McKinsey 7S Model: A strategic assessment and alignment model

The McKinsey 7S assessment is a great tool to use when working with business client and are struggling to create sustainability.

The Organizational Strategist


The 7S model is a strategic model that can be used for any of the following purposes:

  • Organizational alignment or performance improvement
  • Understanding the core and most influential factors in an organization’s strategy
  • Determining how best to realign an organization to a new strategy or other organization design
  • Examining the current workings and relations an organization exhibits

The model, made famous by the McKinsey consulting company, is good for a thorough discussion around an organizations activities, infrastructure, and interactions.

-The model and its usage-

Here is the 7S model that portrays seven elements of an organization.


I define the elements as follows:

Strategy – This is the organization’s alignment of resources and capabilities to “win” in its market.

Structure – This describes how the organization is organized.  This includes roles, responsibilities and accountability relationships.

Systems – This is the business and technical infrastructure that employees use on a…

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Beware of a LLC’s: Landmines That will Cost You.

When I started my business back in 1999 as a Sole Proprietor, I was excited to say the least. Things went smoothly, no major hassles, no extra stress (regarding reporting to the government), it was simple. Simple enough that I didn’t have to worry about spending more money to stay in business at the end of the year. I filed my taxes as a sole-proprietor along with my W2 and looked forward to a nice return by February.

In 2006, I had this brilliant idea to restructure my business as an LLC (Limited Liability Company) because I was told that would give me asset protection and give my business a more professional appearance. I thought, “that sounds like a good idea” why not. Then one day I saw a promotion, $99 to form a LLC by Legal Zoom. Gave them a call, went through the process which was easy and painless. By the end of the call I ended up paying $169 after all the so called miscellaneous fees.

The representative began walking me through the process; being a Register Agent and when I received my Statement of Intent (SOI) be sure Legal Zoom was listed as the RA; and when I get a letter from the Franchise Tax Board (FTB), how I wanted to be treated-select Single Member Manager (SMM). I don’t recall ever discussing any other filing requirements and surely nothing about annual fees to be paid to FTB. Being this was my first time ever filing for a LLC, I did what was asked of me. A few weeks later, I received my Certification notice in the mail.

Here it is the end of the year and I filed my taxes as I would normally, except now I had to include income from my business. No problem their. Both federal and state returns were mailed off and as usual, February-March I received a refund. There were never any notices from IRS or FTB suggesting to send or pay anything extra, so every year like clock work I filed as usual-file and get a refund. Then one-day, I was speaking to another business owner who said she too had an LLC. She began asking questions like how do file my return? and am I paying the $800 annual minimum fee? I said no, what is that? Shortly thereafter, I called FTB to find out more about this fee. Spoke to a representative and asked if I owed them any money. By this time it’s 2010 and was told no, you’re account is in good standing. So, I thought okay and didn’t worry about it.

However, just to be sure, every year thereafter I called FTB up until 2013. I was always told the same thing (you’re account balance is $0 and in good standing). 2013 was also a year which I didn’t file my taxes and stopped doing business under the LLC. A year later I received a letter from the Franchise Tax Board requesting my return for 2013, at which time I also notified them that I was no longer doing business under the LLC and wish to dissolve it. From that point on, I continued to get these letters about filings from previous years, which were submitted via certified mail. Finally I called and spoke to the ruddiest person who said “mam the last filing we received was in 2006”. So, I had to resend every return 2006-2015.

Two months later I got another letter, now I’m thinking what the …. Called again and finally an intelligent person answered and explained exactly what was missing. It wasn’t the full return, it was Form 568. At this point I was also informed the $800 Annual Minimum Fee was to be paid regardless of my income. I was LIVID. Legal Zoom failed to properly advise me as a Single Member Manager LLC. However, I take full responsibility for not doing the necessary due diligence and learn more about  these landmines. As a result, I now have to pay $800 going back to 2006 plus penalties and other fees.

Take a page from my mistakes, learn to mitigate the landmines:

1. Annual Minimum Fee (AMF): No matter how you decide to be recognized (Single Member Manager, Partnership, or Corporation) or how much income earned or lack there of, the $800 AMF payment is required. So consider this before converting from a sole proprietor to LLC.:

  • Will you be profitable first year and can afford to pay the fee.
  • Convert if you are in a high risk business.
  • Don’t become an LLC, just because it’s the trend. You can always purchase Professional Services Liability insurance through an insurance agency. Compare pricing and coverage before making a choice. This will provide asset protection same as an LLC.

