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Tuesday, June 05, 2007

Security Advice

I think the advice is also good for gem miners, dealers in rough colored stones and diamonds, and gemologists who love to travel to exotic places looking for stones in Africa, Asia, South America and the United States.

Don't Look a Leopard in the Eye, and Other Security Advice
(via Wired) Bruce Schneier writes:

If you encounter an aggressive lion, stare him down. But not a leopard; avoid his gaze at all costs. In both cases, back away slowly; don't run. If you stumble on a pack of hyenas, run and climb a tree; hyenas can't climb trees. But don't do that if you're being chased by an elephant; he'll just knock the tree down. Stand still until he forgets about you.

I spent the last few days on safari in a South African game park, and this was just some of the security advice we were all given. What's interesting about this advice is how well-defined it is. The defenses might not be terribly effective -- you still might get eaten, gored or trampled -- but they're your best hope. Doing something else isn't advised, because animals do the same things over and over again. These are security countermeasures against specific tactics.

Lions and leopards learn tactics that work for them, and I was taught tactics to defend myself. Humans are intelligent, and that means we are more adaptable than animals. But we're also, generally speaking, lazy and stupid; and, like a lion or hyena, we will repeat tactics that work. Pickpockets use the same tricks over and over again. So do phishers, and school shooters (.pdf). If improvised explosive devices didn't work often enough, Iraqi insurgents would do something else.

So security against people generally focuses on tactics as well.

A friend of mine recently asked me where she should hide her jewelry in her apartment, so that burglars wouldn't find it. Burglars tend to look in the same places all the time -- dresser tops, night tables, dresser drawers, bathroom counters -- so hiding valuables somewhere else is more likely to be effective, especially against a burglar who is pressed for time. Leave decoy cash and jewelry in an obvious place so a burglar will think he's found your stash and then leave. Again, there's no guarantee of success, but it's your best hope.

The key to these countermeasures is to find the pattern: the common attack tactic that is worth defending against. That takes data. A single instance of an attack that didn't work -- liquid bombs, shoe bombs -- or one instance that did -- 9/11 -- is not a pattern. Implementing defensive tactics against them is the same as my safari guide saying: "We've only ever heard of one tourist encountering a lion. He stared it down and survived. Another tourist tried the same thing with a leopard, and he got eaten. So when you see a lion...." The advice I was given was based on thousands of years of collective wisdom from people encountering African animals again and again.

Compare this with the Transportation Security Administration's approach. With every unique threat, TSA implements a countermeasure with no basis to say that it helps, or that the threat will ever recur.

Furthermore, human attackers can adapt more quickly than lions. A lion won't learn that he should ignore people who stare him down, and eat them anyway. But people will learn. Burglars now know the common "secret" places people hide their valuables -- the toilet, cereal boxes, the refrigerator and freezer, the medicine cabinet, under the bed -- and look there. I told my friend to find a different secret place, and to put decoy valuables in a more obvious place.

This is the arms race of security. Common attack tactics result in common countermeasures. Eventually, those countermeasures will be evaded and new attack tactics developed. These, in turn, require new countermeasures. You can easily see this in the constant arms race that is credit card fraud, ATM fraud or automobile theft.

The result of these tactic-specific security countermeasures is to make the attacker go elsewhere. For the most part, the attacker doesn't particularly care about the target. Lions don't care who or what they eat; to a lion, you're just a conveniently packaged bag of protein. Burglars don't care which house they rob, and terrorists don't care who they kill. If your countermeasure makes the lion attack an impala instead of you, or if your burglar alarm makes the burglar rob the house next door instead of yours, that's a win for you.

Tactics matter less if the attacker is after you personally. If, for example, you have a priceless painting hanging in your living room and the burglar knows it, he's not going to rob the house next door instead -- even if you have a burglar alarm. He's going to figure out how to defeat your system. Or he'll stop you at gunpoint and force you to open the door. Or he'll pose as an air-conditioner repairman. What matters is the target, and a good attacker will consider a variety of tactics to reach his target.

