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Application of McKinsey 7-S Framework

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Application of McKinsey 7-S Framework

Application of McKinsey 7-S Framework

McKinsey 7-S framework is a strategic tool used by organizations to ensure that all organizational parts work in harmony. It was developed by two consultants of McKinsey & company, Tom Peter and Robert Waterman in the early 1980s (Mindtools.com, n.d.). They have presented seven internal aspects of an organization that should be aligned for gaining organizational success. Organizations also use this strategic tool for improving performance, making predictions and implementing a proposed strategy. Primarily, the seven interdependent factors are divided into hard and soft elements. Hard elements are strategy, structure and systems, whereas soft elements are shared values, skills, style and staff. The hard elements of the framework are easy to be defined and measured such as organization charts, financial reports and formal processes. On the contrary, soft elements are difficult to define and measure (Mindtools.com, n.d.)

Diagrammatic representation of McKinsey 7-S model (Mindtools.com, n.d.)

Template for McKinsey 7-S

ElementsImportant QuestionsAnswers from the perspective of WVA
 

 

 

 

Strategy

What is strategy?The proposed digital strategy focuses on expanding business through online channels.
What are strategic objectives?·         Integrate with millennial

·         Develop partnership with churches

·         Add social media in marketing mix

·         Design an engaging website

·         Develop a customer relationship management system

·         Increase donations through partnerships

How the company would deal with competitive pressure?By developing strong association with indigenous Australians and online communities.
How company would deal with customer demands?Through big data analysis, the company would be able to identify changes in customer demands.
How strategy would be adjusted for environmental issues?The proposed digital strategy would be adjusted for environmental issues by considering online business and technology regulations.
 

 

 

 

Structure

How is company divided?The company is operated by the board members who are the non-executive directors.
What is company’s hierarchy?The company hierarchy is informal with supportive culture. Teams work together for a common shared goal of serving humanity.
How departmental activities are coordinated?Different departmental activities are coordinated through effective internal communication.
How team are aligned?Teams are aligned and organized based on different developmental and assistance projects.
Is decision making and power centralized or decentralized?The decision making is centralized and the executives of the organization make companywide decisions. However, employees are also encouraged to participate in decision making process.
What are explicit and implicit lines of communication?The company maintains open lines of communication with its employees. Through personal communication and newsletters, company’s executives coordinate with employees.
 

 

Systems

What are main systems of organization?The main system of organization is HR. The company values people and makes efforts in developing and engaging them. The strong HR base provides competitive advantage to the company.
How controls are monitored?Different controls are monitored through internal audits.
What internal processes are used for tracking?The financial and HR performance is used for tracking the progress of the company.
 

 

Shared values

What are the core values of the company?The core values of the company are: to serve poor people by promoting wellbeing, to support people in emergency situations and to enhance Christianity engagement.
What is corporate culture?WVA has clan culture with collaborative orientation. The strong leaders of the company act as mentors and facilitators for employees.
What is the strength of values?WVA places high importance to its core values and encourages employees to work on them.
 

 

 

Style

How participative is leadership style?The leadership style of WVA is quite participative.
What is the effectiveness of leadership style?The participatory leadership style is effective in empowering employees and leading change in the organization.
Are employees cooperative or competitive?The employees of WVA are cooperative and they work together as a team on different development projects.
Are teams functional or nominal?The teams are functional and categorized according to different company’s initiatives.
 

 

Staff

What are important positions need to be filled?The company hires different people based on the requirements of each project. Some positions are also filled by volunteers on temporary basis.
Is there any need of improving employees’ competencies?The employees of WVA are working on improving their technological skills.
 

 

Skills

What are strongest skills needed?Technological skills and computer literacy is the strongest skills needed in WVA.
For which skill set company is known?The company is known for its collaborative skills.
Do existing employees have ability to do job?Existing employees have the ability to do their jobs effectively, but for the implementation of digital strategy, it is essential to focus on developing technical and technological skills of employees.

 

Implementation of strategy based on proposed outline

In this section, current competencies of WVA are analyzed with respect to each strategic objective and recommendations are given to practically achieve these strategic objective.

Impact perspective implementation

The company has adequate financial resource which would help in improving wellbeing of children and eliminating poverty. WVA has generated around $1, 038 million revenues in 2014. The revenue sources of the company are private cash contributions (58%), gifts in kind (22%), public grants (19%) and other income sources (1%) (Worldvision.org, 2015). It is also revealed that the company has significant support from individual as well as secular sponsors from both public and private sectors of Australia.

What to do?

