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Usingthe McKinsey7-s Modelto

iMprove coMpetitive intelligencecapabilitiesAvner BArneA,A.B. Projects

Th 7-S modl was oigially usdto aalyz both lag ad small fimsby lookig at thi stuctu, offiga wid xplaatio thoough slmts: statgy, stuctu, systms,styl, staff, skills, ad shad alus.Maags should tak ito accout

ths factos to succssfully implmtthi compays statgy sic all slmts a itlatd failigto cogiz o of thm affcts thpcptio of th oths.

Tom Petes and robetWateman, then consultants inMcKinsey & Company, applied thisfamewok when analyzing whatmakes a company excellent. Petesand Wateman published thei 7-SModel in the aticle Stuctue is not

oganization (1980). This model alsoappeaed late in thei bookIn Searchof Excellence in 1982.

I was lookig fo modls to suppotfocusig o tagt compais ad toimpo my aalysis wok. I applidthis modl to comptito compaisad foud it a usful cotibutio toth oall stimatio of th fimscapabilitis.

THE SEVEN ELEMENTSStrategy. Actios a compay

plas i spos to o aticipatio ofchags i its xtal iomt. Itmay also b s as plas fo allocatioof soucs to abl th compaysidtifid goals.

Structure. Basis fo spcializatioad coodiatio iflucd pimailyby statgy ad by ogaizatioal sizad disity. This is also th way thatdifft uits i th fim lat to ach

oth.

Systems. Fomal ad ifomalpocdus that suppot th statgyad stuctu. Oft ital systmsa mo powful tha thy a gicdit fo. Thy a also th pocdusad pocsss that chaactiz howth wok should b do ad ital

systms usd to accomplish th ddpfomac.

Style. Th cultu of thogaizatio, which cosists of twocompots. O is ogaizatioalcultu, th domiat alus, blifs,ad oms which dlop o timad bcom latily duig fatusof ogaizatioal lif. Th oth ismaagmt styl, how ky maagsbha ad what thy do ath thawhat thy say. It asws th qustios:

How do thy spd thi tim? Whata thy focusig thi atttio o?

Staff. Huma soucmaagmt, th pocsss adffots usd to dlop maags,socializatio, ad th shapig of basicmaagmt alus, It also icludsways of itoducig youg cuits toth compay, ad th suppot gi tomaag mploys cas.

Skills. Ths a th distictiad co comptcis of th compay,

Thy iclud th ways comptcisa xpadd o shiftd. This ca alsob dtmid fom th pspcti ofco comptcis that xist ad adlopd i th fim.

Shared values. Also calld sup-odiat goals, ths a th ctalblis ad attituds, guidig cocpts,ad fudamtal idas aoud which abusiss is built. Usually statd at thabstact ll, thy ha gat maigisid th ogaizatio though

outsids may ot s o udstad

thm. Thy ca b summaizd as whatxtt th compay stads fo ad whatit blis i.

These seven elements also helpestimate the effectiveness of a fim.They ae inteelated -- if one elementchanges, it will affect all the othes.

Fo example, a change in humanesouce systems such as intenalcaee plans and management taininghas an impact on oganizationalcultue and thus will affect stuctues,pocesses, and finally the chaacteisticcompetences of the oganization.

Anothe example is changes in thestuctue such as meging sales andmaketing that affect the numbeand quality of new poducts that thecompany can launch.

HARD AND SOFT ELEMENTS

Th s lmts ca b diiddito had ad soft Ss (s figu 1).Th th had Ss (cicls) a coctad latily asy to idtify. Thyca b foud i statgy statmts,copoat plas, ogaizatioal chatsad oth documtatio. It is commoto aalyz ial compais by focusigo ths th.

Th fou soft Ss (cicls) amo aiabl sic th capabilitis,alus, ad lmts of copoatcultu a cotiuously chagig addlopig. Usually dtmid byth mploys of th ogaizatio, it ismo difficult to pla o to iflucths chaactistics. Although th softfactos a blow th sufac, thy hasigificat impact o th had lmts.

