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For most of the twenty-first century the jewellery industry has agonised over the moral, ethical, and environmental damage done by the exploitation of diamonds. Be that in terms of child labour, the blighted lives of miners, the spoil left by the extraction process, the financing of civil wars, or the propping up of repressive regimes. The Kimberley Process, and subsequent legislation, attempted to bring forth order out of chaos.  But in 2006, the Hollywood blockbuster movie ‘Blood Diamond’, starring Leonardo Di Caprio, pricked the conscience of the industry and brought the subject back into public focus. The actor’s name has been linked with low-level anti diamond activism to this day.

Disruptive Diamonds V2

Industry insiders don’t need reminding of all the arguments that have ricocheted to and fro ever since. Initiative has piled upon initiative in an attempt to improve the situation – or create a thicker smoke screen – depending on your point of view, and the depth of your cynicism.  At the same time the hunt has been on for verification systems that could guarantee the provenance of natural diamonds, or for diamond substitutes that provided glitz without guilt. Cubic Zirconium was a passable diamond simulant, but lacked the cache of the real thing and, whilst man-made synthetic diamonds were theoretically possible, it wasn’t until the barriers came down across Russia that the technology to manufacture them became readily available.

So, imagine the kudos attaching to a company that not only claims to be able to manufacture quantities of large synthetic diamonds relatively quickly and economically, but also secures an investment and an endorsement from Di Caprio! Not only will his money come in handy, his publicity value is enormous! But Diamond Foundry isn’t actually too short of money, having secured the financial backing of six billionaires in making products that they claim are “ethically and morally pure”, and selling them – already set in jewellery – direct to consumers.

Naturally enough, there has been a backlash, with an open letter to Di Caprio, from Bob Bates of JCK Online, questioning the basis of the company’s environmental claims, highlighting the social and economic impact on mining communities in Botswana, South Africa, Namibia, and Sierra Leone and raising fears about the effect of commodification on prices. So, the argument over who benefits most from diamonds – the miners the middle-men or the financiers – and who will suffer most from the proliferation of synthetics rumbles on.

However, regardless of the arguments or judgements about who is morally or ethically right, the underlying theme of this debate is one that we will return to regularly over the next decade. For here is a classic example of a disruptive innovation. One that has the potential to create a new market and value network – disrupt existing ones – and displace established market leaders and alliances. Think Alibaba, Amazon, and Uber!

As we plunge into Industrial Revolution 4.0 it becomes easier to make money than even twenty-five years ago. Setting up and running a mine is expensive and requires a lot of manual workers. A company that makes its money out of a smart app needs less capital, doesn’t incur the same infrastructure costs, and virtually no extra outlay as the number of users rise. In other words, the marginal costs per unit of output tend towards zero. That’s why tech entrepreneurs get very rich very young!

Oxfam recently highlighted that the sixty-two richest billionaires own as much wealth as the poorer half of the world’s population put together. The world is becoming polarised between the ‘haves’ and ‘have-nots’.  Against this backdrop, regardless of ethical, or environmental concerns, the initial losers will be those at the bottom of the heap.

What if the ‘direct-to-consumer’ model proliferates – undermining established practice and traditions, atomising existing supply chains, shedding jobs, and vaporising careers? As wealth passes from old style mine owning corporations to billionaire technology pioneers and venture capitalists – concentrating it in fewer hands – who will be the winners and losers? Regardless of the short-term disruption, where are innovations like these taking us, and what will be the effect on society in years to come?

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Michael Hoare FIAM

Reviewing your strategy, communications, or public profile? Can I help? info@michael-hoare.co.uk    
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Getting a buzz from jewellery drones

The jewellery trade press are reporting that a business owner in the U S has completed what is thought to be the first ever drone-delivery undertaken by a jeweller. According to Jewellery Focus:

‘Distinctive Gold Jewelry, of Frankfort in Illinois, delivered a women’s watch to a couple celebrating their anniversary. The business owners say that they have being “dying to do” such a delivery since they first heard of the concept of drones. Drones have become a talking point in retail and consumer circles ever since online shopping giant Amazon said it was trialling the technology….It is not clear whether Distinctive Gold Jewelry intends to roll it out as a standard part of their service offering, but it has nonetheless garnered some attention stateside, with US trade magazine National Jeweler breaking the story.’

