wfn.org | ELCA Publishing Board Adopts Strategic Plan, Hears Finances

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Improved
ELCA NEWS SERVICE

October 31, 2003

ELCA Publishing Board Adopts Strategic Plan, Hears Finances Improved
03-197-JB

     MINNEAPOLIS (ELCA) -- The board of trustees of Augsburg
Fortress, the publishing house of the Evangelical Lutheran Church
in America (ELCA), adopted a strategic plan aimed at making the
company fiscally sound and recognized as a significant ministry
within the church.  The board also learned that the company's
financial outlook is improving.
     The trustees met at the Augsburg Fortress corporate offices
here Oct. 23-25.
     The strategic plan identifies Augsburg Fortress' vision,
strategic directions and objectives, values statements,
strategies, strengths and weaknesses, opportunities, competitive
and environmental analyses, future plans and financial
projections.  The plan was proposed for board action by the
publisher's management team.
     Reviewing the plan is the "most critical function of the
board," Beth A. Lewis, Augsburg Fortress president and chief
executive officer, told the board. "This is where we need the
board's help."
     "The adoption of a strategic plan increases the level of
partnership between Augsburg Fortress and the ELCA," said James
"Jim" Myers, board chair, Kailua, Hawaii.  "Our plan will make us
a better partner and a stronger financial partner."  Company
leaders have looked at the publisher's strengths and weaknesses
"honestly," with the purpose of making the company's outreach
stronger, Myers said.
     In a brief executive session, the board evaluated the work
of Lewis, who began work in her role Sept. 1, 2002.  The board
affirmed her efforts to turn the ministry around with a standing
ovation, Myers said.
     "What a change Beth Lewis has brought to Augsburg Fortress,"
Myers said.  "Everyone is moving in the same direction.
Attitudes are so different.  One person sent me an e-mail and
said 'what a difference one person can make.'"
     In a report to the board, Lewis said in her first few months
as president and chief executive officer, she set out to improve
communication and accountability, and she asked customers and
former customers to give the company some "grace."
     "We've come a long way, and we have a long way to go," Lewis
said in her report.  Referring to Augsburg Fortress as "the
ministry of publishing within the ELCA," Lewis said the company
wants members to better understand the connection the publisher
has to the ELCA.
     Augsburg Fortress is working to build partnerships through
regular communication with constituents and churchwide partners,
and it has offered its meeting space here and in Philadelphia --
home of its Ecclesiastical Arts Studio -- to church groups that
want to use them, she said.  Lewis said she is "delighted" with
the response.
     "This 'ministry of hospitality' is another way we are
improving communication," she said.
     Augsburg Fortress is using a "Balanced Scorecard" management
system of accountability for all programs and employees.  The
system includes "a common set of objectives" for all, she said.
     Lewis credited her management team and Augsburg Fortress
employees for their work to turn the company's fortunes around.
     Since 2001, the company has improved its financial situation
considerably, said George W. Poehlman, Augsburg Fortress vice
president for finance.	He reminded the board that Augsburg
Fortress suffered a $7.17 million loss that year.
     While the financial status of Augsburg Fortress is
significantly better, it is unlikely the ELCA publisher will
reach the break-even point this year or next, the board learned.
Through September, the company's net loss for 2003 was $1.67
million, nearly $1.2 million better than at the same time one
year earlier, Poehlman said.  The net loss is "very close" to
projected figures, he said.
     The board gave preliminary approval to management's proposed
2004 budget.  Based upon a sales forecast of $44.6 million,
management proposed a $25.5 million operating expense budget.
The proposal projects a net loss of $272,000 for 2004.	It
anticipates an increase in sales of $1.8 million, while aiming to
keep the company's operating expenses under control, Poehlman
said.
     "We've done a lot in the last three years on expense
reduction," Poehlman said.  "But we're getting to a place that
with further expense reduction, we're going to have to reduce the
scope of our product offerings."
     Critical to the publisher's success in 2004 will be sales of
five items, Poehlman said.  They are: a new Vacation Bible School
resource, "Davey and Goliath's Camp Creation: A Super Gospel
Celebration"; "Witness," a Sunday School series; worship supplies
to congregations; programs designed to raise funds for
congregational ministries; and new worship resources in the
ELCA's "Renewing Worship" series.
     The board also took action on or learned about other matters
of interest:
     + It lowered the percentage to be used in calculating the
pension benefit formula for employees hired after Jan. 1, to
reduce the funds the company must contribute to its defined
benefits plan.	Some board members expressed concern for the
reduced benefit and how it may impact hiring in the future.  But
others endorsed the proposal as good for the long-term financial
health of Augsburg Fortress.  Some board members raised concerns
that Augsburg Fortress employees join the ELCA pension plan,
since the publisher is a churchwide unit.
     + Subscriptions for The Lutheran, the magazine of the ELCA,
continue to decline, said the Rev. Barbara R. Rossing, board
member, Chicago.  Rossing, who represents the the board on the
magazine's advisory committee, said many in the church support
the magazine and are concerned about the decline.  Presently, the
magazine has 444,495 subscriptions.
     The board also discussed a unique proposal presented to the
advisory committee for The Lutheran, in which the churchwide
organization could provide the magazine to church members at
reduced costs, said James M. Huber, publishing director for The
Lutheran, Augsburg Fortress.  Such a plan could be beneficial to
the ELCA, he said.
     "It will be worth the investment," said the Rev. Steven L.
Ullestad, bishop of the ELCA Northeastern Iowa Synod, Waverly,
adding that members would "learn about the wonderful ministries
of the church."  Ullestad is the board's advisory bishop.
     + Board members adopted and signed a "Board of Trustees'
Covenant," in which they pledged to share and accept their
responsibilities to provide strategic oversight for Augsburg
Fortress and advocate for the ELCA publisher.
-- -- --
Information about Augsburg Fortress Publishers can be found
at http://www.augsburgfortress.org on the Web.

For information contact:
John Brooks, Director (773) 380-2958 or news@elca.org
http://www.elca.org/news