2. Statement of Intent (SOI): Mark your calendar. Every two years a Statement of Intent should be filed with the Secretary of State. Make note of  the Registered Agent when you receive the first SOI from Secretary of State. If you are applying to your home state, you should be listed as the agent and not Legal Zoom if you choose to go that route.

3. Form 568: Make sure to file Form 568 with every California Tax Return filing even as a SMMLLC, with or without income. It can be found and downloaded at using the keyword search form 568.

4. Franchise Tax Board Communications: FTB will not send an invoice, voucher, or notice for due payment. Every year call FTB to inquire your status and balance.

5. Dissolving a Limited Liability Company (LLC): Dissolving an LLC can be tricky. There is a process which include being cleared by IRS, Secretary of State (in Good Standing), State Board of Equalization (BOE), and the Franchise Tax Board (FTB). If either of these agencies declare your account is unsatisfactory or suspended, your request will not be granted. Which means, you must first pay any owed fees. Something else to keep in mind, the Annual Minimum Fee will continue to be due until it is dissolved.

A few years ago I would haven’t have recommended the use of Legal Zoom’s online Entity library. However, since my last experience with them much has changed and so, I would suggested visiting their site to familiarize yourself and make a more informed decision.




A Trainers Frustration

One frustration all trainers commonly share-finding a good location at a reasonable cost to host workshops. In previous years this was a huge hurdle for me, more so, because when I wasn’t hosting workshops I wasn’t generating revenue. If you are a full time trainer, without having access to adequate and a variety of venues in your database can be more stressful to a bank account.  Hotels and banquet halls are too expensive, especially if there is no cost to attend the event or more than half of the seats remain unfilled.

This is a competitive industry, thousands of trainers, hundreds in one city alone. If you’re waiting around for an organization or group to book you, shame on you. The time has come where trainers have to create their own opportunities by scheduling seminars and workshops in populated communities where you can charge a fee, get business leads, and promote services.

Thanks to partnerships and alliances, I discovered a few more these past several years and I’d like to share them with you.

1. Library. Today you can find libraries with quality meeting spaces available to community members for free, that is if you’re hosting a free workshop and it’s available to the public. If there is a fee, you are looking at a cost of $49-$65.

2. Bank. Most banks have conference rooms that seats 10-20 people for meetings or workshops. There is no cost to you, in some cases the bank will even provide refreshments.

3. Co-op Workspaces. Some may charge a small fee and others will only  allow you to use a space after work hours, weekends.

Raising Capital Today Is Making a Shift

Raising capital today is changing. Several years ago when credit was more readily available, capital appeared to be accessible to many. With the economic downturn, the business financing climate drastically changed. Small business owners and entrepreneurs began to explore non-traditional capital funding resources to start new businesses and grow existing businesses. Alternative funding options began to increase through asset based financing, crowdfunding, and more.
Crowdfunding is an alternative funding vehicle for entrepreneurs and small businesses, to raise capital from a large group of people, some of whom may be peers. Crowdfunding is used to support projects, inventions, launch a business, finance a proof of concept, pre-sell new products, finance production costs for a feature film, etc. Test marketing for new products or product lines, working capital for raw materials or inventory are other possibilities for crowdfunding. The landscape continues to evolve daily with increased innovation amongst entrepreneurs and business owners who are unwilling to accept “no” when confronted with a financial barrier. Platforms typically charge a fee of 5% or more of the funds raised. Billions of dollars are raised on an annual basis through crowdfunding.
Contrary to common beliefs, crowdfunding was introduced long before the 1990s. Crowdfunding platforms such as Kiva are still in existence today. Other platforms like Round 1 Funding, Street Shares, Fundable, have been around since the 2000s. An example of this peer-to-peer funding goes back as far as 1885. Do you know why the Statute of Liberty stands today? When the American Committee for the Statue of Liberty ran out of money for the Statue’s pedestal in 1884, Newspaper Publisher Joseph Pulitzer came to the rescue with a creative solution. He wrote an article and published it in his newspaper that resulted in about 125,000 New York residents donating $1 or less to raise the money needed. This generated $100,000 to pay for the Statute of Liberty pedestal. In thanks for the donations, each contributor’s name appeared in the newspaper. These elements are critical to modern day crowdfunding.