Our business is "so unique", they said...

Even before seated as a deacon, we were warned (literally at the end of a wagging finger) that a church wasn’t a business.   I wrote this down in September of 2018 as a result of that accusation.

I had been asked to serve on the board of directors for an organization that was failing both in its mission and (as symptoms of that) financially and in terms of human resources retention.  The CEO of this organization certainly must have been aware of these fundamental failures, as he was reporting them to a larger entity in the conglomerate (the denomination).   He abruptly chose to leave in the fall of 2018 upon the election of myself and a few others to the board.    After 13+ years at the helm of the corporation, he un-apologetically left a demoralized and directionless workforce and a financial disaster in his wake.    At that same first board meeting, a long-term shareholder decided to deride the incoming board for running this "like a business" and promised the incoming board a 'reckoning'.

Unused, stagnant capital in a business is a dangerous sign in all firms.   Growing businesses are always looking for capital - in the form of venture capital help (e.g. debt), stock sales, owner equity, etc.    This business was sitting on cash in the amount of 3-4x its annual top line revenue number while it's revenues are decreasing  year-over-year (to the point that it had to cannibalize those same 'savings' to pay the CEO and ongoing operations) and it's customer base had been obviously eroding (over a decade).  All these are clear signs of management's inability to deploy capital in effective ways.   Even a solid retrenching strategy needs to plan for returning to growth at some point.   OR - there should be a liquidation strategy.    No strategy was in place or communicated by the exiting CEO or his people.   Great pains appear to have been taken to hide any/all records of the previous 10+ years of decision making from the incoming board as well.  Paperwork was literally missing, or kept in private houses.

The organization has enormous other issues, including:

1. 20+ years of facilities being ignored or worse.  No smoke detectors in the main production facility.   Literally our offices have more than a dozen broken windows, 20+ year old flooring, leaks where they should not be, tooling that has water damage from a flood but was not replaced with insurance money for that purpose, unfixed termite damage, aging paint on the walls, electrical systems that weren't properly grounded, plumbing systems that would not drain, and in one case the inattention led to an electrical fire that one of the other board members saved from burning down the building (because there were no smoke detectors to stop it), etc. 
2. Human resources who have not been adequately trained and/or assigned work.  It is simply so that every organization needs sales and/or marketing.   It is wholly ineffective to simply be inside your facility all the time making “product” but not selling it.   Or in the case of a church whose product is “disciples” the disciples need to leave the building to make MORE disciples.  They won’t do that without training. 
3. Human resources who are simply unaware of the organization's mission.   When the CEO left, several of "his people" left with him.   Why?   Because they were following that guy, and not the mission of the organization they hired into.  That organization's mission is unchanged.     Since this CEO was entering retirement, those people are largely letting their considerable skills "ride the bench" now while the organization still has a great deal of work to do. 
4. A culture of allowing workers to be insubordinate, even to the point of committing sabotage.  We're not talking about the usual Monday morning blowing off of steam, folks. For example:
1. We've had a shift lead who was vocally unhappy with the new way we were fixing up the production line, so she decided to have a 'sick out' in protest the day before our second largest production of the year (Christmas Eve).   This is after we made special arrangements for her machines and her workload that day months in advance - with her in those same planning meetings.
2. We've got another worker who openly uses foul language to describe the board of directors and her fellow workers during the weekly motivational staff meetings. 
3. We've got another worker who has had a loud demonstration and went on strike in front of the company provided childcare during work.   This was intended to cause embarrassment because several of our business partners had brought kids to a big joint meeting that day, so we were left to scramble so that meeting could go on. 
4.  For several years the organization's treasurer was writing checks to herself and her son without tax treatment of any kind.   It's less than clear if any work was being done by the son who was billing himself as a subcontractor starting an off-shore office.  
5. In the latest board meeting to which the shareholders were invited, a former shareholder created such a scene that two other shareholders called the police.    
5. The balance sheet of the organization does not include its most valuable tangible asset (real estate assets). 
6. The budget:
1. Failed to address sales/marketing in any organized way.  
2. Contained no work/resources for research and development, or workforce training.   
3. Was heavily (~50% of actual annual expenses) based on paying the CEO, who was part-time.
4. There was actually no line item in the budget for regular production costs, including training and recruiting new staff.    
5. There was no line item for making large capital investments to improve (or build new) facilities in any meaningful way.  This of course limits production to what it was 50+ years ago, using outdated tooling and equipment - and makes hiring new workers even more difficult because of the outdated machinery. 
7. Operations had been running far in the red for several years.   There had been a 10+ year drop in HR retention and top line revenue, yet tricky accounting was used to hide the grave condition of the firm from the workers and shareholders.  Remaining HR resources were asked to perform more and more work without training or accommodation, which led to increased stress.   This included not providing balance sheet information to the stakeholders at any time.  Self-reporting on key metrics (HR retention, new hires, training efforts) was done using very optimistic forward-looking numbers, if it was done at all.  
8. The outgoing CEO and "his people" attempted to poison the well against the incoming board of directors.   It was partially effective, meaning that while the above several issues were easily evident and obvious on paper, huge efforts had to be made to establish trust so that stakeholders could be persuaded of the plain facts.    A merger effort is now underway to save the workers' jobs and the facilities as a unique landmark in the town, but several of the more seasoned workers are resorting to outrageous behaviors to stop that merger.   
9. An abject failure in reaching a new customer base.    The potential customer base has grown 10X in the past 15 years or so, and is easily more affluent and able to afford the time and expense - in fact this organization has shrunk in spite of “Boom times”. 

I'll be writing more about the turn-around efforts of this firm in the coming days and weeks.    And I'll explain why this (or any) church HAS to be run in some ways like a business or it will die.    And if  I can make sense of it, I’ll also explain what the heck this has to do with me becoming Reformed in the process.