This approach requires a different kind of countermeasure, but it's still well-understood in the security world. For people, it's what alarm companies, insurance companies and bodyguards specialize in. President Bush needs a different level of protection against targeted attacks than Bill Gates does, and I need a different level of protection than either of them. It would be foolish of me to hire bodyguards in case someone was targeting me for robbery or kidnapping. Yes, I would be more secure, but it's not a good security trade-off.

Al-Qaida terrorism is different yet again. The goal is to terrorize. It doesn't care about the target, but it doesn't have any pattern of tactic, either. Given that, the best way to spend our counterterrorism dollar is on intelligence, investigation and emergency response. And to refuse to be terrorized.

These measures are effective because they don't assume any particular tactic, and they don't assume any particular target. We should only apply specific countermeasures when the cost-benefit ratio makes sense (reinforcing airplane cockpit doors) or when a specific tactic is repeatedly observed (lions attacking people who don't stare them down). Otherwise, general countermeasures are far more effective a defense.

Bruce Schneier is the CTO of BT Counterpane and the author of Beyond Fear: Thinking Sensibly About Security in an Uncertain World.

Monday, June 04, 2007

The Horse Whisperer

Memorable quote (s) from the movie:

Tom Booker (Robert Redford): Sometimes what seems like surrender isn't surrender at all. It's about what's going on in our hearts. About seeing clearly the way life is and accepting it and being true to it, whatever the pain, because the pain of not being true to it is far, far greater.

The Jewelry Market In Japan: 2020

Yasukazu Suwa is an insider and an expert. He is a well-known writer on colored stones and well respected in the industry.

Yasukazu Suwa (President, Suwa & Sons, Inc, Tokyo, Japan) writes:

It took about 2700 years to mine and fashion an estimated 0.8 tons of diamonds before the South African discovery in 1867. Currently, about 3.6 tons of polished diamonds are produced each year. Since the beginning of the 20th century, annual diamond mining production has tripled every 30 years. Nevertheless, if all the diamonds polished since the beginning of time were brought together, they would only fill a single double-decker bus.

In addition, only a small percentage of gemstone production is of the finest quality. This percentage get even smaller as production increases. More than ever, we must realize that truly fine gemstones are entrusted to us by nature. After individuals own them for a relatively short time, these gems change hands, either as heirlooms or as estate pieces. As the world market becomes more borderless, fine gemstones and jewelry circulate freely—back and forth between the United States, Europe, Japan, China, and so on. Since new production of fine quality gemstones is limited, recirculation is a major source of high quality material.

Advances in treatments make it possible to convert some previously unusable material into beautiful stones, but these lack the rarity of naturally beautiful gems. Synthetic stones might be attractive, but because theoretically there are no limitations to the quantity that can be produced over time, again they lack the rarity intrinsic to the value of a natural gem.

The current Japanese jewelry market
The emergence of the modern Japanese market began around 1960. Japan’s share of global loose diamond imports rose to 20% by 1985, peaked at 34% in 1991, then declined to 12% by 2005; currently, its share of the world retail market for jewelry is about 10%. Meanwhile, the nation’s retail market shrank from 3 trillion yen to 1.3 trillion between 1991 and 2005.

In 1985, the relative values of Japanese imports of diamonds, colored stones, and finished jewelry were 70%, 15%, and 15%, respectively. By 2005, this distribution had changed to 46%, 6%, and 48%. Diamond imports fell due to a drastic drop in sales of small-carat-size engagement rings. Relative imports of finished jewelry increased as about half the domestic manufacturers went out of business. This increase included super brand goods as well as less expensive jewelry from Thailand, China, and India.

Twenty years ago, most Japanese consumers saw themselves as comfortably middle class. Today, 80% of the population feels that they are in the lower middle class, and few feel that they are rich. The Japanese jewelry business must now deal with two very different market segments.

