Further to my previous blog ...

One of the people I and many others  have most respect for in our industry is a leading US commentator and guru with as many years’ experience as I have.  He commented to me on my previous blog with good reason that in fact, love the old De Beers or hate it, the awe it inspired kept a certain order in the industry and prevented clients delving too far into nefarious activities and the threat of this combination of being shunned by De Beers and subsequently by the industry was in itself a potent enforcer of minimum standards.  He is, of course, quite right.  What was acceptable behaviour in the diamond industry in those days, both by mining companies and their clients, has changed beyond recognition but the point remains that somebody has to keep order and this should be a trade matter rather than being left to governments, law enforcement agencies, tax collectors and law suits.  The point I was trying to make is that the industry more than ever requires an authority that commands respect and leads the way in term of moral as well as commercial authority, and in that respect not so much has changed.

IS BUSINESS A PROCESS OR A SINGLE EVENT?

It is quite some time since my last blog but a kind mention of a blog I wrote previously in Chaim Even Zohar’s uniquely comprehensive and informed Diamond Intelligence Briefs has stirred me to action!

In Chaim’s review of how the Sight system may evolve in the future under the re-formed management of De Beers he refers to the Sightholder selection processes which have been the subject of so much discussion and controversy.


For as long as I have been a broker (48 years) the DTC has very reasonably selected its Sightholders according to its perception of its own best interests and indeed appointed the Sightholders it wanted and you could say (for better or worse) deserved.


The current assessment system has evolved into a very carefully and closely controlled construct to achieve the same ends. A process which often seems to involve restricting dialogue or diverting attention away from how outcomes actually are generated, except in the most basic and theoretical terms.


There is a popular fallacy that before SoC came on the scene the DTC was totally unaccountable and its ways so mysterious that they were incomprehensible to clients, who were said to be in perpetual awe of being punished in some way. This demonization of the DTC was very much the result of sensational media coverage and a rather third rate film called ’11 Harrow House Street’ helped perpetuate this image, which played to the stereotype of eccentric, arrogant Englishmen. The reality is the clients were just as capable then as they are now of defending their interests in what was possibly even more of a relationship driven business. The brokers played their part also in what was in reality a dynamic three-way relationship which generally worked well and earned the respect of clients and the industry.


You may feel that I am reminiscing rather and wonder where all this is leading. The simple conclusion I would like to offer is that the DTC both then and now has always needed to exercise its judgement and to be seen to put its credibility on the line in a way that sets it apart from the competition. I can never remember the DTC claiming to be infallible, or indeed getting everything right. It was the way that they adapted their decisions and outcomes which suggested that business had to be seen as a process rather than a single event because so much of the DTC’s own credibility and goodwill was invested in the appointment or discontinuation of Sightholders or in the sustainability of a dynamic pricing policy.


In that respect, things actually haven’t changed that much.

FT ARTICLE - If you have to reject me, tell me straight

Below is an article we have reproduced from today's Financial Times, written by the brilliant Lucy Kellaway. Do take the time to read it.

IF YOU HAVE TO REJECT ME, TELL ME STRAIGHT

Last December, Elly Nowell was interviewed for a place at Magdalen College, Oxford to study law. When she got home, she sat down and composed a letter to the ancient institution. “I very much regret to inform you that I will be withdrawing my application,” she wrote. “I realise you may be disappointed by this decision, but you were in competition with many fantastic universities and following your interview I am afraid you do not quite meet the standard of the universities I will be considering.”

This 19-year-old girl has taught me two important things about rejection letters. First is how well they work in the wrong direction: from candidate to interviewer. To have the powerless rejecting the powerful not only does the soul a great deal of good, it may make sense tactically. To dump a complacent boyfriend is a time-honoured ploy; I don’t see why the same shouldn’t work with jobs and university places. If there is anyone with any spark in Magdalen’s law faculty they will surely be regretting this plucky, funny girl who got away. (Though perhaps wondering if law, that dullest of all dull courses, was right for her.)

Second, by mimicking the standard rejection letter, Ms Nowell reveals what a pathetic form of communication it is. Patronising, disingenuous, all-round beastly. There is only one accepted way of writing these things, used by all organisations everywhere, and it contains three bits that go like this. “Thank you for your interest in,” they all begin. “We have had a record number of highly qualified applicants and regret that . . . ” And then, an upbeat ending: “We wish you all the best for your future.”

All three elements are shockers; far from softening the blow they intensify it. First, as a reject, you don’t want to be thanked for your “interest”, as what you were showing wasn’t interest, but desire for a position. Neither is it remotely comforting to know how many other great applicants there were. Worst of all, no one appreciates hollow good wishes from someone who is telling them to shove off.

When putting rejection into words, less is more. When one of my children was rejected from a university it was less upsetting to see the naked word UNSUCCESSFUL against the entry on the online application form than to read the letter which arrived a couple of days later with its bad tidings routinely packaged with insincere good wishes.

One might think there were nicer ways of saying no. Howard Junker, the founder of literary magazine ZYZZYVA used to return short stories with a covering letter that began: “Gentle writer, Please forgive me for returning your work and not offering comments. I would like to think of something to make up for my ungraciousness, but I don’t think a few quick remarks would really help.” He signed off with a handwritten, “Onward! J”

How charming, I thought when I first heard of this. But then I read a blog from a not-so-gentle writer who had received the very same letter on many occasions and found it anything but charming. The point is that no standardised letter can ever soften any blow. Rejection is rejection and it hurts.
Indeed, sometimes a brutal rejection is better. Antony Sher often describes the letter he got from the Royal Academy of Dramatic Art that said: “Not only have you failed the audition and we do not want you to try again, but we seriously recommend that you think about a different profession.”

