you need from them
• Where they are
• What they need from you

The two most helpful techniques for rigorously structuring any problem are hypothesis trees and issue trees. Each of these techniques disaggregates the primary question into a cascade of issues or hypotheses that, when addressed, will together answer the primary question.

A hypothesis tree might break down the same question into two or more hypotheses. 

Example: Alpha Manufacturing, Inc.

Problem Statement: How can Alpha increase EBITDA by $13M (to $50M) by 2025?

The hypotheses might be:

• Alpha can add $125M revenues by expanding to new customers, adding $8M of EBITDA
• Alpha can reduce costs to improve EBITDA by $5M

These hypotheses will be further disaggregated into subsidiary hypotheses at the next level of the tree.

The aim at this stage is to structure the problem into discrete, mutually exclusive pieces that are small enough to yield to analysis and that, taken together, are collectively exhaustive.

Articulating the problem as hypotheses, rather than issues, is the preferred approach because it leads to a more focused analysis of the problem. Questions to ask include:

• Is it testable – can you prove or disprove it?
• It is open to debate? If it cannot be wrong, it is simply a statement of fact and unlikely to produce keen insight.
• If you reversed your hypothesis – literally, hypothesized that the exact opposite were true – would you care about the difference it would make to your overall logic?
• If you shared your hypothesis with the CEO, would it sound naive or obvious?
• Does it point directly to an action or actions that the client might take?

Quickly developing a powerful hypothesis tree enables us to develop solutions more rapidly that will have real impact. This can sometimes seem premature to clients, who might find the “solution” reached too quickly and want to see the analysis behind it.

Take care to explain the approach (most important, that a hypothesis is not an answer) and its benefits (that a good hypothesis is the basis of a proven means of successful problem solving and avoids “boiling the ocean”).

Often, the team has insufficient knowledge to build a complete hypothesis tree at the start of an engagement. In these cases, it is best to begin by structuring the problem using an issue tree.

An issue tree is best set out as a series of open questions in sentence form. For example, “How can the client minimize its tax burden?” is more useful than “Tax.” Open questions – those that begin with what, how, or why– produce deeper insights than closed ones. In some cases, an issue tree can be sharpened by toggling between issue and hypothesis – working forward from an issue to identify the hypothesis, and back from the hypothesis to sharpen the relevant open question.

Once the problem has been structured, the next step is to prioritize the issues or hypotheses on which the team will focus its work. When prioritizing, it is common to use a two-by-two matrix – e.g., a matrix featuring “impact” and “ease of impact” as the two axes.

Applying some of these prioritization criteria will knock out portions of the issue tree altogether. Consider testing the issues against them all, albeit quickly, to help drive the prioritization process.

Once the criteria are defined, prioritizing should be straightforward: Simply map the issues to the framework and focus on those that score highest against the criteria.

As the team conducts analysis and learns more about the problem and the potential solution, make sure to revisit the prioritization matrix so as to remain focused on the highest-priority issues.

The issues might be:

• How can Alpha increase revenue?
• How can Alpha reduce cost?

Each of these issues is then further broken down into deeper insights to solutions.

If the prioritization has been carried out effectively, the team will have clarified the key issues or hypotheses that must be subjected to analysis. The aim of these analyses is to prove the hypotheses true or false, or to develop useful perspectives on each key issue. Now the task is to design an effective and efficient workplan for conducting the analyses.

Transforming the prioritized problem structure into a workplan involves two main tasks:

• Define the blocks of work that need to be undertaken. Articulate as clearly as possible the desired end products and the analysis necessary to produce them, and estimate the resources and time required.
• Sequence the work blocks in a way that matches the available resources to the need to deliver against key engagement milestones (e.g., important meetings, progress reviews), as well as to the overall pacing of the engagement (i.e., weekly or twice-weekly meetings, and so on).

A good workplan will detail the following for each issue or hypothesis: analyses, end products, sources, and timing and responsibility. Developing the workplan takes time; doing it well requires working through the definition of each element of the workplan in a rigorous and methodical fashion.

