You don’t have to do this—survival is not compulsory. ~ W. Edwards Deming
This was going to be one interesting meeting. People began dribbling in around 6 p.m. on Friday. Not all at once; some came a distance, and others finished their workday later. By the time the assembly was complete there were thirteen church elders and deacons, two pastors—and yours truly. The purpose of the meeting? To find out what was “wrong,” if anything, with the senior pastor.
Early in the event I asked the question about profit. Now I should have known better than to use the “f” word in a meeting of church elders. They were happy to talk about “prophets” but not “profits.” But I had committed the mistake—deliberately, I might add.
“We’re a church,” I was told. “We don’t make a profit.”
With that response I went to the whiteboard and wrote two numbers: revenue and expenses. And I made sure the expenses were less than the revenue. Accounting systems usually refer to that as net profit. But this is a no-profit church.
“This $10,000 you see here at the bottom that has not been spent,” I asked, “is that a profit? It is certainly money left over at the end of the year. What do you call that?”
“We don’t make a profit,” it was repeated. After some thought: “But we can call it a surplus.”
I know when I’m ahead, and I figured “surplus” would achieve our ends. From that time forth the question was not “Should we make a profit?” but “Should we have a surplus?”
There was silence as a response to this question. Logic said “yes,” there should be a profit—sorry, surplus—but something prevented these church leaders from planning to have a surplus. Why?
I have developed a methodology that explores organizational behavior, or more importantly, uncovers organization dysfunctionality. The legal status of “for profit” or “not-for-profit” is irrelevant to this method. The “non-profit” matter has no bearing on organizational management, but is instead a legal—and therefore moral—issue concerning the distribution of unused assets, such as money.
It was my purpose in the discussion to identify the underlying problems in the management practices of this local church. I was a relatively new member, having relocated to the area, and the pastor was in a spot of trouble. He confided in me some of those issues, and I convinced him to let me conduct this workshop. He thought one evening would be enough; I said I needed Friday night and all day Saturday. I was right (on this occasion, anyway).
Understand the scene: the elders are not happy with the senior pastor. He doesn’t know what to do with the pressure they put on him, is not sure how to address the issues which, by the way, were never conveyed adequately to him. As a result, he is one very frustrated senior pastor. And they are an equally frustrated governance board.
My objective: find out if Total Quality Management guru W. Edwards Deming is right when he says 85 percent of problems are process problems, while only 15 percent of the problems are people problems. I wanted to help everyone in the room discover and understand what was causing their underlying frustrations.
The church leaders were unhappy with the pastor. Why? Was he incompetent? Lazy? Slow? Easily sidetracked onto unimportant tasks? Overwhelmed with too much activity?
On the other hand, were the expectations of the elders, representing the congregation, misplaced? Expecting too much? Unclear? Or simply never expressed?
You begin to see the range of potential problems which boiled down to either process or people. It was my objective, over the course of the workshop, to have everyone in the room agree on the nature of the problem and its solution.
But getting there is only half the challenge. (Implementing change is the other half.)
I continued the discussion covering key functionality of organizations. And I just love it, in a not-for-profit organization, when I get to the functions that in business are referred to as “functions of ownership.” These are the key activities that only business owners can do.
As anticipated, I received the usual response from church elders. We don’t have owners. We’re a non-profit organization. There are no owners.
“I’m sorry,” I replied. “You may not have owners in the legal sense, but the functions of ownership are only two, and you have them in any organization. They are inescapable.”
Inescapable? I have their attention.
“The first inescapable function of ownership is the privilege of providing the investment capital for the organization.”
Silence. They wait. I wait for them to digest this, because the second function drives right off this first one.
“Does this organization have financial needs?” They nod.
“And who provides that money?” I already know the answer but I need just one of these men to tell me: the congregation.
“You’re correct,” I said. “It is the members of the congregation who jointly fulfill the function of ownership on this point and in this organization.”
Whoa, there. Back up a little, they ask. “What, then, is our role in this organization?”
“I’m glad you asked. It seems to me the eldership of this church is to be a board of directors, acting for and on behalf of the ‘owners’ of the organization, the congregation.”
It helps if you understand how radical these ideas are for these elders. This is a Presbyterian church, and I’m suggesting that the local church eldership, the Session, is somewhat like a board of directors, and the “owners” of the church are the congregation. That does not sound like Presbyterianism. Not to these men, anyway.
In their eyes, God owns this church, not the members. And they do not see any connection between themselves and the congregation that is strong enough to solve the problems of organization governance. There are, of course, differences between church and business, but there are also similarities. On this occasion, I identify the similarities, not the differences.