Peters and Waterman mentionedthat the most successful companies

work hard on the soft Ss (1982 p9-15).

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From the competitive intelligence pointof view, it is not only more difficult

to evaluate these four soft Ss but alsomore challenging to gather the relevantinformation on these aspects.

COMPETITIVE INTELLIGENCE

USE

Usig th s S modl icomptiti itlligc abls abtt xamiatio of tagt compais,icludig comptitos, pottialcomptitos, statgic supplis ad

majo customs. I o cas thismodl sd to claify aspcts ot fullycogizd bfo: ital difficultisamog th sio maagmt thataffctd th pfomac of thcompay. I aoth cas th xistigcultu cicumtd coopatio withsio maags cuitd fom outsidth fim. This causd usolddifficultis that ptd thm fomxcutig ffctily.

In a high tech company, a lack

of investing in the development andtraining of the technological staff was

one of th maiasos fo thdcliig qualityad quatity i wpatts. A itstigcas is wh a globalcompay, whillookig cafullyito its pfomac,discod that itwas spdig muchlss soucs adatttio to shap aw statgy ddas a sult of chagsi th makts ad i

thi pimay ial.Th lat sposcausd s damagsto th compay thatw ot big simmdiatly butappad i two toth yas.

I ha ctlyapplid this modl

to a mgs ad acquisitios pocss,which gatd sigificat addd alu

compad to wh it was ot usd isimila ts. Lack of succss adsygis i such mgs is oft basdo a clash of difft cultus, alusad styls, which mak it difficultto stablish commo systms adstuctus.

CONCLUSIONS

Implmtig th 7- S Modlduig comptiti itlligc ca

poid sigificat addd alu. Youca cat btt dfid ad focusdky itlligc topics (KITs) fo afim by applyig th s lmtsof this modl to th ffot. It imposboth th gathig ffots as wll as thaalysis.

Th modl also psts a mocomphsi pictu wh applidi additio to th cotioal toolsusually basd o fiacial aalysis.By takig ths majo aspcts ito

cosidatio you ca impo youassssmts gadig a tagt compay

ad mak ifcs that ca b applidto dtmi how this compay willact to situatios i th futu.

Comptiti itlligcpactitios oft ha to takadditioal stps to gath th latifomatio dd by ths lmtsthough itiws of fom mploysad xcutis, comptitos, statgicpats, supplis, majo customsad xtal xpts. This ifomatioca abl a btt dill dow itoth aious aspcts that may smpoblmatic wh tyig to fid out thpicipl causs ad th scop of thpoblms.

REFERENCES

Pascal, r.; Athos, A. (1981). The Artof Japanese Management, Lodo:Pgui Books.

Pts, T.; Watma, r. (1982). InSearch of Excellence: Lessons fromAmericas Best Run Companies, nwYok, Lodo: Hap & row.

rcklis, D. (2001). Th 7-S modl,http://www.thmaag.og/

pdf/7smodl.pdfWatma, r. J.; Pts, T.; Phillips,

J.r. (1980). Stuctu is otogaizatio, Business Horizons,23/3, p14-26.

Avner Barnea is a former senior memberof the Israeli Intelligence Communityand is a strategic consultant in CI and

business strategy in Israel and abroad.He has an intensive experience in theintegration of CI systems into Israelicorporations. Avner is a guest lecturer onCI at the Hebrew University of JerusalemBusiness School and at the ManagementSchool of the University of Haifa, andteaches CI at the Center of AcademicStudies. He holds a MA from the HebrewUniversity of Jerusalem and graduatedfrom the Executive Program at Tel AvivUniversity. Avner can be reached at:

avnerpro@netvision.net.il.

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Structure

Strategy Systems

Shared

Values

Skills

Sta

Style

Figure 1: The seven SsWatma, r. J.; Pts, T.; Phillips, J.r. (1980).

Stuctu is ot ogaizatio, Business Horizons, 23/3,p21.