Contextualize your strategy for consistency

At its core, strategy has three components. The analysis and diagnosis answer the question of what the heck is going on. Based on this answer, strategists must make decisions requiring strategic trade-offs. When those choices are made, the organization must align its actions with succeeding.

Whenever I analyze the strategy of an organization, I look at those three elements. And when I dig deeper and look at the third point only, the alignment within the company, I follow the 7S framework by Peters and Waterman. When Tom Peters and Bob Waterman published their book "In Search of Excellence", they worked for McKinsey and tried to understand why some companies are more successful than others companies. The 7S model summarizes their findings. An important note here: My friend Phil Rosenzweig wrote an well-researched, interesting and illuminating book on the Halo Effect, in which he demonstrated that the empirical validity of the framework is shaky, at best. I use the model, nonetheless, as a framework that allows discussions and not as an analytical tool to predict success.

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The center of the model is the "shared value". The only reason this center is called shared values, not culture, is aesthetics. It would be hard to sell a management theory called the 6s+1p model.

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The model focused on human resources (soft S, such as leadership style, staff and skills) rather than the traditional tangible factors structure, systems, and strategy.

Accordingly, the model divides these seven elements into two categories:

Hard elements are strategy, structure, and systems: these elements are easier to identify and define and can be directly influenced by management.

The soft elements are culture, here called shared values, skills, style, and staff: These are harder to define as they are less tangible but are just as important as the hard elements.

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Let's quickly discuss the seven elements so he can apply the model in a concrete strategic move.

Strategy. As you know, there is various definition of what a strategy is and does. At its core, a strategy describes the best fit between external and internal dynamics. The strategy is often described using the Business Model Canvas.

Structure. The structure is the company's organizational chart. It shows how the different units and departments of the company are organized, who reports to whom, and how tasks are distributed and integrated. A company's structure can be hierarchical or flat, centralized or decentralized, autonomous or outsourced, specialized or integrated. Compared to most other elements, it is more visible and easier to change.

Systems. The main components of this dimension are the organization's IT landscape, factory processes, supply chains, policies, and procedures.

Skills. When the 7-S model was introduced, the service sector became dominant, and the term "knowledge worker" emerged. It became increasingly clear that the competencies of individuals are essential in the fabric of an organization's overall competencies.

Staff. For many organizations, its staff is the most valuable strategic asset. This element focuses on the number of employees, recruitment, development, compensation, and other motivational considerations.

Style. This element refers to the management style of the company's leaders. It includes their actions, behavior, and interactions.?

Shared values. As explained below, the central element of the 7-S model is culture, which is represented by "shared values.” Shared values represent the organization's beliefs, attitudes, perceptions, behavior, practices, and artifacts.

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The framework can be applied to implement new strategies, analyze how different critical areas of your organization work together, facilitate change, harmonize processes in the context of a merger or acquisition and support management thinking in implementing strategy and managing change.

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