This is the most difficult element of the problem-solving process. After a period of being immersed in the details, it is crucial to step back and distinguish the important from the merely interesting. Distinctive problem solvers seek the essence of the story that will underpin a crisp recommendation for action.

Although synthesis appears, formally speaking, as the penultimate step in the process, it should happen throughout. Ideally, after you have made almost any analytical progress, you should attempt to articulate the “Day 1” or “Week 1” answer. Continue to synthesize as you go along. This will remind the team of the question you are trying to answer, assist prioritization, highlight the logical links of the emerging solution, and ensure that you have a story ready to articulate at all times during the study.

McKinsey’s primary tool for synthesizing is the pyramid principle. Essentially, this principle asserts that every synthesis should explain a single concept, per the “governing thought.” The supporting ideas in the synthesis form a thought hierarchy proceeding in a logical structure from the most detailed facts to the governing thought, ruthlessly excluding the interesting but irrelevant.

While this hierarchy can be laid out as a tree (like with issue and hypothesis trees), the best problem solvers capture it by creating dot-dash storylines — the Pyramid Structure for Grouping Arguments.

Pyramid Structure for Grouping Arguments

• Focus on action. Articulate the thoughts at each level of the pyramid as declarative sentences, not as topics. For example, “expansion” is a topic; “We need to expand into the European market” is a declarative sentence.
• Use storylines. PowerPoint is poor at highlighting logical connections, therefore is not a good tool for synthesis. A storyline will clarify elements that may be ambiguous in the PowerPoint presentation.
• Keep the emerging storyline visible. Many teams find that posting the storyline or story- board on the team-room wall helps keep the thinking focused. It also helps in bringing the client along.
• Use the situation-complication-resolution structure. The situation is the reason there is action to be taken. The com- plication is why the situation needs thinking through – typically an industry or client challenge. The resolution is the answer.
• Down the pyramid: does each governing thought pose a single question that is answered completely by the group of boxes below it?
• Across: is each level within the pyramid MECE?
• Up: does each group of boxes, taken together, provide one answer – one “so what?” – that is essentially the governing thought above it?
• Test the solution. What would it mean if your hypotheses all came true?

Three Horizons of Engagement Planning

It’s useful to match the workplan to three horizons:

• What is expected at the end of the engagement
• What is expected at key progress reviews
• What is due at daily and/or weekly team meetings

The detail in the workplan will typically be greater for the near term (the next week) than for the long term (the study horizon), especially early in a new engagement when considerable ambiguity about the end state remains.

It is at this point that we address the client’s questions: “What do I do, and how do I do it?” This means not offering actionable recommendations, along with a plan and client commitment for implementation.

The essence of this step is to translate the overall solution into the actions required to deliver sustained impact. A pragmatic action plan should include:

• Relevant initiatives, along with a clear sequence, timing, and mapping of activities required
• Clear owners for each initiative
• Key success factors and the challenges involved in delivering on the initiatives

Crucial questions to ask as you build recommendations for organizational change are:

• Does each person who needs to change (from the CEO to the front line) understand what he or she needs to change and why, and is he or she committed to it?
• Are key leaders and role models throughout the organization personally committed to behaving differently?
• Has the client set in place the necessary formal mechanisms to reinforce the desired change?
• Does the client have the skills and confidence to behave in the desired new way?

Great problem solvers identify unique disruptions and discontinuities, novel insights, and step-out opportunities that lead to truly distinctive impact. This is done by applying a number of practices throughout the problem-solving process to help develop these insights.

Expand: Construct multiple perspectives

Identifying alternative ways of looking at the problem expands the range of possibilities, opens you up to innovative ideas, and allows you to formulate more powerful hypotheses. Questions that help here include:

• What changes if I think from the perspective of a customer, or a supplier, or a frontline employee, or a competitor?
• How have other industries viewed and addressed this same problem?
• What would it mean if the client sought to run the company like a low-cost airline or a cosmetics manufacturer?

