Presidents Corner - July 2011
History has pages for nations, especially those that excelled. The same applies to brands and products. There is no need to go back too far in history to see this trend.
In the 19th century, Great Britain was the dominant force in the world– Britannia ruled the waves. The U.S. took this mantle from the British in the mid-20th century. And it seems as though the Chinese are in the process of taking the mantle from the declining American Empire.
I was sitting on the porch of our favourite spot at Taj Exotica in Goa, India, observing a gaggle of geese in the pond acting in what was clearly an organized manner - whatever direction the leader took, the remaining geese followed. I assume that none of the geese ever attended a business school or had been trained, however they acted in quite a purposeful manner as part of a group.
India, which was the crown jewel of the British Empire from the second half of the 14th century, was the predominant source for diamonds entering Europe. Portuguese navigator, Vasco da Gama, discovered the sea route to India in 1498, by sailing around the Cape of Good Hope. This new and easier route soon led to European dominance of the Indian diamond trade. Consequently, the Indians have been in the diamond trade for over 600 years.
Taking another sip of my gin and tonic it suddenly dawned on me that Vasco da Gama not only discovered the route to India but also opened the gate to the Portuguese diamond trade in Goa. And I am now sitting at a luxury hotel in Goa watching a gaggle of geese and trying to understand how the history of the world developed hand in hand with the diamond business.
I was thinking about the warning my son mentioned that the U.S. may default on its trillions of national debt. I calmed myself with the thought that the senators who are opposing to extend debt ceiling will eventually come to a compromise. The U.S. Treasury has printed trillions of dollars, predominantly held by the Chinese- so what are they worried about? No such thing can ever happen in India.
I tried to figure out how this chaotic continent became a leading economic player? What makes the Indians so successful? Upon arrival at the Taj Exotica, the hotel presented us with a welcome back chocolate cake. It was a very touching gesture; however, following a stern warning about maintaining a low calorie intake, we did not dare to touch it. On the second day, the cake started to attract the attention of the ants and flies. They became really excited and filled the room, disrupting my afternoon nap.
I contacted housekeeping to remove the cake with the flies. Two serious looking guys promptly arrived; one holding a tennis racket. I was a bit taken aback; was this guy going to chase the flies away one by one? What a novel service!
I was a bit skeptical but knowing the problem-solving ability of the Indians, I thought I would just wait and see. The guy surprised me - he just passed the racket around the flies and I realized it contained an electric trap. In less than two minutes all the flies had been taken care of, swiftly and efficiently. Once again, I learned a great lesson - executive power has to be simple, clean, and electrifying.
Approximately 30 years ago, India was the biggest consumer of sugar in the world.
Last year India was recorded as the biggest gold consumer. India accounted for 24% of total world gold consumption in 2010, with the fastest growth rate. That is more than the US. What a dramatic transition - from sugar to gold.
The diamond industry in India employs 1 million polishers; the number of software engineers may be even greater. However half of the products exported from India are consumed by the U.S. So how can it be, that even with its economic troubles, the U.S. is still the biggest consumer market of the world?
If China and India became so rich and successful serving America and selling their diamonds and software to the USA – with almost all sales on credit and borrowing – how can it be that America is in dire financial straits? My G & T was finished and I understood - the world is round, what is down today, may be up tomorrow; only values and principals will prevail.
The U.S. has values and they are willing to make sacrifices. The sun rises in the East but sets in West.
Diamonds don’t lose their sparkle, they are forever.