Peter Drucker has been called “the father of modern management.” His twenty-two books, including The Effective Executive and Managing for Results, have helped shape both American and Japanese management. Another book, The New Realities (Harper & Row), will be published in June.
As a consultant and author, he was influential in the successful reorganizing of major businesses (among them, General Motors and Sears) and advising governmental agencies (including the Department of Defense). More recently he has turned his attention to nonprofit, human services organizations, including churches, and this “Third Sector” has become the center of gravity for his consulting work.
His most recent project is a set of twenty-five audio cassettes called The Nonprofit Drucker, in which he and key Third Sector leaders, including pastors, discuss the unique challenges in leading human services organizations.
After spending two years focusing on that project, he observed: “We worry these days about the decline of the family and the disintegration of the community. But there is a strong countertrend: the creation of new bonds of community in and through the Third Sector organizations. This is a purely American development without counterpart anywhere; it may be America’s most important contribution.”
To ask this respected thinker and analyst what he’s discovered about the church, the LEADERSHIP editors traveled to Claremont, California, where Professor Drucker, soon to celebrate his eightieth birthday, continues to teach management and social science at the Claremont Graduate School.
After a lifetime of studying management, why are you now turning your attention to the church?
Let me correct two common misunderstandings.
First, your question shows that you, like most everyone else, think of the word management as business management. Many people are surprised to find out that for thirty-five years I have been working with nonprofit institutions-hospitals, schools, charitable organizations. They’ll ask, “What do you do for them? Advise them on fund raising?” I reply, “No, I don’t know a thing about fund raising. I teach them management.”
Thirty years ago, many nonprofits were contemptuous not only of the word management but even of the concept. They said, “We don’t need management. We don’t have a bottom line.”
But now they all know that nonprofits need better management precisely because they don’t have the discipline of the conventional bottom line to measure effectiveness.
Second, as far as I’m concerned, it’s the other way around: I became interested in management because of my interest in religion and institutions. I started out teaching religion, and all of my personal experience in management has been with nonprofits-working in academia and serving on boards of everything from Blue Cross to museums.
You’ve observed that the “Third Sector” (the nonprofits) is the fastest growing segment of our society, growing faster than the first two sectors (government and business). Growing in what way?
Primarily in the number of people involved. There’s explosive growth in what most people call “volunteers”-a misleading term, I think, because they are actually unpaid staff. The Girl Scouts have 730,000 workers who give at least three hours a week, the amount of time given at which I consider a volunteer to become unpaid staff. The Boy Scouts have a similar number, and I don’t think there’s much overlap. There are one and a half million people who give time to the Red Cross, not counting blood donors. The best total estimate (from Independent Sector) is 80 to 90 million adults giving time to the nonprofits. And not only have the numbers grown, but the role has grown tremendously.
For example, I’m familiar with one Catholic diocese where twenty years ago practically all the work was done by the priests and nuns. Now the number of priests is down 50 percent and nuns down by 80 percent. Yet the diocese has doubled its activities, because it now has two to three thousand people who give at least three hours of work each week. They do everything except dispense the Sacraments. They are basically running the diocese.
That’s perhaps on the fast side of growth, but in the evangelical churches you also see the same phenomenon. I have been trying to figure out how many people give at least three hours a week just to the 10,000 churches with Sunday attendance of more than 1,000. It’s a staggering number.
How do you explain this growth?
Two ways. One is a demand answer; one is a supply answer.
The demand answer is simple. There are so many young, educated people who are struggling with ambition and isolation. They come out of a blue-collar background or a farm background and find themselves working in the jungle of Los Angeles or Cincinnati. They need something to offset that intensely competitive, high-pressure, high-stress environment. They need something that they may not be conscious of, but something that restores balance and sanity. They need community.