Similarly, some 30 years ago a senior colleague of mine applied for a job at the Economist and got a rejection letter back from the editor’s secretary asking him not to contact the editor again. Such rudeness can only make the recipient think “screw you” and fill them with just the right sort of bloody mindedness to fight on until they make it.

The only worthwhile kind of rejection letter is one that gives reasons. Ms Nowell told Magdalen that she thought it stuck up and off-putting to candidates who didn’t come from posh schools, a point the college might do well to ponder.

In offering an explanation she wasn’t mimicking the normal style: employers almost never give reasons for fear of being sued, or because they don’t want to enter into a dispute, or because their hiring processes are so opaque they don’t know the explanation themselves.
The best rejection letter I ever received contained a reason I will never forget. I had written to a Mr Ivan Sallon, city editor of the Sunday Telegraph, asking for a job. He replied saying that there were no vacancies and went on: “May I offer you a word of advice? When applying for a job, do take care to get names right.” The letter was signed: Ivan Fallon.

lucy.kellaway@ft.com
Copyright The Financial Times Limited 2012.

MARSHMALLOWS !

I’ve always hated a particular English sweet called marshmallows, popular with children at fairgrounds for its sickly sweet synthetic taste and soggy texture. Sometimes people toast them which makes for an even more horrible gooey mess.

The DTC feedback has adopted a visual presentation which is obviously inspired by marshmallows, right down to the chemically induced colours.

The feedback appears to be an exercise which has all the characteristics of the previous ones focussing on relative performance but completely avoiding any detail or specifics which could really lead to any useful analysis which people could take away from the exercise and which could give them at least the satisfaction and compensation of assessing their business against their peers in a genuine and meaningful way.

The DTC has regularly hosted and promoted its own seminars as an opportunity for Sightholders to gain insights and inputs to improve their businesses. How ironic therefore that an exercise that is proclaimed by DTC to be so robust cannot apparently risk exposure to the sort of genuinely meaningful scrutiny and dialogue that one would both reasonably expect and hope for.

What's Up?

It’s always difficult to comment on what you don’t understand and despite the fact that the DTC announced the CPQ results and provisional list over 3 weeks ago we are still waiting for the feedback which would at least have given Sightholders and their brokers hopefully some understanding of the outcomes as well as the opportunity to evaluate how the process worked, undeniably to the advantage of some but also to the severe detriment of others.

If there is the confidence that is claimed by DTC in the robustness and rigour of this process then the feedback should hopefully provide the rational explanations that are required to demystify a process which seems to start off as relatively transparent but becomes increasingly opaque as it progresses. Even more importantly, for a business whose reputation and credibility is based around checks and balances as well as sound management and judgement, it is difficult to see how some of the outcomes have been reached or evaluated in terms of either business coherence or indeed in some cases best practice.

The DTC has the procedures in place (internal verification, third party verification, BPP and ultimately the Ombudsman) to ensure that those cases that are both contentious or indeed controversial, as some clearly are(!), are fully and properly addressed before the full and final list is announced in March. This will be the real test of whether this process and its outcomes are genuinely robust and convincing and, of course, the DTC will be judged (as we all are eventually) on actions rather than words.

EXPECT THE UNEXPECTED !!??!!

I think my reaction to some of the CPQ outcomes is summarised nicely by this title. I shouldn’t be surprised because every process seems to have had some outcomes which one really struggles to comprehend, let alone accept.

If it was an essay writing or best fiction competition that had consumed so many months of our lives and so many livelihoods and futures did not depend on it, I probably would be a lot more relaxed and comfortable about it than is the case.

I bet my view is fairly widely held but doubt whether many will have the balls to publicly agree with me, but it won’t stop me saying what needs to be said both now and into the future.

Nevertheless, as it is the season of goodwill and good cheer, I wish all my faithful readers a very happy Christmas and New Year!

TOO BIG TO FAIL AND TOO IMPORTANT TO GET WRONG!

Yesterday the British coalition government and the Diamond Trading Company made two long awaited announcements. The one from the British government was Chancellor Osborne announcing the government’s policy to address the systematic failure of the British banks in 2008. At the same time the DTC announced its new provisional client list.

The British government made it clear that they intend to separate the solid banking retail sector from the speculative banking sector (casino banking) to ensure that banks cannot be brought down again through irresponsible and ill advised speculation leading to toxic debt and subsequent government rescue.

Looking at the new DTC list there still appears to be a disconnect between the reality of criteria assessment and established behaviours which are at complete variance with coherent or sustainable models in the longer term.

One thing that both the government and the DTC have to deal with is the consequences of uncontrolled speculation. Just as governments had not choice but to rescue banks ‘too big to fail’, the DTC has been obliged to rescue a diamond industry and market also ‘too big to fail’.

Let me make it quite clear that I am not criticising the good intentions of DTC management to operate a system that can be considered both robust and credible. It is no easy task and never was. Before SoC was introduced brokers’ input into the selection process was felt to provide checks and balances which gave the whole system an extra layer of protection, dialogue and comprehension.

Since SoC the KAMs inherited the potentially conflicting role of being confidante, advisor and judge, jury and even executioner! Given the inherent conflict in such a position it is hardly surprising that it was felt that an Ombudsman was necessary to oversee fair play.

Marketing is not just about shared aims but shared values as to how to achieve them and surely those values have to include a dedication to getting things right. Right for the consumer, right for the client, right for the industry in general. The DTC’s commitment to doing the right thing in general is recognised by the fact that it is still the diamond company that is the reference point for the whole industry and rightly so, which is why whatever they do is subject to such intense scrutiny and market analysis.

Checks and balances are essential to any democratic society or credible process and to admit to fallibility or systemic errors is a sign of fairness and strength, not weakness.