There is no such thing as failure. Richard Branson

The Catholic Company

The resignation of the pope illustrates a key lesson for budding businesses: Overzealous internationalization complicates company management.

There’s no way to avoid a discussion of the pope’s resignation this week – not only because this author holds a PhD in theology, but also because the resignation illustrates several features of globally operating businesses. The start-up industry can learn a lesson from the events that unfolded in Rome over the course of the past several days.

Nobody can doubt that the Catholic Church is a global actor. Indeed, comparisons are often drawn between the institutional structure of the Church and management structures of globally operating companies. The Vatican maintains a vast and dense network of branches around the world and caters to 1.2 billion customers, whose purchases and allegiance to the product fluctuate regionally and seasonally. The branding is unified throughout the world, but regional markets still differ. The company grows and prospers. Management is divided into national subsidiaries, with a strong holding headquartered in Rome and under a CEO with remarkable executive powers.

Customer loyalty is phenomenal, and the Church takes advantage by offering products tailored to all stages of human life. Services begin at birth, extend until death, and are emotionally charged – after all, we tend to react with heightened intensity to turning points in life. Science tells us that we desire special protection, too: We long for an explanation of the inexplicability of death and for the miraculousness of birth. The products offered by the Catholic Church are in direct competition to those by other service providers.

The market for those services continues to be extremely large. All surveys indicate that global religiosity is not declining precipitously – in contrast to the institutional allegiance to specific providers of religious services in some parts of the world (but that’s a different story). The important fact is that a lucrative market exists, and that the Catholic Church has been a major player for the better part of two millennia. If you can withstand your competition for that long, the services you offer arguably satisfy a constant demand.

Now the CEO has resigned – for age reasons, he says. He announced that he lacks the stamina to continue his job. CEOs of smaller and less significant companies would have resigned long before reaching the age of 85.

The melange within Christendom is enormous and difficult: The range of products has become too diversified, market conditions have changed because of the rise of global networks and digital change. Scandals have become more frequent.

The Catholic Church now has to confront the thorny question of leadership structures: Should it maintain current institutional arrangements? If the Church decides to preserve the strong executive powers of the papacy, it must also accept the likelihood of a non-European pope. A CEO from Latin America or Africa is becoming more likely. This, in turn, would affect the leadership culture of the Church – and not everyone seems ready to embrace change. Old institutions are often wary of transformation (this holds true for pre-digital companies as well).

The new CEO will have to replace some members of his team. They usually have permanent contracts and can only be removed from their jobs through an executive decision of the Über-CEO, the Lord himself. Additionally, Italian cardinals have turned the command center of the Catholic Church into a rather nepotistic free-for-all. Of course it’s in their interest to support a CEO who hails from Italy as well. But the Vatican’s shareholders – bishops who finance the Church through contributions from their dioceses – must prevent such a move. And the customer base must articulate their preferences as well.

The key shareholders of the Church – the cardinals who will elect the next pope – have the unique and almost revolutionary power to propel an outsider to the highest executive position. Their courage would breathe fresh air into the company. Indeed, this lesson holds true for start-ups as well. Important milestone decisions are often complicated, mentally as well as operationally. But once the decision has been made, it’s easier to breathe and think. ‘The spirit is free,’ as they might say in Rome.

Newconomy is the new weekly column for the start-up industry. It focuses on the intersection of classical and new economies and of politics and entrepreneurialism. Newconomy is sponsored by Factory, the new start-up hub in Berlin.


comments powered by Disqus
Most Read