On the supply side, more and more churches are what I call “pastoral churches.” Their purpose is not to perpetuate a particular liturgy or maintain an existing institutional form. Instead, they’re asking what my business friends would call the marketing question: “Who are the customers, and what’s of value to them?” They’re more interested in the pastoral question (“What do these people need that we can supply?”) than in the theological nuances (“How can we preserve our distinctive doctrines?”).
These churches are growing partly because the younger people need pastoring and not just preaching, and partly because, very bluntly, people are dreadfully bored with theology. They can’t appreciate the subtleties. And I sympathize with them. I taught religion; I didn’t teach theology. I’ve always felt that quite clearly the good Lord loves diversity. He created 2,500 species of flies. If he had been like some theologians I know, there would have been only one right specie of fly. But there are 2,500!
Pastoral churches appreciate the importance of diversity.
You mentioned that nonprofits don’t have a conventional “bottom line.” What then is the gauge of their effectiveness?
All nonprofits have one essential product: a changed human being. This is a different approach from business. In business, your goal is not to change the customer; it’s not to educate the customer; it’s to satisfy the customer. Whenever a business forgets that, it’s in trouble. When GM tried to tell us what cars we ought to drive, we began to drive Toyotas.
But nonprofits aim for change. Hospitals seek to change sick patients into healthy ones. Schools aim to change students into educated individuals.
And churches . . . ?
The church has a difficult problem in that the books are not kept on this side. So far even Congress hasn’t been able to force an audit of those accounts.
But I would say the church’s aim is to make a difference in the way the parishioner lives, to change the parishioner’s values-into God’s values.
How important is it for a local church to develop its own distinctive vision?
A unified, clear vision is essential, and yet in nonprofits, you’re almost always dealing with a number of constituencies, each of which wants something different emphasized.
When you look at churches, the mission is clear. It comes straight out of the Gospels. Basically, you are to bring the gospel to all of mankind. Very clear. Very simple. Maybe the simplest mission. I’m not saying it’s the easiest, but it’s the simplest.
But the various constituencies see the specifics in sharply different ways?
This is true of all nonprofit institutions. School boards and teachers and parents and students all see different purposes for the school system. Fifty years ago, the vision was clearer: the school’s purpose was to see that students learn. The school focused on skills-the ability to read, to do the multiplication table. In recent years, various constituencies began arguing about what learning means. It was broadened beyond skills to include traits (development of character, personality, social tasks), and as a result, the unifying focal point was lost. With so many goals to accomplish, you can’t function as effectively.
Despite the conflicting visions any nonprofit faces, it has to be held together somehow. This is the pastor’s challenge with the church-to maintain the common mission. And if you don’t, well . . . one of the basic weaknesses of the mainline liberal church is that it hasn’t maintained the common vision. The leaders see the church as dedicated to social causes outside the church. But the congregation doesn’t see it that way. The result is confusion and ineffectiveness.
What are the key steps in arriving at a common vision for a particular local church?
You have to know when to say no. That’s particularly difficult for a church. But you have to admit some things are not your responsibility.
If you go to the American Lung Association and say, “Haven’t you seen those frightening statistics that 97 percent of all Americans have ingrown toenails? Why don’t you help cure ingrown toenails?” they’ll tell you, essentially, “Our interest stops above the neck and below the navel.”
And even there, they are not interested in the heart or the esophagus. If it doesn’t have anything to do with the respiratory system, I’m sorry, but you’ll have to go elsewhere.
Often people feel the church exists to take care of problems. And it’s terribly hard for the church to say no. And yet the effective ones say no. They know what their mission is, and they make no apologies for sticking to that.
I made myself terribly unpopular by saying recently, “I know the homeless have needs, and their plight bothers me too, but should your church really be in the shelter business?” It’s one thing to encourage trained lay people to go into the community and perform various services; it’s another to see these functions as part of the church’s mission.
