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A Broken Model
It sat in the window of a Manhattan Goodwill store on 79th Street, near Broadway. Its original box was positioned at such an angle that you couldn't quite make out the contents, but I knew I had to buy it.
Not for me, for a friend. It was an original Star Trek phaser, a powerful sidearm once seen in the hands of Captain James Kirk and many of his crew. A friend of mine celebrates his 60th birthday in July, and I have been accumulating gifts targeted at his favorite pastimes. Retired, he watches Star Trek shows all day, every day. He speaks Klingon fluently, of course.
The chances of my being up and at 'em at 10 a.m. on a New York Friday were numh paghDIch, which is Klingon for zero. So I offered $50 for the phaser. The store manager refused to sell it to me. Not wanting to deprive the needy, I gave the $50 to the first panhandler that stopped me after I left the shop. At my hotel I went on eBay and found all manner of Star Trek junk for sale. I bought my pal a pair of Star Fleet cufflinks, some Spock ears and a Captain's shirt from the original series. I later found him a Lieutenant Uhura. At its 79th Street store, Goodwill is operating a broken business model. Presumably, working at Goodwill doesn't beef up one's resume and so only people less ambitious end up in management there. A couple of days later, on a Sunday afternoon, I went to an electronics company called B&H, not far from Ground Zero. Inside the store, many hundreds of people stood in lines that snaked their way around for what seemed like miles. Why? The next week was Passover. B&H, which is run almost exclusively by Hasidic Jews, would be closed for the entire week. B&H was offering no special prices, nor anything else for that matter. To judge by the mob, though, you would have thought that the store was giving away computers and $1,000 bills. People lined up to look at electronics, then lined up separately to buy them, and finally lined up elsewhere to pay for them. The only activity for which there was no line was to leave the store, which we did. B&H operates a superb business model. So much so, in fact, that they might do best to open only on Sundays and then close for each and every week. Sometimes, I think that insurance companies are operating a broken model, just like Goodwill. No one queues up to buy insurance, although lines of corporate jet aircraft snake around Bermuda's airport in the renewal season. Losses in the first half of 2011 from a series of events have insurers and reinsurers scrambling to raise money, not long after they were all whining about being overcapitalized. Too much, too little--never the correct amount. That's no way to run an enterprise, even one that offers protection against the unknown. ROGER CROMBIE is a London-based columnist for Risk & Insurance®. August 23, 2011 Copyright 2011© LRP Publications |
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