BUDGETING & My Video Introduction to Church Finances, Accounting & Budgeting

The area of church finances and accounting is woefully neglected in many of the churches I encounter. This video introduces learning activities that can be utilized by  my clients, colleagues and students to analyze their current financial practices … and improve them.

©️Bob Whitesel 2017, used by permission only.

ETHICS & Becoming a Leader After God’s Own Heart #ChurchLeadersMBA

by Bob Whitesel D.Min., Ph.D., 2012 (excerpted with permission from The Church Leader’s MBA: What Business School Instructors Wish Pastors Knew About Management, eds. Mark Smith and David Wright, chapter title “Becoming a Leader After God’s Own Heart” by Bob Whitesel).

Today we are having the most lively ethics discussions since ancient Greece more than 2.300 year ago… – Geoffrey P. Lantos, Professor of Business Administration[i]

A Well-intentioned Misappropriation?

“They didn’t train me for this in seminary … the rules about ethical business decisions were never addressed.”

Jim, a pseudonym, was leaving the community food bank for which he had served as director. His career had been shaky from the start, but Jim felt over time he had grown into the position. Just a year before he had told me, “this (job) is where I think I’ll stay until I retire.” Now, only in his mid-40s, Jim was leaving to pursue a career in business. He had been stung by perceived ethical missteps, which eroded his credibility, and eventually eroded his support among the food bank’s board. “They didn’t train me for this in seminary,” complained Jim. “The rules for parsing verbs were explained clear enough. But the rules about ethical business decisions were never addressed.”

The ethical landscape can be a minefield for the Christian leader. Differentiating between what is appropriate and what is illicit can be daunting. Jim had learned the lesson so many church leaders learn the hard way, that high expectations are placed upon church leaders, and ethical missteps, even minor ones can be ruinous.

What was the fiscal blunder to which Jim succumbed? In the midst of trying to keep a floundering food bank afloat, he appropriated money designated specifically for food purchases and used it for office expenses. When the benefactor learned money designated for food stuffs, was now going to buy a copy machine, they demanded their money be returned. Standing upon shaky ground, Jim could not refund the money without jeopardizing the daily operations of the center. The board decided that in order to make ends meet, Jim’s salary would have to fill the gap. And thus, Jim was unceremoniously dismissed.

Jim had rationalized, that if he didn’t apply the designated money to the non-designated needs of the office, then food bank would lose its few already overworked employees. Certainly this is not what the benefactors would want. And thus, he made a judgment call. However, it was an ethical decision that the wealthy benefactors felt crossed the line of propriety. What Jim needed was some sort of system, or procedure for effectively grappling with these ethical questions.

Defining Ethics

Fred David in his seminal book on planning, tenders a common definition of ethics. David writes, “ethics can be defined as principles of conduct within organizations that guide decision making and behavior.”[ii]   This definition is good, even in its brevity, for it reminds us that ethics are not a set of hypothetical decrees, but principles that actively affect daily action and attitude. Ethics are powerful and dynamic ways of thinking that determine our choices, our actions, and our future.

In today’s world, ethics play a central role. The media is full of accounts of moral breaches of ethical behavior. And a continued barrage of ethical issues is being thrust upon businesses and churches by the pervasiveness of sexual harassment, religious prejudice, and ethnic discrimination.

Therefore, due to the dynamic and strategic nature of ethics, let’s begin our investigation with a look at how ethics are practiced in the business world. We begin with the business realm, because is it the venue where most laypeople become acquainted with ethical decision making…

Download the rest of the chapter here > Ethics_Whitesel_10.09.

[i] Geoffrey P. Lantos, “Motivating Moral Behavior,” Journal of Consumer Marketing (Arvada, Colorado: np, 1999), Vol. 16, No. 3, p. 222.

[ii] Fred R. David, Strategic Management: Concepts and Cases, op. cit., p. 20.

LEADERSHIP & MANAGEMENT: The fundamental differences & why you need both.

Commentary by Dr. Whitesel:

“Most church leaders fail because they lack management skills, not leadership skills.”

