The Lesson of Reader's Digest

Reblogger Jim Hale
Real Estate Broker/Owner with ACTIONAGENTS.NET Oregon 780301468

This is a great post from a quality blogger, J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC., in METRO NEW YORK.

The post summarizes the fall of READER'S DIGEST.

What a sad....and all too common...tale.

It would suffice as a "condensation" of our economic problems as a nation.


Publicly-held corporations are killing this country.  They are not capitalism.  The privately held companies are the real capitalism.


Original content by J. Philip Faranda License # 49FA1074963

I love my bossReader's Digest has a huge world headquarters in nearby Chappaqua, New York. I should say HAD a huge headquarters. The company quietly left the campus this past week to smaller digs in Manhattan. This represents the fall of a local giant, and the final exit of a company that was a Westchester institution. To work at Reader's Digest was special; it was one of the companies that made Westchester County unique. And now it is gone. You can still subscribe to the publication, mind you, but the Reader's Digest I grew up with is dead. 

You really should read the article to get an appreciation of how Roy and Lila Wallace ran their own privately held firm  from 1922 until they passed away in the 1980's. It was a special place that took amazing care of the employees and was loyal to an editorial vision that worked incredibly well. And it was hugely profitable. Amazingly profitable. By the time I was born in 1967 the Reader's Digest Association had a world headquarters that was like a college campus. 

In 1990, after the Wallaces had both died, the company went public. 

And the suits came in and ruined everything. The thing about running any successful business in my experience is that those who truly own the enterprise are not slaves to the quarterly profit. I myself have lost battles in order to win the war. You can't measure success in quarterly statements. Sometimes that makes you burn the axe handle. But that is just what the MBAs who came in the 1990's did, and by 2005 the black ink was gone. The company hasn't made a profit since 2005, and it went from being the sole tenant of their own wholly owned campus to a minor tenant that just got out of their lease with a bankruptcy filing. 

Like I said, read the article- it tells the tale of bad decisions, short sighted moves and strategies antithetical to the core vision of the Wallaces better than I could condense it. That is is ironic, because condensing great stories was what the Digest did. 

The lesson: those that own their own firm take the best care of it. In 2005, after busting my posterior working for others for 16 years, some of whom I adored, others that I abhorred, I opened my own firm. I can tell you firsthand that I have never worked so hard, martialed as much creativity, or been more resourceful than when I held the rudder in my own hands. This company is my baby. Having ownership makes the buck stop at my desk. I am accountable for solutions. I navigate obstacles. I have to plan and execute. And there is no safety net. When what I do succeeds, it is as sweet as it gets. When I fail, I get up again and attack, because it is all me and no one will do it for me. 

Most real estate licensees are 1099 independent contractors, and that is ownership that a w-2 employee seldom grasps. And some of us take the plunge and run our own firms, building our brand and practice on the mere capital of our good name, our good work, and our vision. That is not something to dismiss lightly. Those of us who are succeeding in this environment aren't doing so because we're lucky, as much as the fact that we are on to something. If I speak, it might be worth a listen. I am sure the suits at Reader's Digest would sure love to get a little advice from the Wallaces. 

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Maureen Fukumoto
Help-U-Sell Realty Pro - Mililani, HI

I couldn't agree more Jim. Small business is the life blood of our country.

Dec 27, 2010 03:48 AM #1
Dan Edward Phillips
Dan Edward Phillips - Eureka, CA
Realtor and Broker/Owner

Very interesting post Jim, thank you for putting it back up.

Dec 27, 2010 07:45 AM #2
Jim Hale
Eugene Oregon's Best Home Search Website

Maureen -

That is a fundamental building block of democracy.

Dan -

You are welcome.  J. Philip does good stuff. 

With similar names, I hope you guys are both fans of one another. 

You are probably already relatives.

Dec 27, 2010 12:39 PM #3
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Thanks for posting this, Jim, because I missed this blog of Phil's. Well, I've missed everybody's blogs lately because I've been so busy tromping around volcanoes.

Dec 29, 2010 04:06 PM #4
Jim Hale
Eugene Oregon's Best Home Search Website

Elizabeth -

Tromping around volcanoes.

Don't rub it in like that.

Dec 29, 2010 05:05 PM #5
Joshua Zargari
MJ Decorators Workshop LI staging and home decorating - Lynbrook, NY
MJ Decorators Workshop

Good morning Jim!

Dec 30, 2010 08:09 AM #6
Jim Hale
Eugene Oregon's Best Home Search Website

Joshua -

Thanks.  A happy, healthy and prosperous new year to you and yours.

Dec 30, 2010 10:21 AM #7
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY

Jim, thanks very much for the shout out. I hope 2011 is a great year for you. 

Dec 30, 2010 10:26 PM #8
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Jim Hale

Eugene Oregon's Best Home Search Website

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