How the Mighty Fall
by Jim Collins
As churches struggle in the face of cultural shifts, How the Mighty Fall provides a very useful model for thinking about our present context and how we might respond—and how we should not respond. The five stages are outlined below. Stage 4 is perhaps the most significant for us, as it accurately describes the errors made by many churches facing decline.
Stage 1: Hubris from Success. Stage 1 starts when people become over-confident, and forget the true foundations of their success. People start to take success for granted, lose the hunger for learning, get distracted by non-core areas, and confuse their ‘Why’ and ‘What’.
Stage 2: Undisciplined Pursuit of More. The arrogance from Stage 1 leads the company to overstretch, jumping into areas where it can’t be great, or pursuing growth without the right people or resources. The company becomes obsessed with growth (to the point of losing focus and discipline), and makes the fatal error of growing faster than it has the people or resources to manage this growth.
Stage 3: Denial of Risk and Peril. At this stage, the company is still delivering results, but there are growing signs of danger. Unfortunately, leaders view the data through coloured lenses and neglect the threats. Leaders play up the positives, play down the negatives, read ambiguous data favourably, and attribute problems to external factors. Fanatical reorganization and deterioration of team dynamics and culture are common.
Stage 4: Grasping for Salvation. At this phase, the decline becomes undeniable. But the organisation’s death is not yet imminent. Leaders’ responses at this point determine if the organisation sinks or swims. Those who panic and seek quick salvation (e.g. new pastor, church amalgamation or plant) will accelerate their fall to Stage 5. Revival (great choice of word!) is only possible with a return to fundamentals, i.e. the organisation must rebuild and reinforce the flywheel once again, one step at a time.
Stage 5: Resignation to Downfall. The longer an institution stays at Stage 4, and the more its people try to find magic solutions, the faster its downward decline. Eventually, the financial resources dry up and people run out of steam. Collins calls this stage ‘Capitulation to Irrelevance or Death’. At this point, there are usually two paths a company can take: (a) give up and sell the company (or amalgamate the church), or (b) keep going until it exhausts its resources and options.
This book does not offer quick fixes or easy answers, and it is more about what not to do than what to do. But it can help us address our challenges, and adopt strategies that are likely to bring stability, and possibly growth.
The Fifth Discipline
by Peter Senge
The Ridley Centre for Leadership is about empowering others. So is The Fifth Discipline. The book is about becoming a ‘learning organisation’, where knowledge is located at all levels, and the organisation approaches its mission with a collective mindset that promotes innovation, supports change, and improves performance. It also offers a framework for personal leadership development which you can undertake with a coach over 12 months.
Peter Senge describes how companies can rid themselves of the learning ‘disabilities’ that threaten their productivity. The key learning disabilities are:
As I reflect on these, there is not doubt that many churches are afflicted by two or more of these maladies, which can be both personally and organisationally debilitating.
Instead, five disciplines promote a changed perspective that transforms leaders and organisations.
Systems Thinking. You can only understand the system of a rainstorm by contemplating the whole, rather than an individual part of the pattern. Businesses (or churches) and other human endeavours are also systems. They too are bound by the invisible threads of interrelated actions, which often take years to fully play out their effects on each other. Systems thinking fuses the other four disciplines into a coherent whole, which is why it is the all-important ‘fifth discipline.’
Personal Mastery. Personal mastery is the discipline of continually clarifying and deepening our
personal vision, of focusing our energies, of developing patience, and of seeing reality objectively.
Mental Models. Mental models are deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action. Very often, we are not consciously aware of our mental models or the effects they have on our behaviour.
Building Shared Vision. If any one idea about leadership has inspired organizations for thousands
of years, it is the capacity to hold a shared picture of the future we seek to create. When there is genuine vision (as opposed to the all-too-familiar ‘vision statement’), people excel and learn, not because they are told to, but because they want to.
Team Learning. When teams are truly learning, not only are they producing extraordinary results, but the individual members are growing more rapidly than they otherwise would have.
I recommend reading this book through once, then re-reading one discipline every couple of months so you can focus on building a single discipline at a time. Having a coach or professional supervisor support you will greatly assist you in this process.
Leading Change: Why Transformation Efforts Fail
by John Kotter
Change leadership is the most popular of the masterclasses offered by the Ridley Centre for Leadership, and this book is widely recognised as the ‘bible’ of change leadership.
Most major change initiatives generate only lukewarm results and many fail miserably. Why? Kotter maintains that too many managers don’t realise that transformation is a process, not an event. Transformation advances through stages that build on each other, and it takes years. Pressured to accelerate the process, leaders skip stages. But shortcuts never work.
By understanding the stages of change—and the pitfalls unique to each stage—you boost your chances of a successful transformation.
In my experience this is a critical lesson for church leaders, who far too often make the most basic missteps when introducing change.
The steps involved in producing successful and lasting change of any magnitude within a business organisation are:
by Karen Berman and Joe Knight
If you don’t want your treasurer or CFO to be running your organisation, then you need to understand finances. Financial Intelligence is a great primer that will help you to interpret financial statements, to budget, and to ask meaningful questions.
Developing your financial intelligence is about developing four distinct skills:
Understanding the foundation. Leaders who are financially intelligent can read an income statement, balance sheet, and cash flow statement. They understand the difference between accrual and cash (and the disadvantages and advantages of both), and why the balance sheet balances. The numbers no longer scare or mystify them.
Understanding the art. Finance is an art as well as a science. It is an attempt to quantify what can’t always be quantified, and so must rely on rules, estimates, and assumptions. Financially intelligent leaders are able to identify where the artful aspects of finance have been applied to the numbers, and they know that applying them differently might lead to different conclusions and new opportunities. This enables leaders to question and challenge the numbers when appropriate.
Understanding analysis. Once you understand the foundation, and have an appreciation of the art of finance, you can use the information to analyse the numbers in greater depth. Financially intelligent managers don’t shrink from ratios, and they know which ones matter (especially in a not for profit). Using these analyses to inform decisions, results in better decisions being made.
Understanding the big picture. Finally, numbers can’t and don’t tell the whole story. Financial results must always be understood in context—that is, within the framework of the big picture. Factors such as the economy, the competitive environment, regulations, changing customer needs and expectations, and new technologies all affect how you should interpret numbers and make decisions.
Blue Ocean Strategy
by W. Chan Kim and Renée Mauborgne
This book is built on an intriguing paradoxthat the only way to beat the competition is to stop trying to beat the competition. In church-land this translates tounderstanding that the key to growth is to stop doing what everyone else is doing, and to innovate. We need more diversity, not less, as we seek to reach an increasingly diverse and complex nation.
With this translation in mind, we can ignore the talk of ‘markets’ and ‘competition’ and use the key thesis of the book to stimulate our thinking and steel our resolve towards taking risks and being creative for the sake of the gospel.
The authors make five key points, all of which can be easily translated into the church context:
The Red Ocean is the highly competitive space where most companies operate. A Blue Ocean Strategy is about breaking away from the competition and operating in your own space—a blue ocean. Successful blue ocean companies follow a different strategic logic that the authors call Value Innovation.
Translated, this means we need to stop emulating ecclesial models that produce more churches that look just the same. Blue Ocean Strategy will stimulate your thinking, motivate you towards being creative, and provide a model for becoming an innovative organisation.
You can read more on Blue Ocean Strategy at https://hbr.org/2014/05/blue-ocean-leadership