Link: Identify relationships

Strong problem solvers discern connections and recognize patterns in two different ways:

• They seek out the ways in which different problem elements – issues, hypotheses, analyses, work elements, findings, answers, and recommendations – relate to one another.
• They use these relationships throughout the basic problem-solving process to identify efficient problem-solving approaches, novel solutions, and more powerful syntheses.

Distill: Find the essence

Cutting through complexity to identify the heart of the problem and its solution is a critical skill.

• Identify the critical problem elements. Are there some issues, approaches, or options that can be eliminated completely because they won’t make a significant difference to the solution?
• Consider how complex the different elements are and how long it will take to complete them. Wherever possible, quickly advance simpler parts of the problem that can inform more complex or time-consuming elements.

Lead: Stay ahead/step back

Without getting ahead of the client, you cannot be distinctive. Paradoxically, to get ahead – and stay ahead – it is often necessary to step back from the problem to validate or revalidate the approach and the solution.

• Spend time thinking one or more steps ahead of the client and team.
• Constantly check and challenge the rigor of the underlying data and analysis.
• Stress-test the whole emerging recommendation
• Challenge the solution against a set of hurdles. Does it satisfy the criteria for success as set out on the Problem Statement Worksheet?

No matter how skilled, knowledgeable, or experienced you are, you will never create the most distinctive solution on your own. The best problem solvers know how to leverage the power of their team, clients, the Firm, and outside parties. Seeking the right expertise at the right time, and leveraging it in the right way, are ultimately how we bring distinctiveness to our work, how we maximize efficiency, and how we learn.

When solving a problem, it is important to ask, “Have I accessed all the sources of insight that are available?” Here are the sources you should consider:

• Your core team
• The client’s suppliers and customers
• Internal experts and knowledge
• External sources of knowledge
• Communications specialists

The key here is to think open, not closed. Opening up to varied sources of data and perspectives furthers our mission to develop truly innovative and distinctive solutions for our clients.

• McKinsey Staff Paper 66 — not published by McKinsey but possibly found through an internet search
• The McKinsey Way , 1999, by Ethan M. Rasiel

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McKinsey Problem Solving: Six steps to solve any problem and tell a persuasive story

The McKinsey problem solving process is a series of mindset shifts and structured approaches to thinking about and solving challenging problems. It is a useful approach for anyone working in the knowledge and information economy and needs to communicate ideas to other people.

Over the past several years of creating StrategyU, advising an undergraduates consulting group and running workshops for clients, I have found over and over again that the principles taught on this site and in this guide are a powerful way to improve the type of work and communication you do in a business setting.

When I first set out to teach these skills to the undergraduate consulting group at my alma mater, I was still working at BCG. I was spending my day building compelling presentations, yet was at a loss for how to teach these principles to the students I would talk with at night.

Through many rounds of iteration, I was able to land on a structured process and way of framing some of these principles such that people could immediately apply them to their work.

While the “official” McKinsey problem solving process is seven steps, I have outline my own spin on things – from experience at McKinsey and Boston Consulting Group. Here are six steps that will help you solve problems like a McKinsey Consultant:

Step #1: School is over, stop worrying about “what” to make and worry about the process, or the “how”

When I reflect back on my first role at McKinsey, I realize that my biggest challenge was unlearning everything I had learned over the previous 23 years. Throughout school you are asked to do specific things. For example, you are asked to write a 5 page paper on Benjamin Franklin — double spaced, 12 font and answering two or three specific questions.

In school, to be successful you follow these rules as close as you can. However, in consulting there are no rules on the “what.” Typically the problem you are asked to solve is ambiguous and complex — exactly why they hire you. In consulting, you are taught the rules around the “how” and have to then fill in the what.

