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There are lessons to be learned from a business icon. Excerpts from an article by Catherine Wilson.

Reader's Digest - a name that needed no further introduction anywhere in the world! Now it is gone forever.
It sat in every waiting room across America. It represented knowledge and everyday life. Everyone could improve their language skills in the Word Power section. Workers could relate to the anecdotes in the All In a Day's Work section. Home owners could get helpful hints on repairs.
Parents could count on it for children's health and education issues. The condensed articles on every subject were enlightening.
Readers Digest was the first to draw attention to the link between smoking and cancer in the 1950's.
Readers Digest financed Alex Haley's research for Roots and extraordinary novel and revolutionary TV series.
Millions pf people around the globe saw the Digest for what it was, a magazine that acknowledged ordinary individuals and honored their achievements. In an era of celebrity mania Reader's Digest celebrated the life of the ordinary person.
That's not to say it wasn't without controversy. The magazine served a strong conservative agenda often fronting ideas and platforms for Republican candidates to American voters. In 1988 a staff writer for the Digest wrote an article entitled "Getting Away WIth Murder"about a prison furloughy program in Massachusetts that released a murderer, Willie Horton. That srticle was released during the presidential campaign of Massachusetts Gov Michael Dukakis effectively ending his race for the Presidency.
The Digestalso published segments of Sen Newt Gingrich's Contract With Americaseveral months before it was unveiled to COngress by Republicans. The Digest[/band the Republicans hd several months to "test the waters" and the reaction of the American population to this contract before it's official release, six weeks prior to the 1988 Presidential elections.
Reader's Digesthad a subscription base of over 18 million and twice that amount around the world. It was the largest read magazine in the nation. It's impact on the American Heartland was unequalled.
The Wall Street Journal once reported that "only the Bible had a higher circulation rate than the Digest" That is BEFORE the Digest condensed the Bible in 1982, an act that brought death threats from the religious right to Digest executives who installed bullet-proof glass in their corporate offices for protection!
That was not the first time the Digest suffered the wrath of the religious right. In 1980 the Digest reported on the growth of Scientology: Anatomy of a Frightening Cult The Digest revealed that Scientology "agents" were breaking into Juistice Dept offices and working as CIA Agents in defense areas, drawing ire from that group in the process.
Shortly after George W. Bush was elected President, the Digestappointed the Vice President's wife, Lynn Cheney to a paid position on its Board of Directors. For decades writers and reporters were have been reporting on a possible connection between the Digestand the CIA.
THe ultimate irony came when the major target of the conservative right - Bill Clinton selected a house down the block from the Digest thereby placing the Cheney Bush - CIA - conservative camp on one side of the street and the Clinton - Obama - liberal camp on the other! The struggle for American votes was played out right in Westchester County's backyard within feet of each other.
The Digest never lost it's conservative bent but it fell out of touch with the ordinary populace. At it's peak in the early 1990's it began to follow Peoplemagazine, and started putting celebrities instead of ordinary people on its covers. Words were replaced by images and graphics and the number of articles inside were reduced. In an effort to stay revelent in a changing world, the Digesthired the now defunct Arthur Anderson Consulting firm - the same firm that "advised" ENRON and handled their audits and financials to advise them as to how to adapt to the changing environment. Sadly the Digest failed at the most basic rule of management, KNOW YOUR BUSINESS.
What the Digestand the consultants failed to realize is that their business was unique. They recognized important and ground breaking material from experts around the woprld and condensed it into simple, ordinary language to be understood by individuals in the ordinary language of the masses.
Unfortunately, what the predominately privileged young Anderson consultants failed to comprehend was the economic sonstraints of their mostly retired subscriber base whose income would not increase with the 15% annual subscription hike they recommended! DUH!!!
The extent of the Digestsubscriber base rivaled the capability of some small governments. It's computers had a data bank of names, addresses and sonsumer information that was second only to the US Government and American Express.
A new round of managers were brought in, on the advice of the Anderson consultants, mainly individuals from major corporate publishing conglomerates. THese new managers sought to take the Digest into unknown territory such as television producing, forsaking their company base of loyal subscribers. However, thanks to billions in cash in the company's coffers to fund these exploits, the impact on the company was not immediately noted by most of the Wall Street analysts. In 1990 only one anlaysts correctly determined that the growth in the company's bottom line in prior years was due to favorable currency rates aqnd not from growth in subscribers or product sales. All the other anaylsts voted the Digest stock "a buy"
In 1993 the stock price was 51+. It fell to a low of 16 in 2007 taking with it the value in the 401K accounts of the Digest employees with it.
On August 2009 the Digestannounced it was declaring bankrupcy, a move that will allow it to reorganize the company and renegotiate with it's creditors. Hopefully this move will be successful and allow another generation of readers to test their wits at Word Poweror laugh at the Humor in Uniformor be there at the birth of a new RootsHopefully it will endure to remind us of the power of the individual..

oreo, readers digest isn't gone yet. i just read up on it to see what stage there at with chapter 11 and as of today, 9/7/09, there getting a new owner to run the magazine and they canceld seven leases so there still around.

IMO, Readers Digest was one of the biggest contributors to the dumbing down of America.

Bailey. at first I read your comment as was all like "whaaat" then I thought about it and you are right. That is about when we started becoming stupider (Yup, know it isn't a word). Condensed stories, pithy stories that really aren't all that cute....I realized I never really even read an entire copy, it is strictly dentist and doctor office material. And I would take Highlights over RD!

Condensed stories and whatever it's contents it sold more mags than any other! But when the priviledge consultants raised the price tag and moved them into TV and celeb watching it crashed! Now an investment company bought it..its employees lost their 401K investment and the RD building is vacant! And the cnsultants are history along with Arthur Anderson!