So, a PR coupe for Distinctive Gold Jewelry, but what if this neat – even amusing – stunt were to become an everyday occurrence?  The crowded streets of our major cities are a far cry from the comfortable little town of Frankfort with its 17,000 inhabitants.

Scale up the delivery of one watch to the kind of volumes that might attract Amazon, and you have a whole different scenario. Imagine the skies of London or Birmingham buzzing with delivery drones? Or worse still, the peaceful horizons of our market towns? Is that really what we want?  How much fun will it be when our Sunday afternoons – and maybe nights – are shattered by the infernal buzz of drones passing overhead? How much of a laugh will it be when you’re poleaxed by a parcel falling from the sky, or get a swipe across the head from a twenty kilo projectile, as it bounces off the roof, and breaks a few tiles on the way down? And who will pay for the damage?

So, leaving aside the obvious security concerns, the threats to privacy and safety are just two of the reasons we should think very hard before surrendering to this seductive new technology. But if that time ever does come, I think I’ll be investing in a tin hat and a catapult!
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Do you have virtual meetings? By that I don’t mean ones where virtually no-one shows up, but ones where decisions are made by email only. It appears there is a legal distinction between those and electronic meetings. They’re the ones that take place by conference call or video link! It’s a subtle distinction but one that will become ever more important in this digital age.

Virtual Association Meetings

Setting a date when most of your directors can be in the same place at the one time has always been a pain in the backside for association CEOs. And even when you’ve agreed a date there’s the venue, the travel, and the catering to be thought of. Plus, once you’ve got them together, if you’re foolish enough to give them a glass of wine with their lunch, you can pretty much kiss goodbye to a whole days’ productive time, once a couple of loquacious old bores get into their stride.

So, banishing Directors to the confines of a small screen on the side of your desk sounds pretty attractive. Not least because it has the potential to unlock oodles of time but it can also save a whole pile of money to boot! In the right circumstances virtual meetings can work admirably, but beware, there may be pitfalls.

Thanks to email it’s easy to get agreement to do something between meetings by simply asking committee members to reply signifying their consent. That’s fine, until one or two people don’t agree, raise major objections, or make counter-proposals. Face to face this would get argued through and the majority view would probably prevail. But, if your discussion is solely by email, how – and who – determines whether a decision has been reached and what happens next? Clear ground rules should help.

A policy that requires over 50% of those responding to agree, or a minimum number of objections before something can be stopped, would do the trick. But what next? Wait until a subsequent meeting – virtual or real – to ratify that decision? Not much help if a rapid response is required! And what about keeping records? Electronic? Not much good if they’re only accessible from one person’s inbox! Better to make it a policy that such decisions are reported like Minutes?

For a couple of years I was on the Board of an international body whose Directors were scattered to the four corners of the globe (not logically possible, but you know what I mean!). Getting them together for more than one or two meetings a year would have been prohibitively expensive and massively time-consuming, so most Board meetings were held by teleconference. With the CEO in Australia, the Chairman in America, and Directors in England, South Africa, India etc., we had to meet at odd moments to allow for time differences. Maybe the odd Director answered the phone in their pyjamas (funny place to have a phone), but it worked!

The key was planning, preparation, and participation.  The Officers having already made their own deliberations, the Chairman and CEO set out and distributed an advance agenda that progressed in logical sequence; notes and supporting papers were circulated in advance, with all options explained; and all participants expected to state their view clearly, with votes enumerated against the attendee list.

It worked because the group was tight, well-known to each other, committed to attendance, and anxious to make progress. It would have failed if the Chairman had permitted subsequent backtracking on previous decisions, let dominant personalities take over the discussion, or allowed the meeting to stray into subjects that were off beam. The particular skill being to inspire input from those who never normally express an opinion on anything, or wrong-foot those who switched to speakerphone while they nipped off to fetch a coffee. Face to face these same skills would be used to prompt those individuals whose ‘lights are on’ but where there’s ‘nobody home’!

Of course ‘actual’ meetings are better when it’s a large diverse gathering – like an AGM – or when there is a lot of business to cover on numerous issues. Slide decks and Power Point presentations can work in a virtual environment, but when you need 100% impact a live event is always best! But the major downside to virtual meetings is that they severely limit the chances of an after-meeting drink! Not the ‘done thing’ these days I know but, speaking personally, I’ve learned an enormous amount about running trade associations with a glass in my hand!

