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New Beginnings and Emerging Realities

Consolidation — Building a New Foundation


This is the third article in a series discussing the issues and opportunities associated with reconfiguration.

The decision to consolidate communities requires many qualities including foresight, courage, faith, and leadership. The factors that lead to consolidation are common — from aging communities to the need to manage the use of limited human and financial resources carefully. Although the decision process can be lengthy, once complete, it may soon become apparent that making the decision was the easiest part. Effectively integrating organizations that have adopted different operating philosophies and policies over time can be extremely challenging.

The combined needs and complexities resulting from bringing together multiple communities requires disciplined planning and management expertise. The management processes needed may be very different from techniques used when ministry revenues were greater, the community was younger, and resources were more available. In this new reality, defining priorities and carefully dedicating resources will be critical to a community’s sustainability.

This challenge by no means suggests that consolidation should be avoided or that it is not in the best interest of the greater good. It does suggest, however, that significant attention must be given to the organizational elements that will improve the chances for realizing the anticipated revitalization of mission and ministry. During the reconfiguration process, it will be helpful for those involved to keep certain considerations in mind. These include:

  • The new leadership team will typically be responsible for overseeing a complex, geographically dispersed, multi-million dollar organization that requires a significant amount of administrative time and attention.
  • Having a strong organizational structure will generally enable a leadership team to balance the need for attention to internal matters with the interest in maintaining an external focus.
  • The size, geography and operating issues of the new community, typically, are significantly greater and create more complexity than what was experienced by former individual communities.
  • The knowledge, skills, and abilities of the individuals filling management positions need to reflect the increased sophistication and complexity associated with a much larger entity than any of the former communities.
  • The structure of the organization should be aligned to address the major, specific operating priorities of the community.

Following are brief summaries of issues and opportunities associated with several of the areas that are critical to effective management in the new configuration.

Planning

Historically, the members have been energized by and committed to a common focus on mission and ministry. Establishing a set of common goals through a collaborative process with the members will help to create a unifying set of priorities that can serve to foster integration and align resources. Engaging in a comprehensive, thoughtful, and values-driven planning process will serve to provide a framework for critical decisions, such as definition of priorities, stewardship of resources, and allocation of time for the community.

Comprehensive planning requires defining priorities for the organization in the context of how leadership views the environment in which the community functions and the impact it intends to have in that environment. The planning process should ultimately consider how the new community will apply its financial, human, and real estate resources to advance its vision for mission and ministry. These areas are all interdependent. For example, developing a set of priorities for ministry without considering the availability of sufficient capital will limit the opportunity for success. Membership trends and ministry requirements should be evaluated collectively and shape the choices to be made in planning for the future. Choices regarding mission and ministry, in the context of community values, should determine where resources will be committed. Developing and following an integrated plan for the future, therefore, will facilitate a more deliberate and prudent use of resources.

Organizational Structure

A well-defined organizational structure is necessary to enable hopes and plans to be realized. An effective and efficient administration will support the needs of the community by:

  • Improving the community’s ability to administer and manage operations by having a clearly defined and documented chart of organization
  • Enhancing coordination of resources and effort by aligning like functions
  • Relieving the leadership team of excessive details by empowering management to handle day-to-day administrative matters.
  • Promoting organizational clarity by identifying reporting relationships and areas of accountability

Having a documented chart of organization, by department, with alignment of functions and responsibilities, should be beneficial in enhancing clarity of relationships and accountability. The effectiveness of the organizational structure will also be a function of the:

  • Strength and competency of the incumbents in management positions
  • Ability of these individuals to exercise authority in the day-to-day administration of their departments
  • Establishment of processes for accountability

Accounting and Finance

Typically, communities that come together have employed a range of accounting and bookkeeping systems. It is important to standardize the approach so that a reliable financial picture is available to support decisions. This will also facilitate the ability to identify opportunities to enhance the mission and common life of the community by establishing a solid and consistent reporting basis for resource planning. Developing this comprehensive financial picture will enable the community to determine how resources can be prioritized and applied where most needed. This baseline information can be effectively incorporated into financial projections that will identify cash and investments needed into the future. Having a clear sense of your financial reality is essential for making informed decisions about your future.

It will be important to determine the pertinent information that is necessary in order to analyze financial activity, monitor financial performance, and support decision making. A common tendency is to continue to track activity by the former units. Doing so may have the effect of promoting differences rather than the commonality of the newly configured community. It will be important, therefore, to determine whether sub-categories of revenues and expenses will be necessary to track historical sub-units of the new entity or if these categories can be eliminated.

Another tendency when communities combine is to create a chart of accounts with a significant level of detail for tracking expenses. Consideration should be given to determining what information will be necessary for leadership decision-making and for managing operations. It should be recognized that there is a cost to obtaining and maintaining highly detailed information. In addition to the time and effort required, oversensitivity to maintaining excessive amounts of detail can obscure the need to remain focused on major themes and trends to guide effective decisions about the community as a whole. The chart of accounts should reflect the specific needs of the community and not be unnecessarily complex.

Residential Requirements and Real Estate

From providing independent living in a central location (such as a motherhouse or monastery) to owning or renting single-family homes, a wide range of options for housing has developed over the years. Individual communities may have followed different policies, resulting in numerous real estate holdings and obligations. This can result in a cumbersome and overwhelming portfolio of assets that will require maintenance and management over the coming years. Identifying the inventory of real estate investments, including assessing current and future capacity needs, ability to support residents through the aging process, building functionality, and maintenance costs (as well as evaluating the funding for the various forms of housing) can assist in defining and following a consistent approach while minimizing costs and management resources. This analysis will then need to be considered in the context of philosophical and emotional issues associated with defining common life, and the historical association with properties that have significance to the community.

Summary

After reconfiguration, religious communities are faced with the daunting challenge of combining diverse operating practices, multiple operating units and properties, and human and financial resources over greater geographic distance while seeking to revitalize mission and ministry. In order to be successful in this endeavor, it will be necessary to:

  • Create a vision for the future by establishing priorities for mission and ministry
  • Develop an effective and efficient organizational structure that promotes accountability through definition of roles and responsibilities
  • Establish an accounting and reporting system that provides appropriate information for decision-making and is not overly complex
  • Manage the multiple properties and residential options to contain costs and provide opportunities to use these resources most effectively

It is an extraordinary challenge for any organization to address these issues effectively and quickly after reconfiguration. Therefore, the transition plan of a newly integrated community should include an internal assessment of current capabilities and the identification of the types of resources that may be required to assist in building the structural and philosophical foundation associated with establishing the newly formed community. With change comes uncertainty, but it is with solid planning and prudent use of resources, both human and capital, that a newly reconfigured community can flourish and sustain for the greater good.

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Jerry Gumbleton

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