I have found church leaders are usually adequately prepared to set the vision and define objectives, but an under-prepared to manage the process to get there.

My above statements are often quoted by church leaders and students.  I think they resonate in part because in the church world there are hundreds of books on leadership. But on the corollary task of management, only a few (including two, to which I contributed chapters: Foundations of Church Administration [Beacon Hill] and The Church Leader’s MBA [Ohio Christian Univ. Press]).

To understand the differences between leadership and management read this helpful definition from Brent Gleason.

by Brent Gleeson, Inc. Magazine, 2/23/17.

Generally speaking, management is a set of systems and processes designed for organizing, budgeting, staffing, and problem solving to achieve the desired results of an organization. Leadership defines the vision, mission, and what the “win” looks like in the future. It inspires the team to embody the beliefs and behaviors necessary to take the actions needed to achieve those results.

Read more at … http://www.inc.com/brent-gleeson/the-fundamental-differences-between-leadership-and-management.html

MARKETING & Most CEOs Start Out In Which Department? Marketing! #ChurchLeadershipBook

Executive recruiting firm Korn/Ferry International has discovered that most CEOs and executives start out in the company’s marketing division.[i]

[i] Quoted in Louis E. Boone and David L. Kurtz, Contemporary Marketing, 11th ed. (Mason, Ohio: South-Western Publishing), 2004, xxxix.

For more on marketing for religious organizations see the chapter on marketing by Bob Whitesel in Bruce L. Petersen, Edward A. Thomas and Bob Whitesel (eds) Foundations of Church Administration: Professional Tools for Church Leadership (Kansas City: Beacon Hill Press, 2010), pp. 157-181).

Download the chapter here (not for public distribution, but remember if you benefit from the chapter please support the publisher and author by purchasing a copy): BOOK ©Whitesel EXCERPT – FOUNDATIONS CH ADMIN Marketing

STRATEGIC PLANNING & A Simple QSPM Grid To Assess Which Visionary’s Idea is Best

by Bob Whitesel, D.Min., Ph.D., 9/17/15.

A former student told how a congregant abused the power of “vision” to push through an idea that was not in the best interest of the church.  The student wished there could be a way to prevent persuasive forecasters from selling the church on ideas, that though they may look good in a vision, in reality are not good for the church.

Here is his observation with some comments on how to evaluate such persuasive vision-casters:

Dear Dr. Whitesel, For years ____church name___  has debated two issues. Do we build an elevator or remodel the kitchen?  The elevator ended up being built.  I remember how it all went down.  A board member gave a vision statement of why we needed an elevator and painted a picture of the future of our church and how an elevator would benefit us.  The board unanimously voted in favor and the elevator was built.”  Sincerely, ___Name of Student___

My comments:

I reminded the student about how we learned about a “Quantitative Strategic Planning Matrix” (QSPM).  Basically this is an exercise (via a grid) through which we can measure numerically which of several tactics (e.g. an elevator for a church, a kitchen remodel or teaching English as a second language) will best help a church attain a vision that is based upon a SWOT.

Basically, with a vision statement and accompanying SWOT analysis, the student could then create a Quantitative Strategic Planning Matrix (QSPM) and numerically compared the two strategies (elevator or remodel a kitchen).

See Figure 5.8 (Smith, et. al. 2011, p. 100, click to enlarge) to see a QSPM for a church that was comparing its options of either relocating or starting a new service.

FIGURE ©Whitesel Ch MBA Figure 5.8
From this figure, I think you can see that in the ecclesial world we often lack knowledge about management tools, such as a QSPM, that would allow our leaders to make better choices regarding programming.  Usually churches make decisions about programming based upon the four Ps: Proximity (a church nearby tried this program and it worked), Popularity (a new program is so popular that your church wants to try it), Propensity (a leader in the church has a propensity, or partiality for a program), or Persuasiveness (of the presenter – and what happened in this case).