Reviewing your strategy and communications? Can I help? Over twenty years’ association management experience.

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Michael Hoare FIAM

IofAM 022 Virtual Meetings Protocol October 2015

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What does an association CEO actually do? Good question! A combination of politician, ambassador, tactician, and showman you might say. And a small business leader to boot! OK, but what qualities does a good CEO need to succeed? That’s a question that involves a long answer and one which will be unique to each trade or professional association. The Institute of Association Management has produced a list of the 13 key attributes of association management CEOs which is handy for ticking off the bullet points on a job description. But I believe a great CEO has both emotional and analytical skills. And don’t forget the physical aspects of the job too!

Head

The very essence of any membership organisation is communication. Be it oral, written, or via social media, the CEO – especially in a small organisation – is generally the communicator in chief. Engaging, communicating, empathising, should be in their DNA.  But don’t mistake this for broadcasting! Communication is a two-way street, with ideas flowing in and out. Thought leader you may be, dictator you are not! Sometimes you’re an agony aunt listening, analysing, and resolving professional and personal issues with board members, officers and staff. And only occasionally will you get to unleash you inner Henry V!

Politician, ambassador, and diplomat are also within the remit of the successful CEO. The ‘conduct of relations between nations by peaceful means’ is how the dictionary puts it. But the ability to communicate and negotiate at all levels with people from different backgrounds and organisations and cultures is probably closer to the mark. So, it goes without saying that you must be a people person, able to connect, and be approachable.

A lot of hot air is expended on the subject of leadership. Quite whether leaders are bred or nurtured isn’t clear. But whichever it is, you won’t go far as an association CEO without this quality.  Motivating and managing Boards, volunteers, officers, staff, and members, is an uphill battle unless you have natural leadership qualities. Brushing up your skills can’t hurt, but personally I don’t put much faith in self-help books, mantras, and seven point plans. Leadership is a complex formula that mixes head and heart in different quantities according to the situation. Ticking boxes just isn’t enough!

Entrepreneurship is frequently required to devise and exploit money-making schemes. Unless you are very fortunate there is generally a gap between the income from membership subscriptions and out-goings. In most cases it will be down to you to fill it, and this is where your innate business acumen comes in. The business person in you will always be switched on.  Identifying, developing and implementing events, training, publications, sponsorship, and other income generators.

To quote George Orwell’s “Who controls the past controls the future; who controls the present controls the past” or, Winston Churchill’s, “History will be kind to me for I intend to write it”, in the same sentence may be to stretch an analogy to breaking point. But it neatly illustrates what politicians and historians have always known; that control of the written record confers power on the author. So, in the association context, the person who signs off the Minutes, or writes the business-plans, reports, and memoranda, wields considerable authority. If they in turn translate the decisions of the Board and sub-committees into actions, they influence the speed and direction of travel. And if they can also write meaningful articles they control the narrative that influences internal and external observers.

So, armed with the skills of a planner, guiding strategic direction of the association and developing appropriate plans; a project manager, planning, directing and implementing major projects and events; and a lawyer, familiar with company and/or charity law and appropriate regulations, you will be almost fully equipped. But not quite. Because the ability to understand budgeting, accounts and reporting, and have a firm grasp on governance are also essentials in the CEO’s tool kit.

Finally, and not to be underestimated, are the physical and mental resilience needed to withstand a punishing schedule. A thick skin, the capacity to act alone, and brush off occasional assaults on your reasoning, integrity, and goodwill are a must! And a robust constitution is a blessing! Early mornings, late nights, travel – in the UK and abroad – all take a physical toll. As do the demands of ‘socialising’, which may involve excess eating – and other temptations – and maybe even loss of sleep! Add that to the need to always be well turned out, bright-eyed and receptive, and you’ve cracked it!

Reviewing your strategy and communications? Can I help? Over twenty years’ association management experience.

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Michael Hoare FIAM

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Association executives will all have experienced difficulties with presidents, chairmen, or directors. They are a mixed bunch and over the years the good, the bad and the ugly come and go. Never-the-less, as professionals you have to get on with them, accept their peculiarities and petty likes and dislikes whilst the serious business of governance goes on.