It is recommended to the company that by utilizing its financial resources and support from sponsors, they should make investments on providing healthy and hygienic living conditions to poor children, especially with low vision and blindness. It includes providence of healthy and nutritious food and safe living environment to poor children (Healthhabitat.com, 2015). Secondly, WVA should invest financial resources on opening new schools in the remote areas of Australia and provide primary and secondary education opportunities to poor children. The high performing students should also get financial assistance and scholarships from WVA. Thirdly, the strategic objective of eliminating poverty can be accomplished by providing disaster relief assistance to poor children. It refers to the immediate response to the disaster situation and providing assistance to survivors, refugees and displaced children.

Supporter’s perspective Implementation

WVA maintains good community relationships by recognizing that each community and its members have unique needs, demands and priorities and they need unique solutions (My.worldvision.com.au, 2015). The company develops partnership with communities at local level and works with them on different developmental projects. Specifically, WVA works with communities to raise happy and healthy children in Australia (My.worldvision.com.au, 2015). Currently, the company has around 400,000 annual supporters, but the company aims to effectively manage these supporters (Donaldson, 2015). The good community ties would help the company in achieving the strategic objective of providing unique experience to supporters.

What to do?

For effectively working with supporters, it is recommended to WVA that the company should conduct regular meeting with them in order to inform about the progress of the organization. They should work in close collaboration to identify the needs of communities and specifically supporters. Their efforts in accomplishing the mission of the company should be frequently appreciated and acknowledged through emails and newsletters. The tangible rewards should also be given to the regular and loyal supporters. Additionally, the company must also ensure two way communication with them.

General resource perspective implementation

WVA is aiming to expand its funding base in the next five years. For this purpose, the organization has advantage of maintaining good relationship with sponsors and donors. WVA also works with developing partnership with community groups and business entities. Mostly non-government donors and sponsors make cash contributions and provide resources that would help WVA in making positive difference in the lives of poor people (Partners.worldvision.com.au, 2015).  However, inconsistency of donors would create hindrance in achieving strategic objective of increasing resources.

What to do?

Currently, the company provides donation services on its official website (Worldvision.org, 2015). However, for further expansion of donation base and collecting adequate donations and grants, the company must gather donations through online channels. They should increase their prominence on social networking sites like Facebook and Twitter and discussion forums. A mobile application should also developed for getting individual donations. Furthermore, the process of donations for individuals and community groups should be simplified. Every member of Australian community must be allowed and encouraged to make contributions. Additionally, for maintain good relationship with donors and sponsors, WVA should provide transparency of transections to donors by giving them social proofs. The company is also required to develop and maintain good relationships with donating organizations. Likewise, for taking grants from public agencies and government, the company should emphasise on building good ties with them. The company should also engage donors through creating donation events (Koenig, 2015).

Human resource perspective implementation

WVA focuses on the individual’s strength which would facilitate in accomplishing the strategic objective of developing and engaging people. The effective leadership and strong internal communication are facilitating the organization in managing its operations. The HR leaders of the company are also working closely with the company’s executives in order to proactively manage their employees (Donaldson, 2015).

What to do?

For developing employees, it is recommended to WVA to conduct training programs for the existing employees of organization. Their knowledge and skills in different areas need to be improved through on-the-job and off-the-job training sessions. For achieving the organizational objectives, it is important to meet the expectations of employees and motivate them to work (Futa, 2015). For this purpose, it is recommended to WVA to provide adequate incentives, rewards and bonuses for their extraordinary performance. For promoting wellbeing among poor communities and making voluntary contributions, the employees should be well-compensated by the company.

Marketing perspective implementation

The company has the ability to effectively manage its brand which would assist in targeting millennial audience. Initially, WVA faced challenge of increasing their competitiveness by creating brand awareness. However, with time, the company succeeded in telling the broad story of the developmental model and delivering the perpetual and sustainable outcomes (Theroyals.com.au, 2013). Through effective social campaigns, the company has promoted its brand not only in Australia, but all over the world. The company is also doing well in enhancing wellbeing of poor children and their families. At broader level, the company is supporting communities and indigenous Australians. However, now the company is specifically focusing to identify the needs and expectations of young people (Generation Y) and make positive difference in their lives.

What to do?

WVA must use big data to identify the interests and spending patterns of millennial. Information from different databases should be retrieved about the needs and expectations of Australian millennial. Statistics and facts about the living conditions of millennial should also be explored along with the conduction of customers’ need survey. Additionally, different promotional tactics should be adopted for targeting millennial. However, internet and online media channels are the most appropriate platforms for accessing the young generation in Australia because millennial have strong affinity for technology.  They are also sharp and intelligent in evaluating brands and choosing the one that is more convenient and cost effective for them (Goldmansachs.com, n.d).

