Communication, Marketing Vital, Says ELCA Publishing Head

MINNEAPOLIS (ELCA) -- Better communication and marketing, improved accountability and "grace" from customers are three keys to turning around the fortunes of Augsburg Fortress, the publishing house of the Evangelical Lutheran Church in America (ELCA). Those were the remarks of Beth A. Lewis, who became president and chief executive officer of Augsburg Fortress Sept. 3, in a report to the board of trustees which met here Oct. 24-26.
Lewis said she has been doing a lot of listening since she assumed her new role. She just completed the "2002 Asking for Directions Tour" Sept. 29-Oct. 17 through several Southeastern and Midwestern states to listen to comments about Augsburg Fortress from church leaders and others. Lewis began the tour at her former home in Boca Raton, Fla., and concluded it here at the corporate offices of Augsburg Fortress.
Customers challenged Augsburg Fortress to communicate better, to come up with a coordinated marketing strategy and to earn back the trust of customers, Lewis said.
"The trip was an energizer for our organization, which has been through tough times in the past few years," said Lewis. Customers commented on a wide range of concerns, including the content of books the company published and the type of clerical shirts it sells, she said.
From comments she heard, Lewis said a major challenge for Augsburg Fortress is to test different products in the market before they are published and launched. She said she also learned that products it introduced were sometimes removed from the market too early. In the church it's common for congregations to learn about new educational materials from other congregations, she said. It takes time for "word of mouth" recommendations to get around, which can increase sales, she suggested.
ELCA synod resource center directors "are a group of people we really need to cultivate," Lewis said. During the Asking for Directions Tour, she met personally with several resource center directors, and said they are important "networkers" in the church. "I'm getting to know these folks," she said.
Staff morale is a significant concern, she said. "I want to bring joy to Augsburg Fortress," she said. To boost morale, Lewis has met personally with 120 out of 277 employees and hopes to complete meetings with all staff soon.
The company will launch a new program for employees called "Balanced Scorecard." The program will institute "goals for each employee that are measurable and specific," she said. "We need to make certain each and every employee understands their obligation and commitment, and that we're all going after the same goals," Lewis said.
Lewis said she will meet with employees responsible for various marketing efforts in the company to improve marketing coordination.
The company needs to earn trust from its customers, she said, and she asked board members to help communicate new directions for the company.

FINANCES BETTER, BUT STILL NEED SIGNIFICANT IMPROVEMENT
For the first nine months of 2002, Augsburg Fortress' operating loss was nearly $1.8 million, about $2.4 million less than the loss the company experienced for the same period in 2001, said George W. Poehlman, vice president for finances, in a report to the board of trustees. What is hurting the company's bottom line this year is a drop-off in sales, which are about $2 million behind this year's forecast so far, he said.
Despite the decline in sales, Poehlman said a hopeful sign is that the company's expenses are under control. Through September, Augsburg Fortress' expenses have been reduced $4.4 million over the same period in the previous year. By year's end, expenses could be reduced as much as $5.7 million over 2001, he said. Fewer employees and reduced inventory are among reasons for the expense reductions.
"Through July, we weren't looking too bad," Poehlman said. "But in August, sales of the Sunday School materials did not come through for us." In addition to drops in sales of educational materials, sales of worship materials are also down, he said. Sales of educational and worship materials are key to the company's performance, Poehlman said.
"We are not doing as well as we had planned, but we have made significant progress from last year," he said.
Poehlman offered some budget suggestions for 2003, including a reduced sales forecast and further reductions in expenses. The company should also do what it can to lift a freeze on employee wages, he added.
After discussions about budget procedure, the board of trustees adopted a resolution that the proposed operating budget for 2003 be based on specific goals and objectives. They are: stabilize sales at $45 million; cut operating losses to about $950,000; improve cash flow; control inventory; implement the Balanced Scorecard methodology; and unfreeze employee wages.
Poehlman said he hopes the operating loss for 2004 can be reduced to zero. To reach that, sales must be at least $50 million to break even, based on the way the publisher is presently organized, he said.
"By 2004 we've got to have solid plans in place to start to increase sales," Poehlman said. "If not, then maybe we have to look at some plans for the publishing house to slim down."

INVENTORY REDUCED, NEW WORSHIP MATERIALS AVAILABLE SOON
+ Inventory levels have been reduced by $1.7 million for the first nine months of the year, said Bruce Keil, vice president for operations. The company will achieve a goal of reducing its inventory by $2.5 million by year's end, he said. For 2003, the company will work toward reducing inventory levels another $2 million, he said.
+ The first four volumes of the "Renewing Worship" series will be in print by December, said the Rev. Martin A. Seltz, acting general manager for worship and music. Renewing Worship is a five-year project that will result in new ELCA worship resources.
+ "Ready, Click, Grow Your Faith,' will be launched in January, said Bill Huff, general manager for congregational resources. Ready, Click, Grow is a Web-based congregational ministry resource series designed to help members and non-members enhance their faith using the Internet.
+ The Rev. David L. Miller, editor of The Lutheran, the magazine of the ELCA, has been recommended for renomination by the magazine's advisory committee, in consultation with the ELCA presiding bishop, said Janice M. Bowman, board member, Thousand Oaks, Calif. Bowman is the board's representative to the advisory committee for The Lutheran. According to the ELCA Constitution, the recommendation is to also be reviewed by the ELCA Church Council, the church's board of directors. If it agrees, Miller's nomination will be transmitted for consideration to the ELCA Churchwide Assembly, which meets in Milwaukee next August. Miller was elected to his first four-year term as editor at the 1999 Churchwide Assembly in Denver.
+ The board of trustees participated in the ELCA strategic planning process, led by the Rev. Charles S. Miller, ELCA executive for administration and executive assistant to the presiding bishop. -- -- --
*Diana Mavunduse is a communicator with the World Council of Churches, Geneva, Switzerland. This fall she is serving as a volunteer with the ELCA News Service.

Augsburg Fortress maintains a site at http://www.augsburgfortress.org on the Web.

For information contact:
John Brooks, Director (773) 380-2958 or NEWS@ELCA.ORG
http://listserv.elca.org/archives/elcanews.html