All of these ways to choose a strategy would be criticized in the business world as nothing more than hunches.  This is why many of our lay leaders, who are successful business people, are bothered by our cavalier attitude to tactic selection.  If they’ve taken business courses in undergrad or graduate school, they are already familiar with a QSPM.  And thus they often wonder how we can lead such an important organization as the church without an understanding a basic principles of planning such as a QSPM.Church Leader's MBA cover

Sometimes students struggle with using a Quantitative Strategic Planning Matrix (QSPM) and think, “this looks too complicated, I don’t think I will use it.”  But, it is a great exercise for a leadership retreat.  A QSPM can give an actual rating (a number) whereby you can compare two worthy ideas and see which one better matches up with your vision.

Now, you don’t need to use a QSPM every time you have a new idea.  But, when there two competing ideas (like in the story by the student above) then it is best to use a QSPM and get an actual numerical comparison.  It can take the emotional vision-persuasion elements out of important decisions and make these decisions more balanced.

CORE COMPETENCIES & How to find them and why they matter (A Leadership Exercise)

by Bob Whitesel, D.Min., Ph.D., 9/6/15.

In other postings (and in my chapter on “Strategic Management” in the book, The Church Leaders MBA) I explain how church leaders can easily plan their organization future with a simple SWOT analysis.

When doing a SWOT analysis, my students often wonder about the difference between a “strength” and a “core competency” (CC). I explain that a core competency is a strength that is so strong, that the community basically knows your ministry by this.

Therefore, all core competencies are strengths, but not all strengths are core competencies.

(NOTE: If you need a reminder about how to conduct a SWOT analysis, here is a downloadable copy of my chapter on “Strategic Management” from the book, “The Church Leaders MBA” [as always, if you enjoy the chapter please consider supporting the publisher and the author by buying the book]: BOOK ©Whitesel EXCERPT – MBA Strategy Chpt. 5 ).

Examples of Strengths That Are NOT Core Competencies (and some that are)

So, to help distinguish which strengths are core competencies, I’ve embedded my comments (below) to another student’s question about this (with their permission).  Student comments in italics, my responses in parenthesis:

Dr. Whitesel, here are our church strengths that I think might be core competencies too. Can you give me your thoughts on this?

A significant small group program:  81% of average adult attendance is committed to a small group.
(Dr. W.: That sounds like something for which the community would recognize your church, and thus could be a core competency.)

An intimate atmosphere and setting:  Set 4 miles outside of town in an agrarian area – could appeal to some.
(Dr. W.:You may be not as well known for this unless you are on a major thoroughfare, thus not likely a CC.)

Volunteerism: A significant number of people volunteer each week.
(Dr. W.: Because this is primarily known internally, it is probably not a CC which is usually known more externally.

The Wesleyan connection: It keeps us rooted theologically and provides stability.
(Dr. W.: Again, primarily known internally, and thus is probably not a CC which is usually known more externally.)

Preaching and Teaching: We have above average preachers and teachers.
(Dr. W.: This could be a CC if it is what your church is known for [e.g. Mars Hill, MI and Rob Bell].)

Risk-taking and educated leadership: Pastor is willing to try new things and pursues further education.
(Dr. W.: A definite strength, but not maybe a CC that is widely known.)

Children’s ministry: We do it very well and it is a high priority.
(Dr. W.: Could be a CC if your church is known for this in the community.)

I think these examples can help distinguish between core competencies (CCs) and regular strengths.  You may also want to look at Figure 5.2 in The Church Leader’s MBA (p. 80) for business examples (see the downloadable chapter above).

Remember this saying: A core competency is a strength that is so strong, that the community basically knows your ministry by it.

A Leadership Exercise

Here is a exercise they can help you distinguish between strengths and core competencies (CC) by which you are know in a community. And if you are one of my students that was directed to this post, this is your follow-up assignment for the week.