On the other hand, I’m not consistent. I have friends in a major Catholic archdiocese who run the only schools in which local inner-city kids really learn. The public schools there are notoriously bad. And 94 percent of those kids are not Catholics and probably never will be. The archdiocese is strapped for money, and the parishes are screaming, “We need money to repair the church roof, and you put all our money into those schools for non-Catholics.” Yet I’ve been encouraging them to keep the schools open because I think that maybe this comes before repairing the roof. So I’m not consistent.
What makes the difference?
Two factors: The need is there (without those schools, the outlook for those kids is pretty grim), but equally important, the church has proven its competence. The church has demonstrated its effectiveness in teaching young people.
And the homeless? As I looked at what this particular church was doing with the homeless, it struck me as no different from what several other organizations were offering. And. the results in changed lives were zero or pretty close to it.
Saying no is tough, but it’s what makes for effective ministry in other areas.
So beyond merely recognizing a need, the key question is “Can we make a real difference? Can we minister competently?”
Need and competence are preeminent. But we must also look to see if anyone else is already doing the job. There are many groups taking care of alcoholics. I’m not saying there’s anything wrong with churches ministering to them, but to be blunt, that’s not a way most churches can make a unique contribution.
At times we all have to say, “The need is there, but this ministry is not for us.”
The church is the only organization that is not entirely concerned with the kingdom of this earth. All the others are totally focused on this side. We’re the only one with another dimension. And for that reason, many good concerns around here are not our primary focus.
Any organization can do only a certain number of things. The greatest danger for a successful organization is to take on things that don’t fit its personality.
In your books, you’ve mentioned the danger of an organization being “internally driven.” You’ve said the organization must not do just what it wants to do, but it needs to be “market driven”-adjusting to the needs of the customers. Does that apply to churches?
Yes, the church needs to be market driven. But it also needs to understand its purpose. The two things have to mesh.
If you’re only eternity driven, you quickly become bureaucratic. You lose touch with people and lose your effectiveness.
If you’re only market driven, you quickly become mercenary and totally opportunistic.
You need both. There’s nothing wrong with the Girl Scouts, but the church is not the Girl Scouts. There’s nothing wrong with the country club, but we aren’t the country club. We are a church. And we have certain things we value, that are not of value to anybody else. That’s where we should focus.
Let’s turn from the question of the church’s direction to that of the pastor’s role as leader in implementing that direction.
The key question for a leader is What can I do in this organization that nobody else can do? And several questions emerge from that: What did the good Lord ordain me for? What are my strengths? What am I good at? Where have I seen results?
Very few of us ask these questions because very few of us even know how we perform. What am I good at? We don’t usually ask that question. We’ve been trained to notice our weaknesses, not our strengths.
Schools, of necessity, are remedial institutions. When teachers meet with parents, rarely do they say, “Your Johnny should do more writing. He’s so talented in writing.” No, more likely you’ll hear, “Johnny needs more work on his math. He’s a bit weak in that area.”
As a result, few of us really know our strengths. The great teachers, and great leaders, recognize strengths and focus on them.
How do you begin to get an accurate reading about strengths, unique abilities?
There are two very simple ways. One is absolutely reliable but takes a little time. The other is about 65 percent reliable but immediate.
The 65 percent reliable approach is to ask your secretary. It’s not 100 percent reliable because the really good secretaries won’t tell you. That’s the secret of their control-they know and you don’t. (Laughter)
The absolutely reliable method is to think through what your key activities are, and every time you do something in a key activity, write down what you expect to happen. Nine months later look at what really happened. Within a year or two, you find out what your strengths are.
This method, of course, has a great link to church history. Historians continue to puzzle over one of the great mysteries of history: How to explain the sixteenth century. In 1560, two institutions dominated Europe, neither of which had existed twenty-five years earlier. The north was dominated by the Calvinist movement, the south by the Jesuit order.
In 1534 Loyola gathered the nucleus of his new order and took the vows of poverty, chastity, and obedience. In 1536, Calvin arrived in Geneva.