The “how” can be taught and this entire site is founded on that belief. Here are some principles to get started:

Step #2: Thinking like a consultant requires a mindset shift

There are two pre-requisites to thinking like a consultant. Without these two traits you will struggle:

• A healthy obsession looking for a “better way” to do things
• Being open minded to shifting ideas and other approaches

In business school, I was sitting in one class when I noticed that all my classmates were doing the same thing — everyone was coming up with reasons why something should should not be done.

As I’ve spent more time working, I’ve realized this is a common phenomenon. The more you learn, the easier it becomes to come up with reasons to support the current state of affairs — likely driven by the status quo bias — an emotional state that favors not changing things. Even the best consultants will experience this emotion, but they are good at identifying it and pushing forward.

Key point : Creating an effective and persuasive consulting like presentation requires a comfort with uncertainty combined with a slightly delusional belief that you can figure anything out.

Step #3: Define the problem and make sure you are not solving a symptom

Before doing the work, time should be spent on defining the actual problem. Too often, people are solutions focused when they think about fixing something. Let’s say a company is struggling with profitability. Someone might define the problem as “we do not have enough growth.” This is jumping ahead to solutions — the goal may be to drive more growth, but this is not the actual issue. It is a symptom of a deeper problem.

Consider the following information:

• Costs have remained relatively constant and are actually below industry average so revenue must be the issue
• Revenue has been increasing, but at a slowing rate
• This company sells widgets and have had no slowdown on the number of units it has sold over the last five years
• However, the price per widget is actually below where it was five years ago
• There have been new entrants in the market in the last three years that have been backed by Venture Capital money and are aggressively pricing their products below costs

In a real-life project there will definitely be much more information and a team may take a full week coming up with a problem statement . Given the information above, we may come up with the following problem statement:

Problem Statement : The company is struggling to increase profitability due to decreasing prices driven by new entrants in the market. The company does not have a clear strategy to respond to the price pressure from competitors and lacks an overall product strategy to compete in this market.

Step 4: Dive in, make hypotheses and try to figure out how to “solve” the problem

Now the fun starts!

There are generally two approaches to thinking about information in a structured way and going back and forth between the two modes is what the consulting process is founded on.

First is top-down . This is what you should start with, especially for a newer “consultant.” This involves taking the problem statement and structuring an approach. This means developing multiple hypotheses — key questions you can either prove or disprove.

Given our problem statement, you may develop the following three hypotheses:

• Company X has room to improve its pricing strategy to increase profitability
• Company X can explore new market opportunities unlocked by new entrants
• Company X can explore new business models or operating models due to advances in technology

As you can see, these three statements identify different areas you can research and either prove or disprove. In a consulting team, you may have a “workstream leader” for each statement.

Once you establish the structure you you may shift to the second type of analysis: a bottom-up approach . This involves doing deep research around your problem statement, testing your hypotheses, running different analysis and continuing to ask more questions. As you do the analysis, you will begin to see different patterns that may unlock new questions, change your thinking or even confirm your existing hypotheses. You may need to tweak your hypotheses and structure as you learn new information.

A project vacillates many times between these two approaches. Here is a hypothetical timeline of a project:

Step 5: Make a slides like a consultant

The next step is taking the structure and research and turning it into a slide. When people see slides from McKinsey and BCG, they see something that is compelling and unique, but don’t really understand all the work that goes into those slides. Both companies have a healthy obsession (maybe not to some people!) with how things look, how things are structured and how they are presented.

They also don’t understand how much work is spent on telling a compelling “story.” The biggest mistake people make in the business world is mistaking showing a lot of information versus telling a compelling story. This is an easy mistake to make — especially if you are the one that did hours of analysis. It may seem important, but when it comes down to making a slide and a presentation, you end up deleting more information rather than adding. You really need to remember the following:

Data matters, but stories change hearts and minds

Here are four quick ways to improve your presentations:

Tip #1 — Format, format, format

Both McKinsey and BCG had style templates that were obsessively followed. Some key rules I like to follow:

• Make sure all text within your slide body is the same font size (harder than you would think)
• Do not go outside of the margins into the white space on the side
• All titles throughout the presentation should be 2 lines or less and stay the same font size
• Each slide should typically only make one strong point

Tip #2 — Titles are the takeaway

The title of the slide should be the key insight or takeaway and the slide area should prove the point. The below slide is an oversimplification of this:

Even in consulting, I found that people struggled with simplifying a message to one key theme per slide. If something is going to be presented live, the simpler the better. In reality, you are often giving someone presentations that they will read in depth and more information may make sense.

