Higgins 08 S Model – An Adaptation from Waterman’s Seven S model:Strategy, Systems and Processes, Resources

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Change Management MGMT625

Lesson # 33

Higgins 08 S Model An Adaptation from Waterman's Seven S model

The purpose of this lesson is to discuss one of the most familiar models which is commonly known as

McKinsey's 7-S model and was first introduced to us in 1982 by Thomas J. Peters and Robert H.

Waterman, Jr. The most notable thing about the 7-S model is that it supports, and is similar to, the

framework of the managerial functions (planning, organizing, staffing, leading, and controlling).

In the 8-S framework, the author emphasizes on cross-functional way of thinking about the execution of

a revised version of strategy across an organization. Successful organizations spend a great deal of their

time on strategy execution and realize that execution of a strategy is just as important, if not more

important, than formulating a strategy. So the general tendency here is that how an organization can

achieve successful strategy execution that revolves around aligning key organizational factors with

strategy

1. Strategy

We are well familiar with the hierarchy of strategic intent, which is formulation of corporate, business,

functional operational level strategies after evaluating scenarios thru SWOT analyses. In strategy, we

go for an analysis about changes in Strategic Intent which can be quantitative or qualitative. And there

are three types of strategic levels at which a strategy could be accomplice: corporate, business, and

functional levels.

The corporate strategy defines what business or businesses the firm is in or should be in, and how the

firm will conduct that business (or those businesses) in a fundamental way. For instance, an

organization has some number of businesses. In some it estimates the opportunity of growth potential

and in some others it estimates losses. The organization goes for divestment in those who are in loss

and go for fresh investment where the growth potential has been estimated.

The business strategy describes how a firm will compete in a particular business. A firm's business

strategy is its major plan of action aimed at gaining a sustainable advantage over competitors. Relative

differentiation and relative low cost are the two most frequently suggested generic business strategies.

Some other business level strategies are: development of new product, innovation in research and

development, or capturing of some other markets.

Functional strategies support the business strategy. Functional strategies in the areas of marketing,

finance, operations, human resources management, R & D, information, and logistics should be aligned

with the business strategy.

Process strategies normally cut across functions and are aimed at integrating organizational processes

across the organization in order to make them more effective and more efficient. Strategy formulation

involves the consideration of strengths (for example, core competencies and capabilities), weaknesses,

threats and opportunities.

All strategies must all be aligned for strategic performance to be optimal at both intra and inter levels.

The distinct aspect of this model is that it talks about the alignment of various strategies at multiple

levels and also with deal with alignment issues with other variables explained below. Often such type of

alignment is overlooked in the implementation models.

2. Structure

The structure means job, grouping of jobs, authority and its delegation, field units & Head office,

departmentation, operating procedures, control etc. The organization's structure, according to Higgins

consists of five parts:

Change Management MGMT625

jobs;

the authority to do those jobs;

the grouping of jobs in a logical fashion, for example, into departments or divisions;

the manager's span of control;

and the mechanisms of coordination.

The first four of these parts are normally shown in an organization chart. The last is usually described in

the firm's operating policies and procedures.

Major issues include the choice of the organizing principle for primary organizational units, for

example, product versus function, or product versus geography; and how such authority to delegate to

organizational units and managers, traditionally thought of in terms of centralization versus

decentralization, or mechanistic versus organic.

For instance, rivalry between marketing and production departments or between marketing and finance

departments creates ethnocentricity or conflict in working environment. Nonetheless, structural

harmony can be created through promoting policies of internal customer and cross-functionalism

3. Systems and Processes

Organizational systems are designed to get things done from day to day. For example with in

organizational system we have sub systems like strategic planning systems, information systems,

capital budgeting systems, manufacturing processes, reward systems and processes, quality-control

systems and processes, and performance measurement systems. This is the third factor in Higgins

model is which we have discussed earlier in Management Orientation. The systems and processes

enable an organization to get things done on day to day basis. The point here is that the change in

strategy envisage by organizational planners should be compatible to the day-to-day practices as well.

For dealing with such actions we have two practices:

Internal Customer Philosophy

ii)

Cross-Functionalism

At systemic level, we have an internationally practices which is given by ISO-9000. This suggests that

the systemic structure should be able to deal with the philosophy of Internal Customer. It means that, in

order to promote inter-departmental harmonious relationship one department should treat other as an

internal customer.

The other managerial philosophy is of cross-functionalism which places greater emphasis on amongst

the interaction and cooperation of specialized functional units, such as departments, according to their

role in the organization for organizational stability and cohesion. One such technique to promote cross-

functionalism is of job rotation.

4. Style (leadership/management style)

The consistent pattern of behavior exhibited by leaders/managers when relating to subordinates and

other employees. Major issues include the way leader's or manager's presents, communicate, and

control the people or situation. How effective the decision making process is? In literature, particularly

in management context, we have four leadership styles available:

Authoritarian Style

Consultative Style

Consensus oriented Style

Democratic Style

Change Management MGMT625

The other thing which important that how a leader relate itself to its subordinate, either he

believe on transaction oriented relationships which is short term or professional phenomena or

transformational oriented which is long term and a progressive phenomena.

5. Staff

The number and types of employees with what types of individual and group competencies the firm

needs to meet its strategic purposes. The staffing means filling positions in the organization structure.

The main issue is that how to create an appropriate Management Inventory or Human Asset in an

organization and it can be synergized with strategic change or strategic intent.

6. Resources

The extent to which the organization has adequate resources to achieve its strategy--people (staff),

technology and money are the three most critical. Resources may include funding for divisions such

as R & D, or technology such as software, or systems such as those for knowledge management and

organizational learning. The other major concern is the extent to which the organization leverages

its resources. However it is important that resource-strategy compatibility is highly desirable.

7. Shared Values (organizational culture)

The values shared by members of the organization that make it different from other organizations.

Managing values and cultural artifacts are critical to successfully leading organizational change. This

operates at intangible level and has significant impact on the working environment of an organization.

8. Strategic Performance

Strategic performance is a derivative of the other seven `S's. Strategic performance is possessed by an

organization as a whole, or for profit-based parts of the whole. Performance can be measured at any

level. Financial performance measurements are critical barometers of strategic performance, but its

expanded version of balanced scorecard approach, now a days is considered best. Because most

organizations and business units are structured along functional lines--marketing, operations, finance,

human resources, R&D, information, logistics--cross functional execution issues are sometimes

overlooked when strategy is changed. Important thing to note is that strategic change operates at

holistic level integrative of different functional areas. The same is also known as strategic performance.

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