If you run a business, you probably have to apply many skills to fit various phases of the enterprise during different economic cycles. If you are in a start-up situation, for example, an emphasis on leadership is required to get things going. As a business matures, sound management principles are needed to keep it on track. And in a soft economy, as we all learned last year, both talented leadership  and good management practices are essential.

What are the differences between leadership and management? Why does every firm need a healthy dose of both? And when must you – as the leader of a business, a volunteer group, or a family – exercise each skill to maximize success?

Simply put, leadership is more art, and management is more science.  Leadership inspires people to move toward a common goal. Effective leadership requires confidence, charisma, and good motivational skills, among other traits. Leaders must have a clear vision of their organization’s goals and know what path to follow to reach those goals. The leader’s challenge is to exercise the appropriate blend of personal traits and organizational skills to encourage people to look beyond the present to see the future. Successful leaders set the tone for any initiative or project, provide direction, and become a model for the behavior required to achieve results. In other words, successful leaders set the example and then lead by that example.

Management, on the other hand, is a disciplined process that provides infrastructure for a group, so that the members of that group can achieve the organization’s desired goals. Managers marshal and deploy resources to accomplish stated outcomes. They pay close attention to the details and monitor progress to stay focused. Refinement and continuous improvement of plans and procedures are the hallmarks of good management.

It has been said that leadership is primarily concerned with “doing the right things,” while management is concerned with “doing things right.” Thus, leadership without management could inspire people to action but leave them frustrated by not enabling achievement of desired results. On the other hand, management without leadership often simply preserves the status quo, and promotes unnecessary bureaucracy and, unfortunately, mediocrity.

It is clear, then, that a blend of visionary and inspiring leadership plus strong management is key to success in any organization. Deciding which of these skill sets should dominate at any point in time depends on economic realities, the needs of people, and the condition of a business.

Few individuals possess the traits of both strong leadership and good management. That is why every successful organization or enterprise surrounds their leader with quality people. I hope this brief summary reminds you of the principles of good leadership and management and helps you to apply what is necessary to meet the needs of the time.

On a personal note, and speaking of great leaders, the Chariman of GIA, and the man affectionately known worldwide as “The Father of Modern Gemology,” will celebrate his 84th birthday tomorrow, March 2. Richard T. Liddicoat, “RTL” to many of us, has made monumental contributions to the world of gemology and the development of GIA. I’m sure all of you, along with the entire GIA family, join me in wishing Mr. Liddicoat a very happy birthday.

Acquire gemological training in as few as five days by attending GIA’s highly praised Extension classes. GIA campuses in Carlsbad, Calif. and New York have Extension offerings in both Gemology and Jewelry Manufacturing Arts. In addition, seats are still available for upcoming industry-hosted classes in Detroit, Mich.

In Carlsbad there will be a night class offered in the renowned Diamond Grading Extension class, March 4-19. These upcoming Extension classes are also being offered in Dallas: Colored Stone Grading, March 3-6; and the one-day Pearl Grading class, March 7. The Diamond Grading Extension class is also being presented in Lafayette, La. March 11-15.

In conjunction with the Michigan Retailers Association, GIA is offering Extension classes in Detroit, Mich. in Diamond Grading, March 4-8; Gem Identification, March 11-15; and Colored Stone Grading, March 18-20. For more information about enrollment in these classes, please contact the Michigan Retailers Association 800-366-3699.

To enroll or to request more information about Extension classes in Carlsbad, Calif., New York, and other cities in the United States, call 800-421-7250, ext. 4001, or e-mail eduinfo@gia.edu. For a complete listing of GIA Extension classes, please go to http://www.gia.edu/education/extsched2002.cfm.

Don’t forget about GIA’s acclaimed Jewelry Manufacturing Arts classes as well! Get hands-on training in Carlsbad, Calif. with classes in Jewelry Design and Comprehensive Wax Techniques. These classes are seven weeks long, and both are scheduled for March 14 through May 3. For more information on GIA’s Jewelry Manufacturing Arts program, please go to http://www.gia.edu/education/oncampus.cfm.

Consumer confidence took a hit in February because of congressional inaction on an economic stimulus package, concerns over corporate accounting practices, and a still-sluggish job market.

However, retail sales remained strong, with jewelry performing well, finishing Valentine’s Day a few percentage points ahead of last year.

TRADE: The De Beers Diamond Trading Company February sight totaled between $450 million and $500 million, somewhat higher than preliminary reports had indicated and about $50–$100 million larger than January’s sight. Allocations to India increased about 10% to $90–$110 million, though the supplies were still lower than what clients had requested.

The pickup in Indian business is due largely to demand from U.S. mass merchandisers who were overly cautious in buying last year and ran low on inventory. Some even sold out of very popular items such as the three stone ring. 

AUCTIONS: The first major auctions of the year were held in St. Moritz, Switzerland.  Christie’s February 22–23 sale totaled $8.8 million and was 84% sold by lot, 87% by value – an excellent result even in a boom year.