To go deeper, check out these 20 presentation and powerpoint tips .

Tip #3 — Have “MECE” Ideas for max persuasion

“MECE” means mutually exclusive, collectively exhaustive — meaning all points listed cover the entire range of ideas while also being unique and differentiated from each other.

An extreme example would be this:

• Slide title: There are seven continents
• Slide content: The seven continents are North America, South America, Europe, Africa Asia, Antarctica, Australia

The list of continents provides seven distinct points that when taken together are mutually exclusive and collectively exhaustive . The MECE principle is not perfect — it is more of an ideal to push your logic in the right direction. Use it to continually improve and refine your story.

Applying this to a profitability problem at the highest level would look like this:

Goal: Increase profitability

2nd level: We can increase revenue or decrease costs

3rd level: We can increase revenue by selling more or increasing prices

Each level is MECE. It is almost impossible to argue against any of this (unless you are willing to commit accounting fraud!).

Tip #4 — Leveraging the Pyramid Principle

The pyramid principle is an approach popularized by Barbara Minto and essential to the structured problem solving approach I learned at McKinsey. Learning this approach has changed the way I look at any presentation since.

Here is a rough outline of how you can think about the pyramid principle as a way to structure a presentation:

As you build a presentation, you may have three sections for each hypothesis. As you think about the overall story, the three hypothesis (and the supporting evidence) will build on each other as a “story” to answer the defined problem. There are two ways to think about doing this — using inductive or deductive reasoning:

If we go back to our profitability example from above, you would say that increasing profitability was the core issue we developed. Lets assume that through research we found that our three hypotheses were true. Given this, you may start to build a high level presentation around the following three points:

These three ideas not only are distinct but they also build on each other. Combined, they tell a story of what the company should do and how they should react. Each of these three “points” may be a separate section in the presentation followed by several pages of detailed analysis. There may also be a shorter executive summary version of 5–10 pages that gives the high level story without as much data and analysis.

Step 6: The only way to improve is to get feedback and continue to practice

Ultimately, this process is not something you will master overnight. I’ve been consulting, either working for a firm or on my own for more than 10 years and am still looking for ways to make better presentations, become more persuasive and get feedback on individual slides.

The process never ends.

The best way to improve fast is to be working on a great team . Look for people around you that do this well and ask them for feedback. The more feedback, the more iterations and more presentations you make, the better you will become. Good luck!

If you enjoyed this post, you’ll get a kick out of all the free lessons I’ve shared that go a bit deeper. Check them out here .

Do you have a toolkit for business problem solving? I created Think Like a Strategy Consultant as an online course to make the tools of strategy consultants accessible to driven professionals, executives, and consultants. This course teaches you how to synthesize information into compelling insights, structure your information in ways that help you solve problems, and develop presentations that resonate at the C-Level. Click here to learn more or if you are interested in getting started now, enroll in the self-paced version ($497) or hands-on coaching version ($997). Both versions include lifetime access and all future updates.

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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. 

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McKinsey 7-S Framework

Making every part of your organization work in harmony.

By the Mind Tools Content Team

Do you know how well your organization is positioned to achieve its goals? Or what elements influence its ability to implement change successfully?

Models of organizational effectiveness go in and out of fashion, but the McKinsey 7-S framework has stood the test of time.

The model was developed in the late 1970s by Tom Peters and Robert Waterman, former consultants at McKinsey & Company. They identified seven internal elements of an organization that need to align for it to be successful. [1]

In this article, we'll explore the seven elements in detail, and learn how it can be used to improve performance or manage change in organizations by ensuring that they all work in harmony.

