Economist: Management tips for the Catholic church

Interesting article from the Economist:

THE Roman Catholic church is the world’s oldest multinational. It is also, by many measures, its most successful, with 1.2 billion customers, 1m employees, tens of millions of volunteers, a global distribution network, a universally recognised logo, unrivalled lobbying clout and, auguring well for the future, a successful emerging-markets operation.

[…] The next pope needs to be equally radical in reconsidering everything from the church’s core mission to its customer base.

His most pressing task will be to deal with the sex scandals. This is partly a theological issue: the church would attract a very different workforce if it did not insist that all priests be male and celibate. But since the faith is growing fastest in areas of the world that are staunchly traditionalist, the next pope will probably not allow female or married priests. Still, he could learn from the private sector about how to manage the workforce he has.

First, you need to punish errant employees rather than protecting them or shuffling them about. The best companies are quick to “proactively outplace” wrongdoers. Second, you need to treat your reputation as your most precious asset by drawing up clear rules on ethical behaviour, insisting staff adhere to them and conducting aggressive public-relations campaigns. Companies that have been caught lapsing, such as Tyco International, devote a lot of effort to telling their customers and employees what they are doing to fix their problems. Third, you have to keep looking ahead. Companies hold meetings of senior leaders to review their strategies every year, rather than every century or so.

The church’s core competence lies in providing spiritual goods. Yet it devotes a lot of its energy to running an earthly operation. Some of this makes sense—schools and hospitals help fulfil Jesus’s mandate while promoting customer stickiness. But what about running an in-house bank (complete with the world’s only ATM machine with instructions in Latin)? Or managing property portfolios? Big companies like IBM and Ford have got out of non-core businesses and contracted out as much as possible to specialist companies. The church should do likewise.

Its fastest growing markets are in the emerging world. The number of Catholics in sub-Saharan Africa has increased from 1m in 1910 to 171m today, or from 1% of the total to 16%. The number in the Asia-Pacific region has risen from 14m in 1910 to 131m today, or from 5% of the total to 12%. By contrast Europe’s share of the Catholic faithful has plummeted from 65% in 1910 to 24% today. But the church remains Europe-focused. Its concession to globalisation has been to broaden the recruitment funnel for the papacy from Italy, which had an unbroken run for 456 years, to Mittel-europa. Seventy-five of the church’s 140 or so cardinals live in Rome. The Pope’s summer residence, Castel Gandolfo, is 15 miles from the Vatican.


About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar.
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