Section 5: Evaluation Strategy of WVA

The proposed digital strategy of WVA is evaluated by using the balanced scorecard approach. The strategic objectives defined in the previous sections would be measured through this strategic evaluation tool.

Balanced Scorecard Approach

The balanced scorecard is a strategic management tool that is used by different business organizations and in different industries for aligning business activities with the overall mission and strategy of an organization. Basically, it translates the vision and mission of a company into practical ways of managing business at different levels. It also improves internal as well as external communication within an organization and better allows to evaluate the performance of an organization against strategic goals and objectives. The concept of balanced scorecard was coined by Dr. Robert Kaplan and David Norton with the purpose of giving a balanced view of organizational performance (Balancedscorecard.org, 2015). This strategic evaluation tool helps to integrate non-financial measures with the traditional financial aspects of a business organization. Along with the measurement of performance, the balanced scorecard is also helpful for planners in identifying what should be done and how it should be measured. In other terms, the tool facilitates managers to execute different strategies effectively.

Along with measuring the financial performance, a company must monitor its performance in other organizational aspect such as how it creates value by investing in customers, employees, suppliers, technology and innovative processes (Balancedscorecard.org, 2015). The four aspects of balanced scorecard are: learning and growth perspective, customer perspective, internal business process perspective and financial perspective.

Four Dimensions of Balanced Scorecard and its relation with organization strategy (Robert and David, 1996, p. 76)

Reliability and Effectiveness of Balanced Scorecard

According to the balanced scorecard approach, it is crucial for the companies to evaluate their journey based on the financial and non-financial measures in the information age (Balancedscorecard.org, 2015). Therefore, the balanced scorecard is used for evaluating the proposed digital strategy of WVA. It would help in analysing the financial objectives of the company which it aims to achieve in next five years. Additionally, WVA would also be able to focus on other aspects of organization to measure the effectiveness of its proposed strategy.

The balanced scorecard method is also used for translating the strategic objectives of WVA into different quantifiable measures. The setting of targets and aligning strategic initiatives are beneficial in providing strategic direction.  It would also help the management of WVA to communicate operating objectives to every employee of the organization. The effective outcomes of balanced scorecard have also compelled me to choose this method. For instance, the balanced score card results in improved processes, monitored progress, motivated employees, greater customer satisfaction and manageable financial data usage (McCarthy and Chapman, 2013). The four dimensions of the balanced scorecard also make it a valid and reliable performance model (Boulianne, 2006). Henceforth, this strategic tool is preferred for WVA’s strategic evaluation.
Template of Balanced Scorecard

(Applied to WVA five-year strategic plan)

 Strategic PrioritiesObjectivesMeasuresTargetsInitiatives
FinancialIncrease its resource base through grants and donations through online channels·         Increase  grants

·         Increase online donations

·         Frequency of donations and grants received

 

20% increase annually·         Online donation program

·         Social online campaign

CustomersCustomer relationship management·         Enhance wellbeing of poor children

·         Provide education opportunities to poor children

·         Reach millennial in Australian community through university clubs.

·         Target millennial online

 

·         Number of poor children getting admission in Australian schools

·         Retrieve statistical data on general health conditions of poor children.

·         Conduct customers’ needs survey.

·         Use big data to retrieve information about millennial.

·         Increase student enrolment in schools by 25% annually.

·         Annual increase number of schools for poor children

·         Use big data for retrieving information on monthly basis.

·         Student enrolment program

·         Poor children education program

·         Millennial promotional tactics development and review

·         University club millennial participation program.

 

Internal Business ProcessesImprove processes for achieving its mission of contributing to humanity·         Use social media for increasing donor base and supporters.

·         Develop an engaging and responsive website

·         The number of likes on Facebook and followers on other social media sites.

·         The number of visits of donors on the new and revised website

·         Increase the number of Facebook and other social media donors by 30% annually.

·         Increase number of visits of donors by 30% on annual basis

·         Social media campaigns

·         Restructuring of company’s official website

Learning & GrowthFocus on developing people and  partnership·         Developing and engaging employees.

·         Enhancing partnership with churches and other service sectors

·         Employees satisfaction survey

·         Performance appraisals

·         Approaching reliable partners

·         Conduct employees survey on quarterly basis

·         Conduct performance appraisals semi-annually.