Also, we provide a worked example and a downloadable template that you can use to apply the model.

When to Use the McKinsey 7-S Model

You can use the 7-S model in a wide variety of situations where it's useful to examine how the various parts of your organization work together.

For example, it can help you to improve the performance of your organization, or to determine the best way to implement a proposed strategy.

The framework can be used to examine the likely effects of future changes in the organization, or to align departments and processes during a merger or acquisition. You can also apply the McKinsey 7-S model to elements of a team or a project.

The Seven Elements of the McKinsey 7-S Framework

The model categorizes the seven elements as either "hard" or "soft":

The three "hard" elements include:

• Structures (such as organization charts and reporting lines).
• Systems (such as formal processes and IT systems.)

These elements are relatively easy to identify, and management can influence them directly.

The four "soft" elements, on the other hand, can be harder to describe, and are less tangible, and more influenced by your company culture. But they're just as important as the hard elements if the organization is going to be successful.

Figure 1, below, shows how the elements depend on each other, and how a change in one affects all the others.

Figure 1: The McKinsey 7-S Model

Figure reproduced with permission from McKinsey & Company, www.mckinsey.com. Copyright © 2016. All rights reserved.

Let's look at each of the elements individually:

• Strategy: this is your organization's plan for building and maintaining a competitive advantage over its competitors.
• Structure: this is how your company is organized (how departments and teams are structured, including who reports to whom).
• Systems: the daily activities and procedures that staff use to get the job done.
• Shared Values: these are the core values of the organization and reflect its general work ethic. They were called "superordinate goals" when the model was first developed.
• Style: the style of leadership adopted.
• Staff: the employees and their general capabilities.
• Skills: the actual skills and competencies of the organization's employees.

The placement of Shared Values in the center of the model emphasizes that they are central to the development of all the other critical elements.

The model states that the seven elements need to balance and reinforce each other for an organization to perform well.

Using the McKinsey 7-S Model

You can use the model to identify which elements of the 7-S' you need to realign to improve performance, or to maintain alignment and performance during other changes. These changes could include restructuring, new processes, an organizational merger, new systems, and a change of leadership.

To apply the McKinsey 7-S Model in your organization, follow these steps:

• Start with your shared values: are they consistent with your structure, strategy, and systems? If not, what needs to change?
• Then look at the hard elements – your strategy, structure and systems. How well does each one support the others? Identify where changes need to be made.
• Next, look at the soft elements – shared values, skills, (leadership) style, and staff. Do they support the desired hard elements? Do they support one another? If not, what needs to change?
• As you adjust and align the elements, you'll need to use an iterative (and often time-consuming) process of making adjustments, and then re-analyzing how that impacts other elements and their alignment. The end result of better performance will be worth it.

Figure 2 shows a template matrix that you can use to help with your analysis. You can click on the image to download it as a PDF worksheet.

We've also developed a checklist of the right questions to ask, which you can find in the next section. Supplement the questions in our checklist with your own questions, based on your organization's specific circumstances and your own knowledge and experience.

Figure 2: The McKinsey 7-S Matrix Template

You can use the 7-S model to help analyze your current situation (Point A in the worksheet), your proposed future situation (Point B in the worksheet), and to identify gaps and inconsistencies between them.

To examine where you are now (Point A), use the data that you've learned from your checklist questions to fill in the worksheet grid, putting a tick in any box where the two cross-referenced elements work together well. If the two elements aren't working well together, put a cross.

Point B is an agreed endpoint in the future (in six months or a year, for example). When you reach Point B, revisit the worksheet and fill it in again. If your changes have worked, you'll have a grid full of ticks. If not, you may need to make further adjustments.

The 7-S model is a good framework to help you ask the right questions, but it won't give you all the answers. For that, you'll need to bring together the right people with the right knowledge, skills and experience. Our article, Setting up a Cross-Functional Team , can help you to do this.

