McKinsey 7S Model is another pivotal and extensively applied change management model that

organizations utilize to deal with changes. The origins of this model are linked to the 20th
Century. It was proposed by Robert Waterman and Tom Peters in 1970. The framework
examines the internal elements within an organization to determine how they can be aligned
with the objective of effective change management.

Basically, this model of change management aligns the objectives of organizational transitions
to companies’ organizational design. Furthermore, Mckinsey 7S Model classifies the internal
elements within an organization into soft elements and hard elements. The hard elements
identified under McKinsey's 7S Model include structure, strategy, and systems. On the contrary,
the soft elements as per the model include shared values, skills, staff, and styles. Given below
is an elaboration of each element that the model includes.

McKinsey 7S Model of Change Management Taking Coca Cola’s Case

Let us try to understand the application of the McKinsey 7S Change Model with a real example
for greater clarity and relevance. Coca-Cola, as the world already knows, is one of the most
successful total beverage companies in the world with more than 200 brands catering to a wide
range of customer demands and wants.

As many would already know, Coca-Cola acquired Costa Coffee from Whitbread PLC in the
year 2019 to advance its ambitions of becoming a total beverage company. Let us try to
understand how this acquisition change moved through the change management process as
per McKinsey 7S Model.

Coca-Cola Structure: To facilitate the success of Costa Coffee’s acquisition there were
structural changes that the top management of Coca-Cola initiated. To elaborate, Dominic Paul
was replaced as the CEO of Costa Coffee by Jill McDonald. Before this Jill McDonald had been
the CEO of Marks and Spencers and the global marketing head of British Airways. She was
roped in given her paramount experience in helping UK-based brands scale new heights as
Costa-Coffee too is basically a UK-based brand headquartered in Dunstable.
Coca-Cola Strategy: By acquiring the second-largest coffee chain in the world, Coca-Cola
pursued its strategy of becoming the world’s most valuable and versatile total beverage
company. To manage this change in a more efficient way, the change managers who proposed
the acquisition did a stakeholders analysis first and explained to the stakeholders including
shareholders of the company how this acquisition will boost the company’s performance in
becoming the most successful total beverage company. They held open communication with the
top management and others on how Costa-Coffee being the second-largest coffee chain
globally will make the company’s expansion into the global coffee chain industry much more
successful.

Coca-Cola Systems: The company has advanced technological infrastructure and also has a
well-planned system of global distribution. There are multiple channels of distribution and the
company has a large network of suppliers. The operations are facilitated by state-of-the-art
technologies and automation. Besides, there are strong financial systems and human resource
management systems in place. The company used its strong finances to acquire Costa-Coffee
for $ 4.9 billion. Further, the company used its other strongly built systems linked to
performance management, technological capabilities, training infrastructure to facilitate the
change.

Coca-Cola Shared Values: Coca-Cola is determined to achieve its vision that revolves around
the notion of 6Ps. These include profit, people, portfolio, planet, productivity, and partners. The
larger vision of the company is to offer consumers the choice of beverages they love, create a
sustainable future, and make positive differences in people’s lives. By acquiring Costa Coffee,
the company’s vision of offering choice beverages to people got a further augmentation as there
is a massive number of coffee consumers globally.

Coca-Cola Skills: Coca-Cola worked on skill development and skill enhancement within its
workforce to manage coffee-supply chains, marketing expertise needed for promoting a coffee
brand to make constant progress with this acquisition. The company identified the skill gaps and
plugged all those gaps with employee training and constant feedback to help its employees
incorporate all the skills needed to implement the change successfully and to sustain it. The
performance of the employees and the progress of the acquisition were tracked by key
performance indicators and productivity tracking tools.

Coca-Cola Staff: The company has more than 700,000 workers who are managed with a robust
system of incentives and rewards to keep the overall staff morale high. Besides, for high
engagement and better talent management, the company embraces a culture of diversity and
inclusion. When the company acquired Costa-Coffee, the company also integrated Costa
Coffee’s staff into its workforce because they had the expertise and experience in running
Costa-Coffee. Besides, the company also hired new professionals to sustain the change who
added to the present expertise of the global coffee industry.

Coca-Cola Styles: James Quincey is the Chief Executive Officer of the company and in 2019,
he also took over as the chairman of the company’s board of directors. He has a dynamic,
visionary, and participative style of leadership. He is determined to drive revolutions within the
organization. Still, he would have to keep refining his leadership effectiveness and continue to
drive greater innovation for the company to achieve its strategic goals. He needs to be flexible
and open to changes in his leadership subject to the situation’s demand. With his leadership
style, he keeps employees motivated and also promotes a culture celebrating employees’
success and the success of Costa Coffee’s milestones to keep improving the outcomes of this
acquisition.