Twenty-five years later, Europe had been changed. Nothing in the history of the world, not even the rise of Islam, can compare with the rapid growth and effectiveness of these institutions.
How do you explain it? Both were, by 1560, large institutions, each involving thousands of ordinary people, most of them working alone. Many worked under great pressure and danger, yet there were practically no defections. Very few bad apples. What was the secret?
Now we understand it. Both Calvin and Loyola taught a similar spiritual discipline: that whenever one does anything in a key activity (they were usually spiritual activities, but not entirely), one writes it down, and then one keeps track of what happens. This feedback, whether it’s a Calvinist examination of conscience, or the Jesuit spiritual exercise, is the way you quickly find out what you’re good at. And you find out what your bad habits are that inhibit the full yield.
What kinds of things could pastors monitor?
Their intentions, their actions, and the results-whether the results were the expected results.
For instance, I may discover when I put a person in charge of a particular ministry my batting average is very high. Apparently when it comes to people decisions, I do well.
On the other hand, perhaps I find that most times I’ve started a new program, it flounders. And when I ask what I did wrong, very often I can identify the bad habit. It may be impatience. I insert myself in the activity and discourage the people delegated to lead it. If you pull up the radish every two weeks to see how it’s going, it will never survive. Or, it may be the other way, and I wait too long. I don’t build in check points early enough. This timing can be readjusted.
Or, I may recognize that I haven’t tested the idea. Again and again I see people who don’t pilot, who go from the good idea straight into full-fledged operations. It’s always good to pilot.
One of the most successful administrations in American history was the New Deal. All its innovations worked except one. The WPA was a dismal disaster. It was the only one that had not been tested in small operations. Social security had been tested in Wisconsin. The farm security program had been tested in California. So the key leaders knew the program before it went full-scale.
Church leaders also do well to start small on, say, a small-group ministry or a community outreach program before they launch a major church-wide emphasis.
Besides recognizing your own strengths and the importance of monitoring, what else does a leader need to know?
The key activities. No matter what your personal strengths are, you have to know what each key task is for your organization and make sure someone is doing each one.
Growing churches can get into trouble in two ways. Let’s say the pastor is very good at preaching and pretty good at training. But there are two other key tasks in any organization: managing money and managing people. Let’s say the pastor is not good at money-getting it and planning its most effective use. In fact, his interest in preaching, not investing money, was one reason he went to seminary in the first place. And let’s say the pastor is not gifted at direct human contact and is basically an intellectual and a communicator.
The temptation is to make one of two mistakes, either of which will kill or cripple the church.
The pastor can assume, though not consciously, that what he does well and what he likes to do are the only things that matter. The other tasks just don’t get adequate attention. That’s the lesser mistake, because at least two important things still get done well.
The mistake that really kills the church is when the pastor is conscientious and says, “I know money is important. I know people contacts are important.” And so he forces himself to do them. As a result he spends inordinate amounts of time on these things, does them poorly, and slights the things he is good at, and thus does them poorly, too.
Within a few years, you have an ungodly mess on your hands.
How do you make sure the key areas are adequately covered?
The secret is to sit down with your key associates and board members individually-not in a group-and say, “Think through the key activities of this church. What things have to be done if this church is going to be effective?”
After you sit with those seven to nine people, look at the lists you’ve compiled. In most cases, you won’t have complete congruence, but there’s such substantial overlap that it’s really unanimous. There are usually few exceptions.
But take exceptions seriously-they may simply indicate that somebody misunderstands, but they may also represent a major opportunity or blind spot in the group’s thinking.
Then call a meeting of the group, share the list, and say, “The next step is for each of you to look at all the other people in this room. Don’t look at yourself. And put down the strengths of each person. Not yourself. What is Joe good at? What is Mary’s strength? Collect the lists and compare them privately.
