For me, the only question is, “Why did it take so long?”
It was 13 years ago in July 2005 when I wrote: “De Beers should begin manufacturing synthetic diamonds. Crazy, huh? Rather than fighting the inevitable, perhaps the company would be best to embrace it.”
At the time I noted that De Beers was fully aware of the dire consequences synthetic diamonds could cause to the natural diamond market and that the company’s scientists were developing technology to accurately identify the lab-created ‘menace’.
After all, the diamond behemoth had an enormous income stream to protect so, for me, it was not a matter of ‘if’ but ‘when’ it would begin selling lab-created stones.
My reasoning was simple: you can’t win a game you’re not playing. Indeed, in 2005 I asked, “Have you ever seen a game won by a spectator?”
As the synthetic diamond market expanded, bringing increased quality and production capacity, De Beers and, more importantly, the wider financial and investment industries would have wondered whether they were witnessing innovation or disruption.
The sceptics or, more precisely, the nay-sayers probably viewed the expanding synthetic market as mere innovation, dismissing the slow advances as merely improvements in technology and therefore production.
“Not much will change,” the nay-sayers would’ve said at the time; "Synthetic diamonds will not be a threat to natural diamonds!”
To some extent, that was probably a reasonable position up until only a few years ago; however, at some point since, people have started realising that they aren’t witnessing innovation but instead witnessing full-scale disruption.
Don’t be fooled; there’s a big difference between the two – innovation is the product of changes within a market while disruption is a change to the overall market itself, often significant enough to turn an entire industry on its head.
Disruption changes how traditional business practices are viewed and transactions conducted. Consumer behaviour is altered forever, usually because the ‘new way’ is more efficient and valued by the consumer. Whereas innovation improves and advances, disruption often damages or destroys existing categories or markets.
That’s the last thing De Beers wants, it would lose ‘control’!
Not all innovation leads to disruption. Indeed, the majority doesn’t; you can have innovation without disruption but not vice versa. However, I’m guessing at some point De Beers had to consider the ramifications of not acting or, if you like, not reacting to the continuing innovation of the lab-grown diamond manufacturers and marketers.
How can you win a game you’re not playing?
Extending the sporting analogy to include basketball parlance, De Beers has always been seen as the jewellery industry’s ‘point guard’. All eyes are on point guards because they call the offence, direct the moves and control the speed of the game.
Furthermore, as any basketball aficionado will tell you, the best point guards can control the opposition too, often without them even knowing it!
Potentially confronted with a type of Moore’s Law, De Beers had to no choice but to start playing the synthetic game and it did exactly that on May 29, 2018.
Six months down the road we can ask: Was this decision a strategic move to ensure that competitor innovation did not become blanket disruption or was it because De Beers finally saw the light and realised lab-grown diamonds are not a menace after all?
Perhaps it’s even a little bit of both, or perhaps it doesn’t really matter anyway!
Our Great Diamond Debate might help you decide.
'The Great Diamond Debate' Contents »