An MBA’s value in the most unexpected places

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Who needs an MBA? Well, you might be surprised.

As a business columnist, economist, and adjunct professor in an MBA program, I often see the value of business principles and ideas in different situations. And I’m not just talking about owning, managing and working in a business, or making assorted career choices. Beyond such obvious cases, business thinking can be applied to situations that, at first glace, might seem distant from, perhaps even antithetical to, the business world.

Take two nonprofit areas: churches and parochial schools. I’ve been a volunteer in each, and have seen where principles of entrepreneurship and management have been applied and executed well, and where they were totally lacking.

I’ve asked a few pastors if they received any serious business training at seminary, since a church is, in certain aspects, a small business. All answered, “No.”

It was intriguing then to hear that a pastor I was acquainted with earned his MBA. The Rev. Dr. Robert Hartwell, senior pastor at Village Lutheran Church and The Chapel School, in Bronxville, New York, graduated from Concordia Theological Seminary in Fort Wayne, Indiana, in 1993, has been at his current church since 1998, and earned a Doctorate in Ministry degree from New York Theological in 2001.

While pursuing his undergraduate degree and attending seminary, Hartwell worked as an engineer and on-air talent at a radio station. Interestingly, he said, “I was tempted at one point to continue in this career after seminary, but felt a real pull to pastoral ministry. As an aside, the manager at the station I was at when I graduated seminary had been baptized at my first call. What are the odds? I took that as a sign I had made the right choice.”

So, why get an MBA (from Bay Path College) focusing on entrepreneurial thinking and innovative processes? Hartwell said, “My current call is as a senior pastor of a church with many programs and a thriving school. We have a $4 million budget and almost 100 faculty and staff members. I received no seminary training to prepare me to be the senior administrator of this scope of operation.” Later, he added: “Every area of the business world has a locus in the church world and in almost every faith community. A church is a spiritual enterprise, but is set in a corporate shell, in almost all cases, and therefore business principles are directive.”

Hartwell also spoke of the tough economy: “The church must pursue entrepreneurial endeavors to be competitive and to survive financially. For instance, I had to seek an interest-only loan period for our building debt during the recession, as well as eliminate and restructure several key staff positions. We also tried to work smarter. We outsourced pastoral counseling by bringing in a counseling center, which also provides rent and value-added services. We work collaboratively by sharing a pastor with our sister institution, Concordia College, and provide back-office support for our district office [or diocese] by placing our bookkeeper onsite at the district office half time each week for a stipend.”

It also was interesting to hear a pastor talking about “competition.” He said, “I am particularly interested in the work of Michael Porter and the helpful way he addresses the competitive forces that face modern businesses… In particular, he speaks of the threat of substitute products. There is perhaps no bigger financial or business issue for churches.” As substitute products, he cited “hyperactive schedules of families with sports and extracurricular events that crowd into holy days,” “busy schedules of parents working two or more jobs,” and other small groups that “provide ‘community’ that people once received at their church or synagogue.” Hartwell explained, “When you factor relatively inexpensive switching costs — small barriers to someone switching from you to a substitute — you have the ingredients of a real threat.”

What to do? Hartwell explained, “Understanding how your congregation brings exceptional value to lives raises that switching cost and makes it likely that your community will not atrophy… Even basic faith tenants must be explained. For instance, I may know why I value my Lutheran heritage. However, parishioners need to be retold the value.” He added that “if the switching costs are low simply because people are unaware of the value, we lose the opportunity for them to truly count the cost.”

Pastor Hartwell served up additional insights, including about running a school, gleaned from his MBA education. He spoke about the time value of money and setting tuition rates, as well as how “staffing may be the great key to great ministry.” Indeed, getting the right people in the right jobs is just as critical for a church or parochial school as it is for a for-profit enterprise.

To sum up, Hartwell declared, “The MBA gives me practical management tools that help me think outside the box.”

Hartwell also noted his desire to help others in similar positions: “I am teaching a business class this spring at Concordia and am excited to pull the strings together, and perhaps write something or help develop a program that seeks to train not-for-profit managers, NGO executives and faith leaders.” That impulse to help speaks favorably of both his faith and his MBA education.

Raymond J. Keating is the chief economist for the Small Business & Entrepreneurship Council. His new book is “Chuck” vs. the Business World: Business Tips on TV.