Checklist Questions for the McKinsey 7-S Framework

The following questions are a starting point for exploring your situation in terms of the 7-S framework. Use them to analyze your current situation (Point A) first, and then repeat the exercise for your proposed situation (Point B).

• What is our strategy?
• How do we intend to achieve our objectives?
• How do we deal with competitive pressure?
• How are changes in customer demands dealt with?
• How is strategy adjusted for environmental issues?
• How is the company/team divided?
• What is the hierarchy?
• How do the various departments coordinate activities?
• How do the team members organize and align themselves?
• Is decision-making centralized or decentralized? Is this as it should be, given what we're doing?
• Where are the lines of communication? Explicit or implicit?
• What are the main systems that run the organization? Consider financial and HR systems, as well as communications and document storage.
• Where are the controls and how are they monitored and evaluated?
• What internal rules and processes does the team use to keep on track?

Shared Values:

• What are your organization's core values?
• What is its corporate/team culture like?
• How strong are the values?
• What are the fundamental values that the company/team was built on?
• How participative is the management/leadership style?
• How effective is that leadership?
• Do employees/team members tend to be competitive or cooperative?
• Are there real teams functioning within the organization or are they just nominal groups?
• What positions or specializations are represented within the team?
• What positions need to be filled?
• Are there gaps in required competencies?
• What are the strongest skills represented within the company/team?
• Are there any skills gaps?
• What is the company/team known for doing well?
• Do the current employees/team members have the ability to do the job?
• How are skills monitored and assessed?

Example: The McKinsey 7-S Framework in Action

Whitehawk Electronics is a startup with five staff. As a new venture, it is still based firmly on the vision and values of its founder, Alix, and its elements all align. It sells into one market, and uses off-the-shelf IT and accounting systems.

As time goes on, the business grows, employing 30 staff, and diversifying into different markets. New customer requirements demand new skills in marketing, technology, product development, and financial management.

Alix carries out a 7-S analysis. She finds that Whitehawk's developing sales strategy no longer aligns with its small-business skill set.

The rapid influx of new staff members, along with changes in technology, means that some staff don't have the necessary systems skills. Worse still, they're unclear on the organization's values and sense of purpose.

Alix uses the analysis to introduce onboarding and learning programs, bringing all Whitehawk's key elements back into alignment.

For other, similar approaches, see our articles on the Burke-Litwin Change Model , and the Congruence Model . You may also find our articles on the Change Curve , Impact Analysis and Lewin's Change Management Model useful.

You can apply the McKinsey 7-S framework to almost any organizational or team effectiveness issue. The 7-S' refer to:

• Shared values.

If something within your organization or team isn't working, chances are there is inconsistency between one or more of these seven elements.

Once you reveal these inconsistencies, you can work to align these elements to make sure they are all contributing to your organization's shared goals and values.

The process of analyzing where you are right now, in terms of these elements, is worthwhile in itself. But for it to be truly effective, you'll also need to determine the desired future state for each factor. This will help you make changes and improve performance so that all seven factors are aligned across your organization.

Download Worksheet

[1] Waterman, R. H. and Peters, T. (1982). ' In Search of Excellence ,' New York: Harper and Row.

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Prioritization

“Things which matter most must never be at the mercy of things which matter least.”

– Johann Wolfgang von Goethe, 18th Century German Author

A strategy is simply arranging actions in order of importance. Strategic leadership is simply a massive ongoing exercise in prioritization.

– Prioritizing what customers, geographies, and markets to go after – Prioritizing the needs of customers to address – Prioritizing the innovation and ways to serve customers better – Prioritizing what is important to focus on – Prioritizing a company’s resources, capital, and investments – Prioritizing actions, people’s time and resources to achieve the goals – People prioritizing what they do every single day

It sounds strange, but prioritization is the main role of a strategic leader. All of the strategic concepts and tools we go over are to help strategic leaders prioritize the actions necessary to achieve a goal. And, if there is one thing that all strategic leaders should focus on day in and day out, across everything they do, it is prioritizing.