Top lots were: a 14.60 carat D-IF rectangular-cut diamond that sold for $599,895, or $40,200 per carat; a 57.5 carat diamond that brought $388,650; and a pair of Kashmir sapphires, 6.48 and 6.37 carats, that went for a total of $296,250.

Eric Valdieu, who ran the sale for Christie’s, said the auction “is a good omen for the jewelry auction market in general. Strong prices were achieved for diamonds and colored stones, with dealers and private buyers very active.”

Sotheby’s St. Moritz auction, held February 20–21, was also successful, realizing $10 million. The signature piece was a 5.18 carat Fancy Intense blue heart-shaped diamond that drew a hammer price of nearly $1.5 million.

CONFLICT GEMS: Hope has been expressed that the death of Angolan rebel leader Jonas Savimbi, who led UNITA against the ruling government for 24 years, will finally end the civil war there. UNITA has been the chief force against the government and, since the late 1980s, has used revenues from diamonds to fund its activities. However, it is unlikely that Savimbi’s death, or even the dissolution of UNITA, will end the bloodshed in that large country. Well-armed factions remain that will be tempted to seize and operate diamond areas for their own benefit.

The Jewelers of America sent out a tanzanite fact sheet to all 11,000+ of its members, reiterating the U.S. State Department’s opinion that there is currently no evidence that the gemstone is being sold to aid terrorist organizations. Tiffany, however, announced it is continuing with its decision to suspend tanzanite sales indefinitely.

MACRO: In a surprising letdown, the Conference Board, a New York – based business research group, said its Consumer Confidence Index fell to 94.1 in February, from a post-September 11 high of 97.8 in January. The decline brings the index to its worst level since November 2001.

Analysts said the reasons for the decline are Congress’s failure to enact an economic stimulus package, continued job layoffs, and investor queasiness over potential new Enron-style corporate collapses.

On the bright side, retail sales have held up, according to a Bank of Tokyo – Mitsubishi, North America survey. Chain stores generally met sales goals, last week slipping a modest 0.4% compared to the prior week, but remaining up a solid 5.1% compared to the same week last year, according to the BTM weekly poll. Analysts believe that the strong gains in February suggest sales growth may surpass the surprisingly strong 5.1% year-on-year gain posted in January.

By Russell Shor, Senior Industry Analyst

The GIA Alumni Association invites alumni and industry members to attend GemFest Basel 2002: Doing Business in a Changing Economy.

“GemFest 2002 will help attendees improve their businesses by giving them an insiders view on what’s going on in the economy as a whole and in the jewelry business economy in particular,” said Patrick B. Ball, G.G., director of the GIA Alumni Association.

Visit the GIA Alumni Association's Web site for more information.

In conjunction with the many gem shows held in Tucson in early February, the Tucson Diamond Show sponsored three morning panel discussions in the Manning House mansion: on diamond cut, changes in the diamond pipeline, and synthetic and HPHT-processed diamonds.

The Diamond Cut discussion included Charles Meyer of Lazare Kaplan International, Peter Yantzer of the American Gem Society Diamond Grading Laboratory, Ilene Reinitz of GIA Research, Leon Cohen of Codiam Inc., and David Federman representing Eight Star Diamond.
 
Meyer led off the discussion with the comment that a quantifiable cut standard is required to protect the consumer and help hold diamond value. He acknowledged that there may never be a “definitive opinion on what makes a beautiful diamond, but we do need a recognized standard.” Reinitz and Cohen stressed that specific facets, often overlooked in proportion analyses, were extremely important. “Every facet matters,” said Reinitz. She explained that GIA research has found that the lower girdle facets are particularly important: “Light coming into the crown is three times more likely to hit a lower girdle facet than a pavilion main.”

Cohen stressed that facets must be aligned as perfectly as possible because they act as mirrors. He used the example of the Hubble telescope, where even the slightest misalignment of a mirror will result in blurry, indistinct images from outer space. “The same holds true with a diamond,” he explained. Noting that interest in diamond cut has grown tremendously, Yantzer cited the 8,000 websites that address the subject. He said recent studies have validated the expertise of diamond cutters in deriving the maximum beauty from a diamond, and noted that the Tolkowsky “Ideal” has evolved over the years to yield greater fire and brilliance. Federman told how devices such as the Fire Scope and Hearts and Arrows cut viewers in Japan provided an easily understood, observable way to determine that a diamond was well cut.

All of the panelists agreed that cut evaluation was progressing to a system based more on actual “performance” – especially fire and brilliance – than on a single set of proportions.
 
The discussion on Changes in the Supply Pipeline featured Youri Steverlinck of the Diamond High Council in Antwerp, Joe Landau of Joseph Landau Inc., Phoenix gem dealer Gary Wright, Ben Janowski of Janos Consultants, and GIA senior industry analyst Russell Shor.

