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Harry Oppenheimer
Aug 31, 2000 2:09 PM
By Martin Rapaport
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By Martin Rapaport
The passing of Harry Oppenheimer marks the end of an era for the diamond industry. An era that included the closing of De Beers mines following the U.S. recession in the 1920’s; the incredible boom-bust cycle of the investment diamond market in the late 1970’s and the extraordinary expansion of global diamond demand as the Far East markets came on stream.
Oppenheimer was much more than merely an important player in the diamond industry. He was the leader of his generation and the guiding force behind fundamental innovations that established the modern diamond trade.
Oppenheimer was more than just a businessman. He played an active role in South African politics and as a member of parliament opposed the apartheid regime. At a time when it was very unpopular and unprofitable to do so, he encouraged the creation of black trade unions and provided equal employment and educational opportunities for blacks. While some say that he could have and should have done more, it is obvious that Oppenheimer’s commitment to the betterment of conditions in South Africa was real and often came at the expense of personal prestige and economic gain.
As we move into the next century and the diamond industry enters a new era of unprecedented change, it is natural that our attention is focused on the future — a future filled with new challenges and opportunities. But perhaps we should slow down for a minute and take time to consider a few lessons from the past, lessons that can be learned from the life of Harry Oppenheimer and how he dealt with the challenges and opportunities of his time.
Marketing
It is hard to imagine a more difficult situation than that which confronted Oppenheimer when he entered the diamond business in the 1930’s. The diamond market had collapsed following the great U.S. depression and the industry was in such bad shape that De Beers had been forced to close its mines. Clearly new ideas and initiatives were necessary. This is how De Beers describes what happened:
"In 1938 Harry Oppenheimer commissioned the first major promotional campaign for diamond and diamond jewelry in America. This set out to stabilize a fragmented and difficult market, build the image, desirability and magic of diamonds and, as a direct result, stimulate demand. His action led to the first real democratization of what had been a luxury product that most believed only the very rich could afford.
"This campaign resulted in a steady expansion of the diamond market that increased diamond ownership and restored both consumer and trade confidence in diamonds while establishing their intrinsic and emotional value. Apart from the effect that the advent of planned promotion had on market stability and growth, Harry Oppenheimer’s initiatives resulted in advertising that has been hailed by marketing professionals as among the most powerful and influential of the twentieth century."
The thirty-year old Oppenheimer undoubtedly encountered strong resistance to his marketing suggestions. After all, the diamond business was not doing well and why should a mining company advertise finished products that it did not manufacture or sell? Oppenheimer’s approach was very risky and innovative. He bought into the concept of selling an idea — not a product. The idea was that a diamond is the ultimate symbol of love. The result of his initiative was the "A Diamond is Forever" campaign. And as they say the rest is history.
There are a few important lessons here. First, Oppenheimer succeeded because he was not afraid to support innovative ideas. Given the circumstances, his thinking was definitely "outside-the-box." Second, the best ideas are often the unintended consequences of being forced to deal with serious problems. If the diamond industry had been doing well who knows if Oppenheimer would have ever had to come up with a marketing solution. Perhaps the "A Diamond is Forever" concept would have never seen the light of day. Third, marketing and advertising is not something you do only when business is doing well. The opposite is true. You need marketing even more when times are tough. Finally, a good idea is forever. The marketing concept of "A Diamond is Forever" is as strong today as it was 41 years ago. In fact, it is about to get even stronger due to its linkage to the new De Beers Forevermark branding concept.
The Politics of Business
Oppenheimer’s personal interests drove him to politics and he served as an opposition member of the South African Parliament from 1948 to 1957 when he resigned to become chairman of De Beers. To his credit, Oppenheimer recognized the fact that industry has social, ethical and moral obligations to society. There is more to running a business than simply making as much money as you can. Throughout his career, he used his economic position to support initiatives that countered the negative effects of apartheid. He said at the time, "If you are running a big company in what is still a comparatively small country, you find yourself in the gray area where politics and business mix, and I think that on certain politically sensitive matters, such as the equality of black and white labor, businessmen have to speak out."
The lesson here is that you can’t run a company without taking responsibility for the social and economic ramifications of your business activity. This lesson is as true today as it was then. It directly relates to De Beers' responsibility to refrain from unfairly restricting the profitability of the diamond trade. Furthermore, it applies to the issue of conflict diamonds and the role our industry must play in assuring that diamonds do not fund wars.
Mistakes
My favorite Harry Oppenheimer story is based on a conversation that I had with him in 1982 at the World Diamond Congress in Israel. I complained that De Beers had lost control of diamond prices following the investment diamond boom and that all the different things they did to try and fix the problem did not work. They put on a rough surcharge, they took away the surcharge, they changed assortments — nothing helped, prices just kept falling. At a speech later that day Oppenheimer admitted that De Beers had made mistakes and this is what he said: "What should the policy of Anglo American and De Beers be? Should we never try anything new? Should our policy be to never make mistakes? I think not. On the other hand should we repeat our mistakes? Of course not. No, the policy of De Beers must be to make new mistakes."
Harry Oppenheimer was telling us that he cared, that he was trying to solve a difficult problem and that he was willing to take risks to get the job done. He knew that his world was not perfect and that many problems, whether they were declining diamond prices or apartheid, could not be easily solved. But he was going to do his best to try.
Perhaps the greatest lesson to be learned from Harry Oppenheimer is that he was a player with a heart. He did not hide from the challenges of his day nor from the responsibilities of his position. He mixed business and politics because they reflected who he was and what he believed in. He had the honesty to admit his mistakes and he had the vision and idealism to believe that problems could be solved.
Undoubtedly, there was much more to Harry Oppenheimer than these few paragraphs can convey. While his contributions to the diamond industry were many, his greatest gift was his ability to lead by example. Those that knew him respected him. Not because he was rich and powerful, but because he used his integrity to fairly balance competing interests and his honesty to make the right decisions.
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Tags:
Anglo American, Conflict Diamonds, De Beers, Israel, Jewelry, South Africa
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