I just reread "Structure Is Not Organization," by Bob Waterman, Tom Peters, and Julien Phillips, published in Business Horizons in June 1980, that introduces the McKinsey 7-S framework.
This paper's still got a lot of juice.
The title is the whole argument: the picture of the thing is not the thing, an org chart is not an organization, the map is not the territory, etc. Strategy and structure alone cannot produce results.
TL;DR:
- The image of the organization is not the organization. Strategy decks and org charts are representations. The actual organization is the sum of behaviors, relationships, and capabilities that exist regardless of what's on paper.
- Soft doesn't mean unimportant. It means hard to see, hard to measure, and hard to change. Those are reasons to take it more seriously, not less.
- You can't change one S and expect the others to follow. The elements are interdependent. A new strategy with the same skills, style, and systems will produce the same results.
- The pace of change is gated by the slowest S, usually either skills or shared values. Announcing a new structure takes a week. Building the skills to make it work takes years.
- This was obvious to some people in 1980. The insight isn't new. What's new is pretending we've never heard it—reorganizing the boxes every few years while leaving the soft stuff untouched, then wondering why nothing changes.
Where it came from
Ron Daniel, McKinsey's managing director at the time, noticed that even sophisticated strategies kept failing in execution. 👋 He gave a young Tom Peters—freshly back from a Stanford PhD in organizational behavior—a small assignment to figure out why. Peters had been pulling from Jim March, Herbert Simon, Karl Weick—ideas like bounded rationality and satisficing. The framework crystallized in a two-day session in San Francisco where they landed on an alliterative model with seven S's. Peters thought it was gimmicky, but he was wrong. Cringe wins! Forty-five years later, people still remember the framework. Long version here.
The argument
The 7-S model divides into "hard" and "soft" elements:
Hard: Strategy, Structure, Systems. These are the ones consultants (and executives) usually focus on, because they're legible, and they make nice, fancy decks.
Soft: Style, Staff, Skills, Shared Values (originally called "Superordinate Goals," lol). These actually determine whether anything works. They're harder to see and harder to change.
Other notable ideas
- "Hard is soft. Soft is hard." The financials and the org chart look solid but are actually malleable. The culture and the capabilities look fuzzy but are actually stubborn.
- The authors were explicit: "We believe that style, systems, skills, superordinate goals can be observed directly, even measured—if only they are taken seriously."
- And: "A shift in systems, a major retraining program for staff, or the generation of top-to-bottom enthusiasm around a new superordinate goal could take years. Changes in strategy and structure, on the surface, may happen more quickly. But the pace of real change is geared to all seven S's."
Why this (still) matters for OD
This paper sits at a hinge point in org design history. McKinsey's bread and butter had been strategy and structure—boxes and lines, portfolio theory, the rational redesign of the firm. Peters and Waterman were insiders arguing that the firm's core toolkit was insufficient. You could get the structure right and still fail, because the soft stuff would eat your beautiful design.
What they didn't quite do—and what I've been thinking through in a long essay I'm writing right now on this very topic—is resolve the tension between the two approaches. The 7-S framework includes soft elements, but it doesn't tell you how to work on them. It's still fundamentally a diagnostic tool, a checklist, a way to notice what you're missing. It doesn't give you a method for changing culture, building skills, or shifting style.
That's the gap that the behaviorally focused "side" of Org Design was supposed to fill. In the decades since this paper was published, the two sides of OD mostly talked past each other. Structure people drew operating models. Behavior people ran workshops. Neither could do the other's job. The 7-S framework was a structuralist firm acknowledging the limits of structuralism. That acknowledgment was and still is important, but this is very much unfinished work.