When I was a strategy analyst at Mercer Management Consulting , fresh out of Stanford, my manager and I were debating a PowerPoint slide for the executive team of a multi-billion manufacturer. It was a pretty dull slide, with some bullet points on one side of the slide, and a chart on the other, it was 8 pm, and I just wanted to feed my rumbling stomach.

My manager, Jonathan, looked at a slide for a few minutes, looked at me, paused, and then said, “How are these bullet points and this chart prioritized?” Confused, I said, “What do you mean?” He replied, “Joe, everything you do should be prioritized, whether it is figuring out what you are going to do today, analyzing data, or communicating recommendations. “

What Jonathan said that evening had a profound impact on me. And, from that day on, I embraced prioritization as one of my core principles that I try to apply to everything. The essence of problem solving is simply prioritizing the largest problems and opportunities, and prioritizing the most effective and efficient solutions to those problems and opportunities.

Why is prioritization so important?

I often find myself telling CEOs and leaders, “Imagine how much you would grow, if every day, every person, prioritized everything they worked on?”

We only have so much time in a day, so much energy, so many resources, and so much money in the bank. Constant prioritization of problems, activities, investments, and hires, is critical to making sure the actions we take will create the most value .

How do you prioritize everything?

It takes the right mindset , goal orientation, use of the right tools, and vigilance to prioritize everything continually. Here are some of the best practices for making it happen.

Prioritize Prioritization

More than anything, prioritization is a mindset of figuring out and navigating through the magnitude and importance of problems, opportunities, and solutions. Strategic leaders infuse prioritization within an organization . The simplest way to prioritize prioritization is to continually use a simple question, “How do we prioritize…fill in the blank…?”

Understand Magnitude

Prioritization is arranging things in order of importance, which necessitates understanding the magnitude of things. A substantial amount of analysis within organizations is done to try to understand the magnitude of things. We’ll go over some of the most important analytical tools to help understand the magnitude, including Pareto analysis, trend, sensitivity, variance, correlation, benchmarking , and voice of customer analysis.

Create More Options and Understand Opportunity Cost

Strong strategies and prioritization necessitate creating better options . Often, the best thing to do is not even in the current options. Spend more time figuring out what are all the options and then prioritize. If you prioritize a bunch of options that aren’t going to drive much value, then you are optimizing a sub-optimal solution.

Align Efforts to the Mission and Goals

  One of the easiest ways to ensure activities are naturally prioritized is to filter them through the mission and goals of an organization. Once again, use simple questions , such as “How does this idea help us achieve our mission or goals?”

Focus on Return on Investment (ROI)

  Another way to think about prioritization is to understand and rank order the relative ROI of a set of options. Whether you are thinking through a big project or figuring out your daily priorities, there are always two parts to the ROI equation. The investment of doing something, which represents the costs and capital tied to the time, and resources for doing something. And, the return, or the positive impact to revenues, cost, and/or capital of doing something. In a later section on decision-making, we’ll go over cost-benefit analysis, prioritization matrices, and decision matrices to help you understand the relative ROI of options.

Focus on Low-Hanging Fruit

  Anytime I work with an organization, there is often a substantial amount of low-hanging fruit, or activities, which necessitate little time and investment to capture a large amount of value. Use the prioritization matrix as a nice tool to help you identify low-hanging fruit.

DOWNLOAD THE PRIORITIZATION POWERPOINT WORKSHEET

To get you going on your prioritization, download the free and editable Prioritization PowerPoint Worksheet.

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Home > Libraries > Library Philosophy and Practice - Electronic Journal > 19

Libraries at University of Nebraska-Lincoln

Library Philosophy and Practice (e-journal)

Information literacy and the mckinsey model: the mckinsey strategic problem-solving model adapted to teach information literacy to graduate business students.

Christy A Donaldson , Montana State University

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Since July 13, 2005

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