MCKINSEYS 7S FRAMEWORK FOR IFB

INTRODUCTION TO MCKINSEYS FRAMEWORK

While some models of organizational effectiveness go in and out of

fashion, one that has persisted is the McKinsey 7S framework.
Developed in the early 1980s by Tom Peters and Robert Waterman, two
consultants working at the McKinsey & Company consulting firm in
United States to diagnose the causes of organizational problems and to
formulate programs for improvement.
The basic premise of the model is that there are seven internal aspects
of an organization that need to be aligned if it is to be successful.
The 7-S model can be used in a wide variety of Situations where an
alignment perspective is useful, for Example to help you
* To improve the performance of a company.
* Examine the likely effects of future changes within a
Company.
* Align departments and processes during a merger or
Acquisition.
* Determine how best to implement a proposed
Strategy

THE SEVEN ELEMENTS

The McKinsey 7-S model can be applied to elements of a team or a
project as well. The alignment issues apply, regardless of how you
decide to define the scope of the areas you study.
The McKinsey 7S model involves seven Interdependent factors which
are categorized as either "hard" or "soft" elements:
Hard Elements
Strategy
Structure
Systems
Soft Elements
Super-Ordinate Goals
Skills
Style
Staff
"Hard" elements are easier to define or identify and management can
directly influence them: These are strategy statements; organization
charts and reporting lines; and formal processes and IT systems.
"Soft" elements, on the other hand, can be more difficult to describe,
and are less tangible and more influenced by culture. However, these
soft elements are as important as the hard elements if the organization
has tov be successful

THE MCKINSEYS 7S MODEL

The way the framework is depicted in the above figure shows the
interdepency of values on each other and how one change can affect all
the others.

Now let us discuss the each values in brief

Super- Ordinate Goal is called "Shared Values when the model was
first developed, these are the core values of the company that are
evidenced in the corporate culture and the general work ethic.
Super ordinate goals are the fundamental ideas around which a
business is built. They are the blood notions for future directions of the
organization.

STRATERGY
The plan devised to maintain and build competitive advantage over the
competition. Strategies are long-term objectives of the organization.
SWOT analysis helps the strategies to survive into external
environment.

STRUCTURE
The way is organization is structured and who reports to whom. The
Organizational structure refers to the formal relationships among various
positions and activities performed in organists. Organizational structure
involves arrangement about reporting relationships, line of
communications, rules and procedures, which exist to guide the various
activities performed by various hierarchical position in the organizational
structure.

SYSTEM
The daily activities and procedure that staff members engage in to get
the job done. It refers to all the rules and regulations that compliment
the organizational structure. It includes production, planning and control
system, cost cutting, cost accounting and capital budgeting system.

STYLE
The style of leadership is adopted in an organization. Style is one of the
tools which top management can use to bring about organization
changes. It is the pattern of the management team of over a period.

STAFF:
The employees and capabilities. Staffing is the process of acquiring

human resources for the organizations and assuring that they have the
potential to contribute to the organizational goals. It involves selection
placement, training and development of appropriate and qualified
employees

SKILLS
Skills are the most important attributes or capabilities of an organization.
The growth of an organization depends upon the actual skills and
competencies of the employees working for the company.

IMPLEMENTATION OF THE 7S MODEL IN IFB

SHARED VALUES THE VISION

Vision
To be the customer's first choice. Being just technologically advances is
just isnt good enough. The Vision of the company is to be customers
most preferred home appliances providers.
Mission

To maximize shareholder's value and growth by manufacturing and

marketing top quality products.

To be the best in the eyes of the customer, employees, business

partners and shareholders.

To be in every home valued at 15 Lakhs+ and achieve our target of

4000 Crores turnover by 2013-14.

For our Customers:

The best product to buy, an innovative product that constantly
outperforms peers and outstanding service that makes every customer
smile.

For our Employees:

An environment where every individual learns, grows and prospers.

For our Business Partners:

IFB should be the first choice to our products and services.

For our Investors:

The company should be acknowledged as the one with highest degree
of corporate transparency; that delivers on the promises given to the
shareholders.

STRATEGY
Indian Economy opens up for Foreign companies in 1991. License raj
was abolished in several sectors including Consumer Appliances.
Appliances market became more vibrant, looking for
innovation. Consumer is flooded with information from outside world
and became more educated.
The need for deeper penetration was identified into the customer
homes.

The consumer based shifted from upclass urban customers to semiurban and upclass rural. The focus become wider. The competition
became stiffer.
Semi-Automatic and Automatic machines were need of the hour.

STRUCTURE.
The organizational structure is as depicted the imag below. This
structure works best for an organization like of the IFB so as to achieve
high productive at lowest possible costs so as to be competitive in the
market sceanario.

Managing
Director
Chairman

Chief Operating
Officer

Vice
President
Finance

Vice
President
Goa
Operations

Vice President
Marketing
Regional
Manager

National
Service
Manager
Area Service
Manager

Regional
Service
Manager

SYSTEM

1 Cost Management by value engineering through better design,

2 Planning the right mix between in-house
3 Manufacturing and bought-out parts, and
4 Cutting fixed costs in the plants
Vendor rationalization from 1400 to 200 Production Capabilities
increased across plants. Total Productive Maintenance (Increased
Equipment effectiveness from 67 to 95% in Tool Room) VRS in 20012002 opted by 2017 employees. 9 FANUC Robots were installed in
GOA plant to reduce component rejection.

STYLE AND SKILLS

Flattered and more empowered organization structure in 20032004. Role-Goal clarity process in 2003-2004 at each management
level. a new and rejuvenated IFB in 2003-2004 believes in comfort
and innovation. A 360-degree feedback was done for all senior
managers.. Average age of research engineer is below 30 years to
maintain vibrancy in research. Total Quality Focus All manufacturing
facilities were awarded by JIPM (Japan Institute of Plant
Maintenance). 64 vendors received the IFB Quality Award in 20072008. Whistle Blower Policy in 2009-2010.

STAFF
GOA Plant provides A world class development / training centre for its
employees, vendors and dealers. Vendors were treated as brother
rather than external entity. TPM extended towards vendors to achieve
Zero defect and rejection in component. Lowest Attrition ration in R &D
across industry.
Continuous training and Quality focus has helped IFB to increase
production capacity to 15 Lakh Units per Year.