Scene: A dinner table.
A discussion is taking place between a father and son. The father, a graduate gemologist, inherited the family jewelry store from his father. He has always made his buying, advertising, and merchandising decisions the way his father did—by what “feels” right and what customers tell him they like. Whatever it is, someone will buy it eventually, he says. His idea of inventory management is to “look in the stock room and see if it’s there,” and his idea of financial solvency is making sure income exceeds outgo.
The son, who recently earned an MBA, is amazed that his father—who doesn’t track day sales, calculate GMROI, or analyze P&L statements—hasn’t lost his shirt, along with the house, the car, and the family silver. He wants to put the store’s inventory on an automated tracking and reordering system and buy only pieces that turn at least 20 times a year, and he doesn’t see why his father keeps track of his customers’ pets but not how many diamonds he sold last week.
The discussion is getting progressively louder, and the wife/mother, who has always quietly made decisions behind the scenes and lent the store what her husband calls “taste,” thinks this might be a good time to have dinner somewhere else.
Successful jewelers know that their businesses need a bit of both approaches to thrive. Such pragmatism is the driving force behind the Gemological Institute of America’s new School of Business. Launched in early 2002 with six classes and approximately 25 students, the new program offers a core curriculum that teaches standard business fundamentals—but with a twist: All classes, whether financial, managerial, or operational subjects, are designed to address the specific needs and quirks of the jewelry industry.
At present, the classes are offered only at GIA’s campus in Carlsbad, Calif., but Dr. Edward Balian, dean of the business school, expects to have distance-learning business classes in place by January 2004. The in-residence classes are 10 weeks long and most students take three at a time. The distance classes, which students will take via the Internet, are expected to run six weeks and will be structured in an interactive format that’s flexible but still provides ongoing communication between instructors and students.
This isn’t the first time the industry’s preeminent educational institution has expanded beyond teaching gemology (GIA already has multiple courses in jewelry design, manufacturing, and sales), but it is the first time it’s instituted a comprehensive program track dedicated to teaching students how to run a business.
Response to the program has been remarkable: In the first 10 months, enrollment leapt 170%.
“We expected to see gemology students migrate to business, but we’re getting students coming first for business and then going on to gemology,” Balian says. Nor is it only would-be retailers who are attending: Students come from all parts of the industry—retail, manufacturing, e-tail, import/export, and design—and from all over the world. In one marketing class (which JCK visited) there were students from Singapore, Thailand, Mexico, Turkey, and the United States, and from almost all of the aforementioned sectors. Likewise, the courses—all of which are taught in English—apply to all aspects of the jewelry industry, and one entrepreneurial science course requires students to design a business in their area of interest. At the end of the term, each business model is evaluated by the whole class, which selects the ones that should get “funded.” In that class (which JCK also visited), about half the students were planning careers in jewelry retailing; the rest were interested in designing, manufacturing, and importing.
Most students in the program already have a college degree, but according to William Herberts, director of education operations, the business school has attracted everyone from high school students to Ph.D.s, along with attorneys, engineers, salespeople, and others.
“We’ve had half a dozen students go out and begin their own businesses [after completing the courses],” he says. “One got hired by Tiffany to be a store manager, and we’ve seen ‘Help Wanted’ ads that specify ‘GIA School of Business graduate.’ ” And sometimes, he adds, the classes teach the most important lesson of all: helping a student realize that he or she isn’t ready for retail. It’s happened already—one entrepreneurial student realized he was nowhere near ready to own a business.
Training the trainers. The GIA School of Business offers a wide range of courses, such as entrepreneurial science, ethics, financial basics, managerial accounting, strategic leadership, business law, inventory management, and marketing. All the instructors have master’s degrees or Ph.D.s as well as teaching experience, says Balian. Some have jewelry experience and others have general retail or business experience as well, but all undergo a rigorous six-month training period. Classes have formalized syllabi, a formalized attendance requirement, and a formalized guest speaker policy.
“We’re not taking this lightly. We’re very serious about it,” says Herberts.
Every class, lecture, case study, business model, and guest speaker is specifically geared to address the ways in which jewelry industry practices differ from standard business practices. “From a standpoint of basic business tenets, the jewelry industry really is unique. It’s not like selling cars or refrigerators or clothes or anything else,” says Balian. For example, aside from the obvious security concerns, this industry has few written contracts but a tight internal network. Selling goods on memo is another unusual practice in general business, and the inventory turn ratios in jewelry are much different from those of most other traditional retail categories. There’s also an important international aspect to the industry, not to mention the recent developments concerning conflict diamonds and allegations that terrorists launder money via jewels. Balian says these considerations are taught with “a venture capitalist’s view”—i.e., to show students how the rest of the business world would view the industry, particularly given the fact that it’s an emotion-laden industry in an unemotional business world.
Courses are structured on a critical-thinking and discussion format, much like typical 300- and 400-level collegiate courses. Case studies are complex, textbooks are detailed, and homework is plentiful. Beginning in January 2003, more classes will be added: Merchandising, business law, and strategic leadership are among those set to begin this quarter. (For a complete listing of classes being offered, see sidebar at right.)
“We’re very focused on the practical—learning, doing, applying,” says Balian. “Students learn lots more skills that aren’t overtly taught but that they need, like teamwork. They don’t just sit in class and listen to lectures.”