Again, it’s amazing how much agreement there usually is. But any dissent is important. Because if six of us see Joe as being good with people, and three do not, we need to refine the question. It becomes, What do we mean? How do we want people treated? You may need a recruiter, a trainer, a disciplinarian, or an encourager. Joe may be gracious, an excellent quality, but he can’t say no. Some people are pleasant; others are good with people. Those aren’t necessarily the same. So at times you have to be more precise about the strengths.
Likewise, being “good with money” usually needs to be further defined. Jack may be great keeping the books, but he has a tendency to forget the church doesn’t exist for the sake of finances. Now you need someone to sound the alert when the books don’t balance. He should be able to say, “We don’t have the money given the current budget,” but he should not be the one to say, “This is the wrong thing to do.” The bookkeeper should be the hair shirt, not the policy maker, because he judges by different criteria.
After you’ve evaluated strengths and key activities, then you begin matching them up, making sure each key activity is covered, and you’re beginning to build an effective team.
How does a pastor communicate vision to the congregation?
The sermon is so important. The sermon unifies. It’s the one thing we have in common. And today, you have twenty minutes to communicate the vision, to provide an existential dimension. (Forgive me if I sound like an old Kierkegaardian. I started out, when I was 19, to learn Danish so I could read Kierkegaard.)
Part of the sermon’s purpose is to make us conscious of the fact that we are creatures. That there is an existence, a dimension that is not confined by earthly experience. That there is a genuine experience that is not of this world. That there is another world, but it completely penetrates, encompasses, encapsulates this world. (It’s all right if my prejudices show here. I’ve held them for so long that they’ve become considered judgments.)
You have only twenty minutes to do this each Sunday, which is quite a challenge.
Besides preaching, how can a pastor work to implement the vision?
When you look at well-run organizations, you see that the top people sit in on personnel decisions, even at fairly low levels. That’s where the key difference is made. In corporations, it can really annoy the personnel department when suddenly the big boss appears for a meeting to discuss the promotions to general supervisor.
Alfred P. Sloan, the man who built GM, sat in on personnel decisions down to lower middle management. Not every time, but enough so that you were not surprised when, for instance, he would show up unannounced in Tarrytown, New York, and say, “I happened to be in the neighborhood, and I understand you’re meeting to decide who is going to be master mechanic here.” Simply by sitting in, he focused attention on the task, and better decisions were made.
Part of the leader’s job is to set the spirit of the organization. That doesn’t mean simply to lay out policy and plans, but to exemplify them, to pay personal attention to the areas where the vision is being worked out.
A lot has been written about the pastor’s role, and we often see the metaphor of the chief executive officer. Is seeing the pastor as CEO of the church a helpful model?
Up to a point. Yes, it’s helpful if people recognize that the pastor has to be involved in the major decisions of the organization.
But it’s not helpful if it implies the church is no different from General Motors. The church is quite different-not just because it has a different mission and different values, but also because results are within the body.
The only result that counts at General Motors is my buying their Pontiac. Even with the increased emphasis on volunteers, I don’t think anybody gives three hours a week unpaid to General Motors except those of us who are trying to make one of their cars run!
Another difference is that good pastors do not see themselves as the boss. Or rather, they do not see subordinates. They see associates. That is one danger in the CEO term. It implies we’re made of different clay.
No, the church is a partnership. And every member of the congregation is a partner, not a shareholder. The music director is a partner, not a subordinate.
Many other organizations can be run on the army model, the command model. But the church cannot. It’s a partnership. In that sense, using CEO terminology is misleading and can be misinterpreted.
We’ve talked with pastors who feel uncomfortable with the CEO model because it doesn’t represent their position. They do not feel that they control so much as they are controlled by the congregation.
This idea that the CEO is in control is Hollywood’s idea. Some CEO’S are autocratic, but many would feel the same pressures from a constituency. They not only report to a board, but a good CEO knows also the organization will outlive him.
