How the Church Went WrongThe real problem with Cardinal Law.

A flood of evidence has revealed that many bishops of the Catholic Church in America colluded to cover up hundreds of cases of sexual abuse by priests. The scandal came to a head last Friday, when the most senior American cleric, Cardinal Bernard Law, resigned in disgrace from the Archdiocese of Boston. The level of ethical misconduct in the church is as horrifying as it is irreducible. But the storm of moral finger-pointing has overlooked one key element: Much of this was caused not by Satan but by bad management.

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This is no idle problem. If the assets of the Boston Archdiocese were tallied, the archdiocese would probably rank somewhere near the bottom of the Fortune 500 companies. Cardinal Law oversees 1,653 priests and almost 3,000 nuns and monks working in over 360 parishes, more than 150 schools, and 28 hospitals and nursing homes across its 2,465 square miles. The archdiocese has an annual budget of more than $64 million. (The parishes, schools, and hospitals all have separate budgets.) It is a large and complex conglomerate, and yet its organizational decisions are made by priests and bishops—essentially a group of philosophy majors who have been thrust into the roles of CEOs and managers. Unsurprisingly, management mistakes happen all the time.

Generally, seminaries encourage students to take direction and develop initiative, but they discourage argument and questioning of authority. This, in turn, affects the way bishops run their dioceses and priests their parishes: as top-down hierarchies with little internal dialogue. But any management consultancy firm could tell you that when an executive's working circle consists of one person—or several largely uncritical people—the necessary mass of input for best results never happens. Without the corrections that come from internal dissent, not to mention the influence of outside voices, there is no way to control substandard practices. This is what happened in the Boston Archdiocese.

Ironically, Cardinal Law first came to Boston as a promising reformer of archdiocesan management structure. Cardinal Law's predecessor Cardinal Humberto Medeiros was known for poor management—he was the ecclesiastical equivalent of Jimmy Carter. He organized the archdiocese so that more than 40 agencies involved in social outreach, hospitals, cemeteries, and seminaries reported directly to him. Medeiros met with each of these agencies several times a year, more or less. Law believed he could streamline diocesan management by creating a Cabinet structure. He chose about a dozen members and a strong chief of staff, taking an approach to executive management more like Ronald Reagan's, dividing the archdiocese's key agencies into about 12 groups and appointing what's known as a moderator-of-the-curia to oversee them. The Cabinet met with Law at the chancery early each Wednesday morning.

In principle, a Cabinet structure was a good idea. With Law's restructuring, the dozen or so members of the Cabinet had more resources and responsibility, which meant greater scope for good works. From Marvin Bower to Jack Welch, from Julius Caesar to Marcus Aurelius, the best managers have always known that good management requires a forum for lively debate. The wisdom of a group always trumps individual intuition.

But Law made fatal errors in his reorganization.

Infrequent meetings between key managers and the head of a corporation spell disaster in any business; it was no different in Boston. Rather than reporting to Law, the Cabinet reported to the moderator-of-the-curia—a position much like the White House's chief of staff. The moderator is usually an auxiliary bishop who hopes for a diocese of his own and wants to prove himself to his archbishop and the folks over in Rome. Thus he has an incentive to take responsibility and deal with most of the archdiocesan business personally. Increasingly, Law's moderators had the policy-making conversations with secretaries that Law would and should otherwise have had himself. When Law did meet with his Cabinet, the discussions were largely scripted—there was none of the dialogue necessary for good management. One priest who regularly attended the Cabinet meetings said, "While [the Cabinet and the cardinal] did meet weekly, it was a set agenda and the level of interaction was low. The Cabinet secretaries met with the cardinal very rarely." As a result, the cardinal grew progressively isolated from the affairs of the archdiocese.

Jack Welch, a notorious command-and-control guy, once said, "I spend 55 percent of my time hiring the right people and the other 45 percent evaluating them." The CEO, not a lieutenant, needs to do this evaluating. Cardinal Law did not evaluate. It could be said that he trusted those below him too much, but the truth is that he was a bad manager. Good management doesn't require overseeing everyone below you intimately, as Cardinal Medeiros did. But it does require a familiarity with the policy-making debate occurring at lower management levels—such as how to deal with a "priest-manager" gone bad. Law, on the other hand, who was determined to become one of the pre-eminent churchmen in America, spent his energy on broad policy ideas and national issues such as housing for the poor, ecumenical relations, and forming better relations with Jews in the diocese.

If the problem in Boston was due to Law's poor management, why have coverups occurred in diocese after diocese? There are three reasons. First, there is a historical problem of opacity in the church's decision-making—which is, essentially, a widespread management problem. Early on, the church developed a "martyrdom complex," and even today many in the church hierarchy feel that there are powerful interests outside of the church hell-bent on destroying it. And so the Vatican and its bishops tend to reveal very little. Second, there is the "club" aspect of the priesthood. Catholic doctrine encourages people to think of priests as more than human; as a result, priests have a long tradition of not wanting others to make decisions for them—even when those others are more capable and better informed. And third, there is the issue of hierarchy and canon law: According to church principles, lay people can't tell clerics what to do. Likewise, it's usually professionally and personally foolish for a priest to criticize a bishop in public or even in private.

Can the church make significant institutional changes? Yes. Bishops should begin thinking of the church as business and not family. They should acknowledge that a parental approach of tough love and therapy for misbehaving priests does not work. They should recognize the laity as shareholders. And shareholders love transparency. At the highest level, in Rome, bishops and cardinals already consult with each other regularly. The Vatican has made a point of cherry-picking the best managers for itself, and its initiatives tend to be put together well. The pope makes personal decisions alone only on rare occasion; he has an information network perhaps better than that of the president of the United States. Now the church should take this further: Problems should be openly discussed, and the church's hierarchy made more responsive. The church should set up a mini-MBA course for bishops or at least a series of management seminars. Whatever happens, it's clear that the bishops' alternative—being three priest transfers ahead of a problem—does not work.

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