Create a list of well-known ministries (give their URL) and tell us the core competencies for which they are known. (Pick ministries for which many of us may be familiar, or give us a website so we can see for ourselves).  You can also add or challenge the conclusions of others (but of course, do so in a respectful manner 🙂

I’ll start (just add to my initial list.  If you are a student, just copy-and-paste the most recent posting and add your insights below):

Mar’s Hill, Grandville, MI and its former pastor Rob Bell

St. Thomas’ Church, Sheffield, UK

  • Core competency: missional clusters (i.e. midsized missional communities or culture-specific sub-congregations)
  • http://www.sttoms.net

North Coast Church, Vista, CA

Now its your turn.

Use this exercise (above) with your leaders to sharpen their strategic skills.  Or if you are a student who was directed to this post, finish the rest of this assignment in our online discussion room.

And finally, share one paragraph telling why you think knowing a ministries’ core competencies is good for a ministry.  In other words, how can discovering a ministry’s core competencies help an organization minister more effectively?


SWOT & Is Your Church Strength Really Their Friendliness?

by Bob Whitesel D.Min, Ph.D., 9/5/15.

One of the most used planning tools by MBA students is one of the most missoverlooked tools for religious leaders.  Called a SWOT Analysis (and the accompanying TOWS  Matrix) this analysis of Strengths, Weaknesses, Opportunities and Threats allows a team of people to quickly plan an organization’s future.

I’ve written an entire chapter in The Church Leader’s MBA (Circleville, OH: Ohio Christian Univeresity Press, 2011) on how church leaders can conduct a SWOT and TOWS analyses.  You can download the chapter here: BOOK ©Whitesel EXCERPT – MBA Strategy Chpt. 5 (and if you appreciate the book, please support the publisher and the author by purchasing a copy).

I want to also share with you a common misstep.

Often when completing a SWOT assignment, students will state that an organizational strength is that “we are a very friendly congregation.”  Yet, in many cases we may be primarily hospitable to people who are “like us,” or people that we’ve met through friends.

Therefore, if you are considering listing friendliness or hospitality as a strength of your church, ask yourself the following questions to ensure it really is:

•    Do either of the characteristics above pertain to you?  In other words, are your visitors usually people “like us” in age, ethnicity and/or socio-economic level?  Or did your visitors come to your church because of an invitation from a mutual friend?  If either of these cases are true, you may be friendly; but  your friendliness may be primarily with people who are similar to you.  Paul emphasized in Romans 12:13, “Contribute to the needs of God’s people, and welcome strangers into your home.”  And Jesus made His intention that we practice radical hospitality even clearer:

Then the King will say to those on his right, ‘Enter, you who are blessed by my Father! Take what’s coming to you in this kingdom. It’s been ready for you since the world’s foundation. And here’s why:

I was hungry and you fed me, 
   I was thirsty and you gave me a drink, 
   I was homeless and you gave me a room, 
   I was shivering and you gave me clothes, 
   I was sick and you stopped to visit, 
   I was in prison and you came to me.’ (Matt. 25:34-36 MSG)

So if your church truly has a “strength” in hospitality, then it will be a pervasive welcoming of outsiders, both into your church and into your homes.

•    Or, have you ever had an outsider (perhaps a friend) visit your church as “a secret church-shopper” to give an analysis of friendliness?  Perhaps it was a relative or friend that visited your church when you weren’t there?  If you can recall such a situation, ask yourself “how did they feel?”  If they felt truly incorporated and embraced, then maybe your church does have a strength in hospitality.

•    Finally, if you do feel your church is very friendly, could it be because of its small size?  If so, what will you do to maintain this friendliness factor as the church grows?

All this is to say that I don’t doubt that there are churches out there who practice what a colleague of mine (Bishop Bob Schnase) calls “radical hospitality.” And, I don’t doubt that some of your churches have a degree of friendliness.  But, because many churches think friendliness is their strength, when it may not be so, I want to ensure you probe deeper before you list friendliness as a church “strength” 🙂

If you are one of my students, there is no need to respond to this posting.  Just keep this in mind as you prepare your lists of organizational strengths, weaknesses, opportunities and threats.