I’ve served as adviser to the secretary of defense in a couple of administrations. One asked me, “What’s the one thing a secretary of defense has to know?”
I told him, “Remember that the generals will outlive you.”
He didn’t understand that-until years later. We ran into each other, and he said, “Peter, I wish I had listened to you. I didn’t think generals would outlive me. You can fire generals, but then you have to appoint new ones-who will be exactly like the old ones because that is their job. They behave a certain way because that’s inherent in their function.”
Any CEO who believes he controls the organization is kidding himself. The people in the accounting department control you. The people in the plants control you. It’s like Truman’s statement when Eisenhower was elected president: “Poor Ike. He’ll sit in that big office and push a button and nothing will happen!”
And that from the man whose desk declared THE BUCK STOPS HERE.
That’s the illusion. There are CEO’S who delude themselves, believing they have control. The result is either (1) they think that control is what matters and they are sabotaged by the organization, the way this secretary of defense was, or (2) they destroy the organization by getting rid of anybody who is not a puppet, and the day they leave, the whole thing collapses. What’s left is nothing but a hollow shell. That’s the worst thing you can say about anybody who’s in charge of an organization.
The successful leaders are those who know their job is to build an effective team that will outlast them. They are the servant of the team.
And, yes, part of their function is to accept the fact that many times the buck does stop with them, but that’s a burden of responsibility. Not a rank.
If the leader’s most important task is to keep the vision clearly in front of people, what are the dangers to avoid?
Valuing the wrong things. Losing the spiritual focus. Counting the wrong things, the trappings, not the essence.
Of course, this is a just as much a danger for hospitals and universities as for churches. A university can begin to see its success in how many of the alumni are making big careers. That’s not unimportant, but it isn’t the main thing. And the hospital that becomes so focused on the acclaim of the physicians can forget the needs of the patient.
And the church must also remember it will not be evaluated in this life. The rewards are not on this side.
I’ve been teaching now for almost sixty years. There was a time when I was considered a good teacher. No longer. I think I’m still adequate, but how much longer I don’t know. But at one time I think I was a pretty good one. And yet, if I had any success, it was the rare instances when I said something that really made a difference to a student. Those results are not easy to quantify. I wouldn’t know how many times that happened.
They’re fairly rare. They don’t happen every day, not even every week, and maybe not even every month. But if a year goes by without it happening, I think I wasted a year, basically, as a teacher. Not all my teaching colleagues would agree. A good many of them see their success/failure more in terms of subject competence. But that’s not the essence of teaching.
What is the essence of effective church ministry?
I’ve never had any desire to lead a church. I always knew that was one thing I would do very poorly. I don’t know how I would define success, except I surely would ask myself whether we make a difference, both in the way people live and above all in the vision of people. That’s the definition of a saint: somebody who sees reality.
The idea that saints are altruistic is a total misunderstanding. Saints are self-interested. They know what the true interest of a human being is, unlike the rest of us who suffer all kinds of delusions. Are we making a difference in the way people see what’s truly important in life?
I don’t know that you can measure this-certainly not by the bookkeeping of this world-but I’m reasonably sure that some sort of bookkeeping is going on someplace.
The key, I think, is the commitment to be available to people. You know that old proverb: “When it rains manna from heaven, you have to have a big spoon.” So when the opportunity is there, when the person is receptive, you are there and you’ve established a trust.
There was an episode in the life of Martin Luther when he was in deep despair. He went to his Augustinian prior, who said, “Brother Martin, it is a sin to be in despair.” For Martin, that was the important thing to say. What would have become of that young monk without that moment? The prior intellectually was surely his inferior, and probably spiritually, too, but he said the right word. He was available and used the moment of opportunity.
It did not answer any of Martin’s spiritual and theological questions, but it totally changed him. It was an example of effective ministry.
Copyright © 1989 by the author or Christianity Today/Leadership Journal. Click here for reprint information on Leadership Journal.
