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Home > Diamond News Center > Features > Articles > Diamonds

“We Didn't See. We Didn't Hear. We Just Talked”

/ Israel

 

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Chairman of the Israel Diamond Institute Moti Ganz

The guide to the 21st-century traveler was written in our presence, in front of our eyes, but we turned our head the other way. They told us, they lectured us, they explained to us, but we couldn't hear them. The time has come. It's now or never. To be or to stop being…

“Let us make no mistake - it's not that the world is changing, but that it has already changed" - that's what Philipe Mellier told us in his address at the Presidents' Meeting, held in Israel in mid-June. As I listened to him, I thought about all the changes that have bombarded us over the last decade, like an earthquake with a tsunami, where you feel helpless and don't know how to cope with the huge waves enveloping you from every direction. There's no doubt that the writing was on the wall, and in large letters, too. There's no doubt that our reading glasses were very smudged and our hearing aids were not adjusted. Thus we suddenly find ourselves on a roller coaster in a storm, trying to hold on tight and looking for the button to restore our control.

It began in 1998, long before Philipe Mellier even imagined he would become CEO at De Beers. At the time, the company undertook a reexamination of its strategy, in light of the decline in its profits, which was due to a dramatic reduction of its share of the rough market. First, De Beers announced it would not continue to fund generic advertising on its own - if it didn't dominate the rough market exclusively, there was no reason it should continue to promote diamond sales for everyone. In retrospect, it's clear they were right, but at the time we were angry. And how.

 

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Philippe Mellier at the Presidents Meeting

Later, De Beers adopted as its own the brands we had all became accustomed to seeing as collective property, such as De Beers or Forevermark, which it used in a campaign for a private brand, based on the phenomenal success of the world's most famous slogan: A Diamond is Forever. We still failed to understand which way the wind was blowing, and only complained that our supplier was competing with us. And at the height of the process, Nicky Oppenheimer privatized the family company that his grandfather founded and then sold it - our Mayflower - daring to commit the sacrilegious act of treating one of the fundamental values of the world diamond industry - the family - as an asset of monetary value.

De Beers led the transition from a traditional company based on values of the past, where long-lasting ties, personal acquaintance and human relations carried heavy weight in its business, to a company that conducts itself based on the rules for managing a public firm - in other words, a regular company that draws a circle around a single target - the profit line. The other rough producers didn't need to free themselves from the old values; from the very beginning they marched to the beat of a different drum. De Beers, which made the transition itself, demonstrated what was happening, but we refused to see.

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While the rough producers have long been living in the 21st century, we clutch onto an old world with old values. We continue to buy boxes at a loss, in the hope that profit might be waiting for us around the corner and soon things may be great. We continue to run factories at a loss until we have no choice but to close them down, under suffocating terms. And we continue to shout and beg the rough producers to be considerate of us. The list of changes is tremendous - the method of purchasing rough (a shift to tenders and auctions), the technology for purchasing rough (Galatea, instruments that forecast results), expectations of contracted clients (you don't have to manufacture; you can also sell), the composition of the list of companies on contract (the addition of the major retailers, who want to show consumers that they dominate the entire pipeline, from rough to the store), demands that contractual rough purchasers meet the strictest regulations, requirements of the banks for obtaining credit due to Basel II and III and the AML legislation and changing marketing methods that tilt the weight towards online marketing and enable end users unprecedented views, by means of cameras and applications. Our cheese is being moved at a lightning speed. Our total confidence in the rulings of the gemological laboratories has been shaken in recent months. Our habit of marketing at exhibitions now raises doubts - are the high costs involved justified? Some are also challenging our custom of putting stones on the polished price list.

And I ask myself, no less than you: how much courage do we really have to make a change? How tight are we holding on to the old, familiar world, which actually doesn't exist anymore? How long do we think we can walk in the footsteps of our grandfathers and fathers and pass their ways onto our children?

Philipe Mellier came to Israel and said this out loud. His speech was very short, very concise and very clear. The change is already here. What we do with it depends on us. We must add value. We must renew. We must move. For if we don't run forward, we will fall behind.

This article originally appeared in HaYahalom 218

By: Moti Ganz - Chairman, Israel Diamond Institute
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