In my twenty-odd years’ working my way up through membership bodies, trade associations, and charities, I’ve discovered that Boards come in many shapes and sizes. Each adopting a different attitude to the responsibilities they have taken on – sometimes unwittingly. They range from the indolent to the hyperactive, the distant to the micro-managing, and all shades in between. Their attitude to the chief executive and secretariat can also vary wildly.

Some directors see the association as their personal fiefdom, with the staff as serfs to do their bidding; the chief executive’s prime functions – in their view – to ensure the success of the golf day and the quality of wine at the annual dinner. Such attitudes stem from the days when association secretaries ruled; when finding a place on a Board or committee was one way for family firms to distract patriarchs who refused to step aside; when a culture of amateurism prevailed; and directors’ focus was sometimes blurred.   In my time I’ve met them all – the commanding, the conniving, the conceited, and the committed – but when it comes down to it there are two distinct types of association Board. One meddles and micro-manages in the mistaken belief that as business people themselves they must be able to do better than their ‘employees’. The other understands their strategic role but accepts that the secretariat are professionals – experts in their field – with the CEO taking operational responsibility on a day-to-day basis. Only the chairman can determine which route they take.

But don’t let’s fool ourselves, chief executives can be a mixed bunch too.  Perhaps best described as entrepreneurs, showmen, and diplomats all rolled into one, they have to juggle the often conflicting interests of their members to achieve consensus, and they can be complex characters. Nevertheless the key relationship is that between the chairman and the chief executive, and trouble follows where this fails. As well as a shared commitment to the cause, relationships must be based on mutual respect and trust. They must be frank and open, with problem areas being addressed amenably. Empathy, communication, humility, and self-awareness are the key differentiators.

The two roles must be complementary. The chairman is responsible for leading the business of the Board while the chief executive manages the association’s business. The chairman and the chief executive must be aware of each other’s activities and work together as a team. The duties of the chairman – a non-executive role – arise from their position as the chief elected officer of the association and their responsibility for presiding over its official business and the Board. The chief executive is responsible to the chairman and the Board for directing and promoting the operation and development of the association consistent with its primary objectives. In so doing they exercise executive stewardship over the association’s physical, financial and human resources.

There used to be a joke along the lines of, ‘what’s the similarity between a non-executive director and a shopping trolley?’ Answer: ‘They both have a mind of their own, but you can get more food and drink in a non-executive director!’ It may be an old chestnut, but it illustrates that the fault line between executive and non-executive responsibilities is often where most tension develops. Some secretariats are resentful of the oversight of a largely non-executive Board that they sense doesn’t share their vision or commitment – or jeopardy to their income – or appreciate the skills and professionalism they bring to a difficult job.

Therefore, not-with-standing their fiduciary responsibilities, and duties to members, every Board must remember that the lively-hoods and well-being of all those employed by the association are at stake and the consequences of ignoring this fact can be enormous. Believe me, I’ve been on both sides of the fence, as director, chief executive, trustee, and humble foot-soldier, and I know how morale suffers when internecine warfare sours relations or the Board appears to lose the plot!

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Michael Hoare FIAM


Please Note:

Members of The Gemmological Association of Great Britain can log in and find details of the 2015 Council elections on the Gem-A website, including a proxy voting form for those wishing to caste their vote online.

The Gem-A Manifesto by Ronnie Bauer, Kathryn Bonanno, John Bradshaw, Guy Clutterbuck, Michael Hoare, Alan Hodgkinson,  Alberto Scarani, and Greg Valerio is available from info@michael-hoare.co.uk


             
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The opening of the new V & A exhibition – What is Luxury? – has got the press into a lather this week trying to decide what constitutes the ultimate indulgence, and how it will be defined in the future. Surely the simple answer is ‘silence’ or at least the absence of irritating distractions. Has silence become the ultimate luxury good in our frantic world? The Telegraph Picture
The author Mathew Crawford’s, whose new book The World Beyond Your Head is just out, says, “Figuring out ways to capture and hold people’s attention is the centre of contemporary capitalism. There is this invisible and ubiquitous grabbing at something that’s the most intimate thing you have, because it determines what’s present in your consciousness. It makes it impossible to think or rehearse a remembered conversation, and you can’t chat with a stranger because we all try to close ourselves off from this grating condition of being addressed all the time”.  
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