MANAGEMENT & Renowned theologian Archbishop of Canterbury sends bishops to business school for more education #WesleySem

Commentary by Dr. Whitesel: “About 10 years ago the current president of Indiana Wesleyan University, Dr. David Wright, asked me to put together a book in which business school professors would adapt their subject matter for church leaders. I recruited some of the best professors teaching in our IWU MBA program and asked them, ‘Write a chapter about what church leaders need to know about your subject.’ The result was two books. The Church Leaders’ MBA: What business professors wish church leaders knew about management was published by Ohio Christian University Press. And, Foundations of Church Administration was published by Beacon Hill publishers. Read this article about how in England the Archbishop of Canterbury also realizes that pastors are weak in management and is now encouraging them to take similar training. It should be no surprise that the first course chosen by Dr. Wright for our IWU Masters of Arts in (Ministry) Leadership was nonprofit management.”

Business school bishops,
by C. S-W, The Economist Magazine, Jan 21st 2015,

The Church of England encourages its clergy to get some management education

JUSTIN WELBY (pictured), the Archbishop of Canterbury, is a renowned theologian. But the head of the Church of England is not your ordinary church chief; he has brought extraordinary changes to the way his clergy manage their worshippers. At first glance, the archbishop’s curriculum vitae might appear to focus more on things pecuniary than pious. He spent over a decade working in the oil industry, half at the executive level. Though Mr Welby does not hold an MBA, he believes that there are benefits to bringing boardroom practices into religion, and as such supports a proposal to send 36 bishops and deans on a mini-MBA course run by INSEAD, that will begin in April…

Sending bishops to business school will kickstart a ‘culture change for the leadership of the church,’ the report says.

Read more at … http://www.economist.com/whichmba/business-school-bishops

CHANGE & The Difference Between Change and Transformation

Commentary by Dr. Whitesel: “Transformation and change are two different things. Change involves adjusting programs, people and tactics. While transformation involves reinventing the entire organization. Therefore transformation involves guiding an organizational culture into a new and healthier culture. Many leaders fail because they don’t recognize the difference and the different tools (below) required for each.

Change involves, ‘making the business case, building a coalition of leaders, getting early results, engaging stakeholders, executing with discipline’ and monitoring/adjusting results’ (p. 2-3)…

‘Transformation is another animal altogether. Unlike change management, it doesn’t focus on a few discrete, well-defined shifts, but rather on a portfolio of initiatives, which are interdependent or intersecting. More importantly the overall goal of transformation is not just executed to find change but to reinvent the organization and discover a new or revised business model based on a vision for the future. It’s much more unpredictable, iterative, and experimental. It entails much higher risk. And even if successful change management leads to the execution of certain initiatives within a transformation portfolio, the overall transformation could still fail’ (p. 3).

Transformation therefore involves, ‘flexible and dynamic coordination of resources, stronger collaboration across boundaries, and communication in the midst of uncertainty’ (p. 4).

I have made the case in the ‘Strategic Management’ chapter of the Wright and Smith (eds.) book, The Church Leaders’ MBA’ (Ohio Christian Univ. Press, 2009) that transforming churches means:

  1. Getting multiple cultures to work together
  2. In one church
  3. To reach and unite multiple community cultures.

This creates a healthy church with multiple sub-congregations respecting one another and working together for greater impact (steps to this can be found in Whitesel, ‘The Healthy Church,’ Wesleyan Publishing House, 2012).

Thus church transformation brings the Good News to a larger segment of the community – while also reconciling/uniting disparate community cultures.

For more on the important difference between change and transformation read this Harvard Business Review article.”

Read more at … https://hbr.org/2015/01/we-still-dont-know-the-difference-between-change-and-transformation

LEADERS and MANAGERS & What Is The Difference (Part 2) by John Kotter

Commentary by Dr. Whitesel: “One of the first exercises in my leadership course is to have students study the difference between leadership and management. As this article by John Kotter points out, both are required in a successful leader. Yet students seem to prefer studying leadership and overlook the critical ability to put leadership ideas into action by developing management skills too. Here in another seminal article on the importance of leadership and management, John Kotter not only talks about the difference but also how good leaders must develop both.”

Read more at … https://hbr.org/2001/12/what-leaders-really-do/ar/1