Underestimated CEO

Six months repair on the rundown Tacloban airport will alter travel plans for Pope Francis. He may be helicoptered from a nearby airport like Cebu. And he’ll spend his time, not with perfumed elite, but with victims of the Yolanda typhoon and the Bohol earthquake.

Business and economic leaders here look forward to discuss with a pontiff who, in the words of Shawn Tully of Fortune magazine, has proven to be “an elite manager who is recasting the Vatican’s troubled finances. Excerpts:

Seven prominent financiers—including  Jean-Baptiste de Franssu, ex-chief of asset-management giant Invesco in Europe to  George Yeo, former foreign minister of Singapore— got a major hint  of  a change in tradition  They were ushered, not into Vatican  ceremonial halls, but into a nondescript meeting room on the first floor  Casa Santa Marta, where  Francis lodges.

Attired in a simple white cassock and plain metal cross, Francis outlined his strategic vision, in an approach described by one participant as “highly managerial.” For his spiritual message to be credible, the Vatican’s finances must be credible as well. So, open the books and adopt strict rules to end the cycle of scandals  

“When the administration is fat, it’s unhealthy,” Francis wanted a leaner, more efficient system that’d be “self-sustaining.” That’d free up more money for his charities. “You are the experts “and I trust you. Now I want solutions to these problems, and I want them as soon as possible.” With that, Francis left the group to figure out the details.

The changes have been massive,” says René Brülhart, chief of the AIF, the Vatican equivalent of the Securities and Exchange Commission. “Francis brought in some of the biggest brand names in the world of business.

KPMG implements internationally accepted accounting standards to replace the Vatican’s crazy quilt of bookkeeping. EY (the former Ernst & Young) is scrutinizing management of Vatican’s utilities, Deloitte & Touche audits the Vatican bank.  Lord Christopher Patten, former BBC head and last governor of Hong Kong heads recasting media operations.

“When Francis puts a cardinal in charge of something, the choice is typically an outsider.” His most important appointment is Cardinal George Pell. The Australian now heads the newly formed Secretariat for the Economy, It has power over finances that no official has remotely held before. Pell “is short on niceties and brutally frank about the necessity to radically pare costs.”

Francis has a complex pragmatic view of money. “It is useful to carry out works to support humanity,” he said. “But when your heart is attached, it destroys you.”

What has been less appreciated by outsiders is the pope’s elite managerial skill set. Like a great CEO, he has the ability to set a strategic vision, then choose and motivate the right people to make it work. “His rapid overhaul of the Vatican’s finances is both one of the most unusual case studies in the annals of business and one of the more instructive.”

His lifestyle reflects   those precepts. He frequently joins the buffet line, tray in hand, at the Santa Marta dining room, where the cuisine isn’t fancy. He sidelined papal limousines and uses a simple car.  He takes no holidays. If the poor can’t take vacations, why should he?

The pontiff does not talk about balance sheets and cash flow. He leaves the numbers for the experts to crunch. . His forte is leadership. He knows that the culture of an organization is established at the top.

“He has five or six sources of information on every subject,” says Austen Ivereigh, author of a forthcoming biography of Francis, The Great Reformer. “It’s impossible to hoodwink him.”

As shepherd of 1.2 billion Roman Catholics, Pope Francis, 77, has done more in a year and a half to energize the church than anyone since Saint John Paul II in the mid-80s.

What’s less appreciated is his engagement—and success—in overhauling finances that the curia resisted for decades. “The changes are massive,” says René Brülhart, chief of the AIF, the Vatican equivalent of the Securities and Exchange Commission.

The past 15 years were a time of turmoil: from the pedophilia scandals to the “Vatileaks” affair. Pope Benedict’s butler smuggled letters to the press that warned the pontiff of corruption. Francis has no butler.

Benedict was a brilliant theologian but he was no manager. Cardinals were outraged over overpriced, no-bid contracts handed to officials’ friends in Italy and the criticism of the Vatican bank’s disclosure policies by the Italian government. “Francis ushered in professional management to a clubby bureaucracy that was expert in blocking change.”

The pope’ seeks to gradually shrink the Vatican workforce through attrition and raise more money to maintain benefits.

In February of 2014 he froze hiring and stopped formerly generous overtime payments. The plan is to move existing employees from overstaffed congregations to growth areas, such as financial management, without replacing those who depart.

The church often promoted issues that tended to divide Catholics more than unite them, as many Filipino prelates obsessed with the RH bill did. Like many bishops, they view their role thru the prism of defending doctrines against a hostile culture of secularism.

Will   Francis promising reforms continue after he leaves?

Two or three more years, then off “to the Father’s house”, he told journalists after his South Korea visit. That’s a dash in an institution that goes two millennia back to Peter the Fisherman. That is the question Filipinos fret over.