According to Janowski, diamond prices will become more volatile and retailers will be faced with slimmer inventories, which means fewer choices for consumers. De Beers Diamond Trading Company (DTC) sightholders will continue to ally themselves with large retailers, resulting in the disappearance of some mid-sized chains. Synthetics could pose a “major problem” to the industry – even with detection measures in place, he noted – because they could destroy the mystique of diamonds.

Shor said that a world without DTC domination would not bring massive diamond sell-offs and cataclysmic price declines, as predicted by some writers. The major producers will maintain a certain order in the market even without old-style De Beers custodianship. Steverlinck predicted that new diamond manufacturing centers, particularly in China and Eastern Europe, will bring an excess of production capacity that will increase competition among diamond centers. De Beers will probably reduce its $200 million generic diamond advertising campaigns now that its market share has declined to about 60%.
 
 Noting that diamond margins continue to fall, Landau told the audience that “respect” for diamonds has to be rebuilt through quality initiatives, branding, and creative packaging so consumers feel they are getting something special. Wright, however, countered that the biggest problem in the industry was “conflict of interest” diamonds, those that diamond companies sell direct to Internet dealers or even to consumers on their own websites, thereby undermining margins. “This is the biggest issue affecting distributors and retailers now,” he insisted. “Retailers have to let these companies know that loyalty still matters in this industry.”
 
The seminar on Synthetic and HPHT-processed Diamonds featured Dr. Jim Shigley of GIA Research, Chris Smith of the Gübelin Gemmological Laboratory, Alex Grizenko of Lucent Diamonds, Charles Meyer of LKI, Martin Haske of Adamas Laboratories, and Jewelers Vigilance Committee general counsel Cecelia Gardner.
 
Grizenko said that producers of synthetic diamonds (see figure) would continue to improve and change their processes, making identification more difficult. These products will have their place in the market, he added, so the industry should not fear them. Smith reviewed various detection procedures for HPHT-processed and synthetic diamonds, and Haske maintained that some of the detection work could be accomplished by instruments specially built for the process. Dr. Shigley reviewed GIA research on synthetic diamonds, much of which has been published in Gems & Gemology over the last 15 years, and said that the study of HPHT-processed diamonds was ongoing, as GIA continues to build a database.

Gardner told the audience that, regardless of the process, the burden of disclosure ultimately falls on the retail jeweler, so it is the retailer’s responsibility to learn and understand about treatments and synthetics.

For more on diamond cut, economics, synthetics, and treatments, visit the Gems & Gemology website, www.gia.edu/gandg. To order an issue or subscribe to G&G, e-mail dortiz@gia.edu, or call toll-free 800-421-7250 ext. 7142. Outside the U.S. and Canada, call 760-603-4000, ext. 7142.

GIA will mark the commencement of its 2002 lecture series with the first of four lectures in a series entitled, “Precious Paths: Surprising Links to Gemology.” The series will open with a lecture and book signing by noted author and jewelry historian Janet Zapata at 7:30 p.m. on March 20 at the Institute’s World Headquarters in Carlsbad, Calif.

The series, hosted by GIA and the Gem & Jewelry Society of San Diego, will feature alternative career paths in the gem and jewelry world. The first lecture, “The Joy of Animal Motifs in Jewelry,” will emphasize the history of animal depiction in jewelry, and is based on a book Zapata recently co-authored with Suzanne Tennenbaum, “The Jeweled Menagerie: The World of Animals in Gems.”

In her lecture, Zapata will discuss the appearance of animals, insects, birds and fantasy creatures in jewelry in the last 200 years. She will show how Cartier, Van Cleef & Arpels, Boucheron, Tiffany & Co., Fabergé, and Lalique have used animals in their jewelry. Following the lecture will be a book signing by Zapata and Tennenbaum.

Zapata is an independent scholar, jewelry historian and museum consultant, and has authored several books on the history of jewelry. She served for many years as archivist of Tiffany & Co., and is currently a consultant for the Louis Tiffany Garden Museum in Matsue, Japan and the Toledo Museum of Art. She has co-curated a number of notorious exhibitions, and was featured on “Tiffany: The Mark of Excellence,” on the A&E Biography series. Zapata also frequently contributes to various trade magazines.

In addition to Zapata’s lecture, the GIA Museum Gallery will feature the dazzling exhibit, "Animal Motifs in Jewelry: 1830 to the Present," which features a fascinating array of more than 100 pieces of fine animal-motif jewelry, many of which are also highlighted in Zapata’s book.

“Not only are we thrilled to host such a captivating and informed speaker as Janet, but we are also delighted that the audience will be able to view many of the stunning animal-motif pieces on display in the Museum Gallery,” said Elise Misiorowski, museum director for GIA.

The lecture series is free for Gem & Jewelry Society members; nonmembers pay $10 per lecture. The lecture series is open to the public on a space available basis and seating is limited. To join the Gem & Jewelry Society of San Diego, or to attend the upcoming lecture, call 800-421-7250, ext. 4170.