·         Employee training programs

·         Career development programs

·         Promotions

·         Partnership initiatives

 

Financial Perspective

The financial perspective of the balanced scorecard emphasizes on the need of the organization to determine the financial objectives related to a proposed strategy. The financial objectives are then measured by using financial data. WVA is aiming to expand its resource base by increasing donations and grants. This would lead to increase in the revenues of the company. For measuring the performance of WVA, number of online donors and sponsors of WVA will be accessed. Simplification of donation process would also be evaluated. Company reports will be reviewed to measure frequency of donations and grants received by WVA. The number of financial supporters in Australia will also be determined through statistical reports and big data. WVA would also take different strategic initiatives for the accomplishment of strategic objective of increasing resources. For instance, online donation program and social online campaigns would aid in increasing online donations and grants.

Customers’ Perspective

The customers’ perspective of the balanced scorecard reflects on the importance of customers for a company (Balancedscorecard.org, 2015). The performance of a company with regard to creating value and satisfaction of customers is analyzed by this dimension. If a company’s strategy does not emphasize on customers, then it indicates decline in the performance of the company in future. WVA in its digital strategy is focusing on the customer relationship management. For its existing customers, the company is planning to include email notification service. Furthermore, the company would evaluate the strategic objective of improving wellbeing of poor children in Australia through different ways. Firstly, statistical reports will be reviewed to identify the number of children living below the poverty line in Australia. Secondly, statistical reports will also be explored to reflect on the number of schools in Australia that are providing quality education to poor children. Thirdly, the physical and mental health conditions of poor children will be reviewed to measure the effectiveness of proposed strategy of WVA.

One of the strategic objectives of WVA is to involve millennial through university club channels. For measuring the performance of the company on targeting millennial audience, information would be retrieved through big data. Social media sites and internet would also be used for the identification of spending patterns of millennial. Likewise, the presence of WVA on online channels would be determined through exploring different websites.

The strategic objectives of WVA related to customers would be achieved by taking different strategic initiatives. For instance, student enrolment program and poor children education program would lead to accomplishment of strategic objective of eliminating poverty among poor children. Similarly, review of promotional tactics for millennial and University club millennial participation program would aid in targeting Australian millennial.

Business Process Perspective

The internal reflection on the business processes is essential for measuring the overall success of a proposed strategy (Balancedscorecard.org, 2015). A good strategy focuses on the operations of a company that would ultimately lead to enhanced customer satisfaction and better business performance. WVA is aiming to develop an engaging and responsive website. This can be achieved through restructuring of current website of the company. The users will be allowed to communicate with company. The company would also respond actively to customer’s queries and concerns. The effectiveness of restructured website would be measured through user’s response and comments on the new website. The number of visits of users would also be used as an indicator of determining the effectiveness of revised website. In addition, awareness about WVA would be created through social media. For assessing this strategic objective, the company would identify the number of likes on Facebook and followers on other social networking sites such as Twitter, You Tube and Instagram.

Learning and Growth Perspective

Along with other dimensions of balanced scorecard, the learning and growth perspective evaluates a strategy by reflecting on the involvement of employees and partners. An effective strategy focuses on the development and growth opportunities of employees in addition to improving partnerships (Balancedscorecard.org, 2015). The engaging and developing objective would be achieved by measuring the number of training and skill development programs conducted for employees every year. In addition, employees’ satisfaction surveys would be conducted to access the morale of employees.  Their work performance would also be evaluated through regular performance appraisals. Subsequently, career advancement opportunities provided for engaging and developing employees would be explored by reviewing human resource reports. The strategic initiatives related to employee development would be employee training programs, career development programs and annual promotions for employees.

Likewise, the strategic objective of building strong partnership with churches and other service sectors of Australia would be measured by finding the number of company’s partners and their retention over the period of time. A survey would also be conducted to gather response of partners on their relationship with WVA. Partnership initiatives would aid the company in increasing partners.

Each of the defined strategic objective would be evaluated quarterly. At the end of each year of five-year strategic plan, a report would be generated on the strategic progression. In this report, each strategic objective will be measured and quantified. It would also be ensured that the strategic progress of the company will be communicated to every employee of WVA. Emphasis would also be made on the improvement areas in order to ensure that it would not a bad strategy.

 

 

 

 

 

 

References

Balancedscorecard.org (2015). Balanced scorecard basics. Retrieved from

Boulianne, E. (2006). Empirical analysis of the reliability and validity of balanced scorecard measures and dimensions, In: Marc J. Epstein, J.Y. (ed) Advance Management Accounting, Vol. 15, Emerald Group Publishing, p. 127-242.

 

 


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