My interest, therefore, is not theology in the narrow sense, even though I know theological presuppositions drive people’s responses to everything, including organizational management. My interest is to uncover what is necessary for this organization to achieve its objectives.
Here you see in the word objectives the second inescapable function of ownership. In business it is called the Return On Investment (ROI). ROI can be expressed in different forms, some of them intangible while others are tangible. Organizations need to set both kinds, but it is common in not-for-profit organizations to be very weak in setting tangible goals. Yes, we want to help the poor (intangible) but no one determines the tangible expression of that. How many of the poor do you wish to help in a given time period? Will one person every other year be an acceptable achievement of the objective?
It is the for-profit and not-for-profit organizations that set tangible goals that become successful. Here’s why.
Pick up your Bible and read from the beginning. After quite a long time, you will come to the gospels, but by the time you get there you’ll have all the Old Testament Scripture to help you understand what you read in the New Testament.
In Matthew 25 you find “the kingdom of heaven is like …” parables. The parables must be important if the Kingdom of heaven is in some way “like” this. Yeshua, the Messiah, is teaching principles about the Kingdom of heaven. He tells of a man with assets leaving his stewards different gifts; one five talents, one two talents, and the third only one talent. Five talents are estimated by one scholar as equal to a hundred years of wages, so even one talent was a significant amount. These recipients of the talents—stewards—are supposed to do something with that which was entrusted to them.
When the man returns he calls them to account, a day of judgment, a day of assessing their performance. The stewards who increased their talents were praised and rewarded; the steward who buried his talent and returned only that which had been given to him without increase is described as an unfaithful steward. God apparently intends for us to increase the talents He gives us, but He does not dictate the amount of increase. We have some leeway here.
From this parable, you can identify that stewardship, in its Biblical sense, has four very important ingredients. The first of these is responsibility. Stewardship means being allocated some kind of responsibility. The second ingredient is accountability. Somehow there is to be accountability for the steward that is related to the responsibilities given to him. Third, there must be measurement of some kind as a way of determining the accountability. Finally, there must be empowerment. The steward must be given everything he needs—tools, knowledge, skills (training), and time—to achieve the objective.
Handing back to God only that which He gives us is less than adequate, according to this parable. Therefore, people need a plan, a goal and objective—ROI.
It is the function of ownership in an organization to determine the ROI. Even in a large public-ownership company, owners do not escape this function, but it is practically handled by the owners’ representatives, the board of directors.
Our church elders were beginning to see some light. They breathe a sigh of relief when they realize it was not my intention to be Congregational and suggest church government from the congregation. The Session members were the ones who needed to set the goals and objectives—tangible and intangible—for the church, as representatives of the congregation.
“What are your objectives?” I ask.
Holding church services, prayer meetings, Bible studies, counseling for those in need. But these are not objectives, I suggest: they are activities with no determined outcome.
An objective, to be more than an activity, needs to be an accountable objective. It must be tangible, measurable. It is the tangible “number” to which people will be accountable.
In other words, it is a touchstone of the organization. And if there is no touchstone there is nothing to guide people to a successful outcome.
There is always one very important touchstone for any organization. It is the destination that allows the organization to determine if it is on course. In for-profits, it is called profit. But you can call it a surplus.
Profits, or surplus, according to management guru Peter Drucker, are “the future costs of staying in business.” Think about that. Future costs. Not those in existence now; the ones that are yet to be incurred. Repairs to the building or replacement of furniture and equipment, for example.
And not-for-profits have costs to be covered just like their cousins, the for-profit organizations.
When an organization functions at peak performance, that ROI number is broken out into different areas of the business. If the ROI determined by the business owner is $1 million, and the business can operate at 10 percent net profit (after all expenses), then there needs to be $10 million in sales. Now you can have a conversation with your sales hires: “Are you capable of selling $10 million of my product? What did you do at your last job? You only sold $2 million? What makes you think you can meet our need and sell $10 million?”
You get the idea.
Back to our elders. “What do you expect from the pastor if there is no pre-determined ROI for him to achieve? What tangible objective did he fail to meet?”
“We expected church growth from him, and we didn’t get what we wanted.”
It is now becoming clear that the church elders wanted growth—an activity. But it was not activity they were measuring. They wanted results. How many new people in the church would satisfy their expectation of the pastor? One? Two? Twenty-two? And over what period of time? They had never answered questions like these because they were never asked.
When church elders say things like this, they are like the business owner who tells their consultant, “You’re here to get me more money.”
“And if I get you one dollar extra, will that satisfy your expectation? After all, it is more money.”
