THE Roman Catholic church is the world’s oldest multinational. It is also, by many measures, its most successful, with 1.2 billion customers, 1m employees, tens of millions of volunteers, a global distribution network, a universally recognised logo, unrivalled lobbying clout and, auguring well for the future, a successful emerging-markets operation.

But as the cardinals gather in Rome to elect a new boss the church is in turmoil. The pope has no shortage of crisis-management tools at his disposal, including the doctrine of papal infallibility. But Benedict XVI spent his papacy either provoking unnecessary crises (such as welcoming back Bishop Richard Williamson, a Holocaust downplayer) or struggling with the sex scandals that are racking the church. This is partly because he was the wrong man for the job: a scholar where an administrator was required and an old man—78 when he was appointed, 85 today—where youthful vigour was needed. It is also because the problems tearing the church apart require sweeping structural reform of the sort that only a great leader can deliver.

To be fair, Benedict has laid the foundations for just such a reform. His decision to retire establishes the revolutionary principle that being pope is a job, rather like being the boss of a company, that demands that you have all your wits about you. It also gives the cardinals more freedom to choose the next pope: they can elect a younger man knowing that a limited term is an option or an older one knowing that he will not feel obliged to die in office. Benedict has characteristically fumbled a good idea by insisting that he will continue to live in the Vatican and share his private secretary, Georg Gänswein, with his successor. But his decision is pregnant with possibilities. The next pope needs to be equally radical in reconsidering everything from the church’s core mission to its customer base.

His most pressing task will be to deal with the sex scandals. This is partly a theological issue: the church would attract a very different workforce if it did not insist that all priests be male and celibate. But since the faith is growing fastest in areas of the world that are staunchly traditionalist, the next pope will probably not allow female or married priests. Still, he could learn from the private sector about how to manage the workforce he has.

First, you need to punish errant employees rather than protecting them or shuffling them about. The best companies are quick to “proactively outplace” wrongdoers. Second, you need to treat your reputation as your most precious asset by drawing up clear rules on ethical behaviour, insisting staff adhere to them and conducting aggressive public-relations campaigns. Companies that have been caught lapsing, such as Tyco International, devote a lot of effort to telling their customers and employees what they are doing to fix their problems. Third, you have to keep looking ahead. Companies hold meetings of senior leaders to review their strategies every year, rather than every century or so.

The church’s core competence lies in providing spiritual goods. Yet it devotes a lot of its energy to running an earthly operation. Some of this makes sense—schools and hospitals help fulfil Jesus’s mandate while promoting customer stickiness. But what about running an in-house bank (complete with the world’s only ATM machine with instructions in Latin)? Or managing property portfolios? Big companies like IBM and Ford have got out of non-core businesses and contracted out as much as possible to specialist companies. The church should do likewise.

Its fastest growing markets are in the emerging world. The number of Catholics in sub-Saharan Africa has increased from 1m in 1910 to 171m today, or from 1% of the total to 16%. The number in the Asia-Pacific region has risen from 14m in 1910 to 131m today, or from 5% of the total to 12%. By contrast Europe’s share of the Catholic faithful has plummeted from 65% in 1910 to 24% today. But the church remains Europe-focused. Its concession to globalisation has been to broaden the recruitment funnel for the papacy from Italy, which had an unbroken run for 456 years, to Mittel-europa. Seventy-five of the church’s 140 or so cardinals live in Rome. The Pope’s summer residence, Castel Gandolfo, is 15 miles from the Vatican.

Look south, Your Holiness

The case for appointing a non-European pope is strong. But the church needs to go much further. Cisco created a second headquarters in Bangalore—Cisco East—that spearheads much of the company’s emerging-markets strategy. The least the church could do is to move the pope’s summer residence to Latin America. Many global companies establish centres of excellence across the world. The church should likewise move some of the Vatican’s departments, such as the ones that oversee missionaries or development, to developing countries. This would not only allow the church to plug into new ideas from Latin America and Africa; it would also help to discipline the introverted, back-biting, scandal-plagued and generally dysfunctional culture of the Curia.

The church cannot take its success in the global South for granted. It is under pressure from lean start-ups with more vigorous marketing. Its market share in Latin America has declined from 90% in 1910 to 72% today, thanks to the growth of Pentecostalism. The Latin American church is responding by borrowing Pentecostal techniques such as holding “liberation masses” in soccer stadiums and allowing priests to speak in tongues. But Benedict refused to meet Marcelo Rossi, a charismatic priest who has sold more than 12m CDs, during his visit to Brazil. Jeff Immelt, the boss of General Electric, says his firm needs to disrupt itself with new ideas from the emerging world if it is not to be disrupted by emerging-world rivals. The next pope, likewise, needs to understand that he is not just the bishop of Rome.

Economist.com/blogs/schumpeter