Professor Michael Porter goes to church

Professor Michael Porter goes to church

A DW news article reported that in 2014, there were about 10,000 different faith-based churches in Ghana. You are wondering why, right? Well, the answer is simple – the church is a very profitable organization.

According to organizational theorists Daft and Armstrong, organizations exist to: bring together resources to achieve desired goals; produce goods and services efficiently; facilitate innovation; use modern manufacturing and information technologies; adapt and influence a rapidly changing environment; accommodate challenges of diversity, ethics and coordination; and create value for owners, customers and employees. Well, maybe the church doesn’t fit in all these well-defined boxes but it does for most making it an organization, and a profitable one at that.

First of all, every organization operates within an industry. For example, Toyota operates within the automobile industry and MTN in the telecommunication industry. And the one characteristic of every industry is competition. The “church industry” is not spared. 10, 000 and counting churches for about thirty to forty million people of which not all are Christians. Surely, shepherds (churches) must compete for flock (congregation). The questions is, what strategy are churches in Ghana using to compete? This is where Michael Porter, strategist and Professor at Harvard Business School comes in.

In his groundbreaking article, “The Five Competitive Forces That Shape Strategy”, Prof. Porter identifies and explains obviously five forces that should be considered when examining competition and strategy. These “powerful” five are: threat of entry; the power of suppliers; the power of buyers; the threat of substitutes; and rivalry between existing competitors.

One thing to note is that, not all five forces exert pressure on business activities in every industry, and where they do, they do so to different degrees. For example, the church industry is a service industry that does not rely extensively on suppliers. So supplier power is near infinitesimal. Also, churches do not sell their product, “The Gospel”, at a fixed price. Therefore, the congregation (buyers) do not exert any power in this regard. Consumer power may be felt in terms of numbers and depth of pockets. Since the shepherd needs flock, the flock have “choice-making authority”. Also, flock with deep pockets are like silent investors who exercise some level of power and authority.

Consider the threat of substitute. For a long time, the church has remained the dominant religion in Ghana because it provides the easiest and less stressful route to salvation. Unlike other religions that demand strict observation of rites, rituals, prayers, practices, etc., the church only demands accepting Christ as your lord and savior and therefore; attending church services regularly, praying regularly, paying tithe regularly and winning souls for Christ – occasionally. For some, change is not required. After all “we were conceived and birthed in sin” but as long as you pray for forgiveness and continue to do the activities listed above, your seat in heaven is secured and uncontested. Besides there’s so much flexibility to these demands, it’s simply liberating. Moreover, other religions just lack a competitive spirit – they’d rather sit back and let the flock come to them as if it was that simple and easy.

Threat of entry provides perhaps the most interesting analysis of the church. The industry has the lowest threat of entry in Ghana. And this is quite understandable. One of the major tenets of Christianity is soul winning. So in the minds of Christians, there are not even enough churches in Ghana – more are needed to win each and every soul of the land. In a democratic system where political parties prioritize votes above everything else, governments dare not regulate the industry, and incumbents can’t also respond to new entrants because no one wants to be seen as a stumbling block to God’s work.

Growth within the industry has inspired a unique classification. Churches are either Orthodox, Charismatic, Evangelical, Pentecostal, etc. Of course congregation is finite and churches continue to scramble for some. However, while churches are more open to corporation within the same classification, rivalry is intense amongst different classifications. Not to take a dig at Ghanaian business scholars, but the emerging concept of co-opetition (corporaton + competition) described by scholars like Brandenburger and Nalebuff would have been proposed by Ghanaian scholars if ever the church was considered a business organization.

Now, considering the five forces, the most natural question is how are churches strategizing to compete and stay relevant in Ghana? In the late 80s to early 90s, orthodox churches dominated until the advent of miracles. The blind saw, the deaf heard and the cripple walked on live television. This provided a point of differentiation that both created new market segments and drew many followers away from orthodox worship. But like every good strategy, it was quickly copied. Since then, churches compete by investing in infrastructure, adopting aggressive evangelical work, excessive noisemaking and introducing novel interpretation to scripture.

Yet, it seems the industry has hit a plateau. News reports about unscrupulous and scandalous church leaders, controversial interpretation of scriptures, and anti-church movements like Common Sense Family (CSF), just to list a few continue to draw flock away from the good shepherd. But perhaps the most troubling reason of all is the absence of the church when it comes to solving economic and social problems. In his hit song, “Things Fall Apart”, multiple Ghanaian award-winning songwriter, Kofi Kinata says, “Churches have schools but members can’t afford to enroll their children”. Therefore, the industry must quickly adapt and strategize or risk becoming irrelevant. The one strategy the industry can readily and easily adopt is Prof. Porter and Kramer’s Creating Shared Value (CSV) approach.

There are three levels to the CSV approach and this article will focus exclusively on level one: reconceiving needs, products and customers. At this level, Porter’s advice are; to rethink the business around unsolved customer problems or concerns; identify poorly served or overlooked customers; and improve lives.

A broad spectrum of people attend churches: businessmen who are in need of partners to expand their businesses; traders who are in need of an injection of cash to make more profits; the youth with brilliant business ideas but no opportunities to move from the idea stage to the execution stage; and many who cannot even afford to pay their rents and enjoy three square meals a day. These customers (congregation) have unsolved problems, poorly served and overlooked. Can churches help these people in anyway?

Instead of building multibillion churches and living luxurious lifestyles, churches can actually invest in their congregation. Consider this simple example. Scammers online have stagnated the integration of e-commerce in Ghanaian business transactions. Imagine a church empowers its creative youth to venture into e-commerce and delivery services under the name of the church (brand). On one hand, the church creates jobs for their unemployed youth and on the other hand, an e-tailing opportunity has been created for retailers in the church – a clear win-win-win situation.

Another example is that, for years’ successive governments have flirted with the affordable housing idea but for some reason this actually never gets done, or it is started and abandoned mid-way. Churches can absorb these projects and solve perhaps one of the most challenging issues in Ghana – accommodation and rent.

There are so many ways the church can use the concept of Creating Shared Value (CSV) as strategy to maintain congregation and convert non-believers. Of course there will be challenges – what is life if not a challenge. But for churches to succeed – for the industry to continue to grow, churches cannot afford to continue with their business-as-usual models. The congregation is gradually evolving and are exercising their choice-making authority. Churches that make improving the value of the lives of their congregation their priority, will thrive and become more profitable and powerful in the long-term.

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