The objective—church growth—is an intangible hope that needs to be expressed in tangible terms: We would like to have twenty-four new people attending church by the end of the year.
“But you can’t do that,” I am repeatedly told. “This is a church. We don’t operate like that.”
“I know you don’t operate like that,” I reply, “and that’s why I’m here. I’m here to tell you that the frustrations you have are caused by your failure to supply tangible responsibilities, hold people accountable to them, measure their effectiveness, and provide the tools for their success. In other words, you’re not managing.”
Now I have their attention.
Large, successful organizations have appropriate organizational functions that are well developed and constitute a key part of the activities in the organization. Small businesses are small because they fail this test. And when the small organization learns these lessons and implements them, it can then grow into a large organization.
So too with large churches and small churches. It is often a mistaken notion that you cannot have “business planning” in a church without compromising doctrine. And the people who tell you this are usually the ones with small churches. In other words, they use it as an excuse and a rationale for their smallness.
Here’s the underlying theological problem. Most of us don’t like accountability. It goes against our desire to be God. No one holds a god accountable except another god. Consequently, people will complain about the performance of others while at the same time providing poor excuses for their own failures.
Back to the elders and the church. I explain that without a tangible ROI they will achieve very few of their expectations. You can’t beat up on the pastor just because he failed your expectation, especially when you didn’t tell him what you really expected.
“But he knows we wanted evangelism and church growth.”
“And this senior pastor,” I reply, “has a junior pastor to manage, a seminary student working part time in youth work he has to manage, a secretary to manage, all the church department heads need some of his time, and you expect him to preach twice on Sunday, marry the young and bury the dead, and have time to visit you in your homes on occasion. When does he have time for evangelism? What will you remove from his current activities in order for church growth to take place?”
Now they’re thinking. “We appointed the junior pastor to take the counseling load off his shoulders. But it appears he’s still busy.”
“If church growth is so important to this elder board, why didn’t you appoint a second pastor skilled in outreach and evangelism rather than counseling? After all, in theory (if not in practice), ten new families tithing in the church is getting close to covering the evangelist’s salary, and then you could appoint your counselor. Then you could have had church growth and counseling, and perhaps less frustration between you and the senior pastor.”
A longer silence took place. Sometimes people need time to think … before they are willing to make an admission.
“We never thought of doing it that way,” someone eventually offered.
“Then why are you beating up on your senior pastor?”
Now a really long silence.
An organization without tangible goals and objectives is like a ship on an ocean without a destination. Is the ship going to Australia or Alaska? When do we expect to arrive, July or December? The goals and objectives in an organization determine its destination within a given period of time.
Until the crew knows the destination and the expected arrival time, they will not know when to pull the oars, which direction they should be facing, and how often they should do oar pulling. But since they need to be active, they will make up their own objectives and pull the oars anyway. And if the ship goes in circles, don’t be surprised. This is often referred to as competing agendas; it is, without a doubt, competing destinations.
Without the agreed destination there is no possibility of checking to see if the ship is still on course. If the ship is heading towards Alaska when it should be going to Australia, then it’s time to take some corrective action.
If the church is planning to get twenty-four new families in the church this year, and it’s six months down the track and they have only one family, it may indicate they’re on the wrong course. It means the activities they are doing may not be producing the results and something needs to change. Perhaps it is not the wrong activity, but rather a recognition that people are not trained to be effective in that activity.
The truth is, you can no more step around good organizational management than you can step around good farming management. Is eating important to you? Crops don’t grow without planning, planting, cultivation, and harvesting. You need to plant at the right time, pull the weeds at the right time, apply water at the right time, and harvest at the right time. If you want a crop and food on the table, manage.
Is church growth important to you? Good organizations succeed with good planning, planting, cultivation, and harvesting. If you want church growth and the expansion of Christianity, manage.
No, I am not saying you can have people converted just by managing, any more than I am saying you can guarantee the crop just by good farm management. Both require the blessing of God to be productive and fruitful—successful, using that word guardedly. There’s a place for these activities because God expects them. That’s what the parable above is concerned with.
Some people accept a two-kingdom management model: one theory of management for the business world, another for the religious world. It’s time for a one-kingdom model of management. And then get everyone to work.
Process or people? What was the problem uncovered in the workshop?
And what would you do, and how would you do it, to solve their problem?
In part 2, I’ll explore the implementation of the solution within a covenant model framework
- Ian Hodge
Ian Hodge, Ph.D. (1947–2016) was a long-term supporter of Chalcedon and an occasional contributor to Faith for All of Life. He was also a business consultant in Australia, USA, Canada, and New Zealand, and a prominent piano teacher in Australia.