Looking forward
The future holds a number of scenarios for Japan and the global jewelry industry:

1. Japan will maintain its 10% share of the world’s polished diamond market through 2020, but jewelry imports will continue to grow relative to loose gemstone imports. Meanwhile, the jewelry market will become more polarized. Japan’s high end consumers will prefer rare, high quality untreated gemstones, and they will be asset conscious and more global in their purchases. The faster growing low end market will be dominated by commercial, treated, and even synthetic stones; these shoppers will be more price conscious and purchase locally. Within this polarized market, high end gemstone oriented jewelry will remain the driving force behind all jewelry sales. The low end jewelry market will follow the trends and styles that are established by the more affluent market.

2. Branding and traceability will be more important to consumers worldwide. Where jewelry is made will matter less to consumers, while a manufacturer’s reputation for quality and reliability will mean more. Traceability and positive determination of country of origin will become more important as consumers become more sensitive to issues such as conflict diamonds, child labor in developing countries, and other political and human rights concerns.

3. Recirculation will be more prevalent in the fine jewelry market. Just as the supply of gemstones is now more global, customers for fine jewelry are more mobile than ever. They purchase fine quality gemstone oriented jewelry from all over the world. This trend will continue in the future. The role of gemological laboratories in distinguishing country of origin and methods of treatment will become increasingly important as fine qualities circulate between markets.

How To Extract Gold

(via The National Geographic Magazine)

Some 2½ tons of rock must be processed to produce an ounce of gold and a sliver of silver.

1. Like a mighty nutcracker, steel jaws shatter ore into softball-size fragments. Hand sorters discard pieces lacking gold.

2. After further crushing, the ore mixes with water and enters a revolving cylinder, to be pulverized by tumbling steel balls or bars.

3. Air jets and mechanical arms in agitator tanks mix cyanide into powdered ore and water, called slime. This releases gold from rock.

4. The gold-cyanide solution and slime funnel into vast tanks where the rock particles slowly sink. The clarified solution is fed into filtrations units.

5. Gold-cyanide solution is filtered to strain out any remaining rock particles, and then is deaerated.

6. Zinc dust added to the solution separates the cyanide from the gold, which emerges as an impure powder.

7. The gold is melted with fluxes such as borax. As the metal cools in the bottom of a conical mold, the fluxes combine with impurities and float as slag.

8. Final product: a shining ‘button’ 90 percent gold, the rest silver. Further processing at a central refinery yields the 99.6 percent pure gold.

The State Of The Diamond Market—An Update

- The diamond industry is going through its natural ‘period’. Consumers are more interested in other types of luxury goods and if the trend continues then diamonds won’t be their first choice.

- The so-called diamond banks in Europe, US and elsewhere have started tightening credit facilities for diamantaires, which may directly/indirectly affect the dealers/retailers business one way or the other.

- The Internet is becoming a major challenge/player for new-comers as well as the established ones. High volume, taxes, low margin, and name-recognition are both good/bad news for the business, and the only way to survive in this dog-eat-dog world is to specialize in unique products, improved/innovative customer services, and finding new ways to cut costs to maintain cash flow and profitability.

- Synthetic diamonds are getting more visible, affordable and identifiable.

- It’s believed that De Beer’s market share is roughly forty percent and there will more restructuring in the coming months. The company is also under lot of pressure from the African governments to facilitate/process diamonds locally in order to create more employment for the locals. De Beers may not have that many choices and the real losers will be ‘middle market’ players.

- Even though the Kimberley Process was initiated with good intent, its effective execution may not be up to the mark due to various factors. It is estimated that ten percent of the world’s diamonds are produced in bad conditions for low wages.

- We are going to see more active involvement by human rights groups in various formats.

Sunday, June 03, 2007

Being John Malkovich

Memorable quote (s) from the movie:

Craig Schwartz (John Cusack): There's a tiny door in my office, Maxine. It's a portal and it takes you inside John Malkovich. You see the world through John Malkovich's eyes... and then after about 15 minutes, you're spit out... into a ditch on the side of The New Jersey Turnpike.

Maxine (Catherine Keener): Sounds great! Who the fuck is John Malkovich?

Craig Schwartz (John Cusack): Oh, he's an actor. He's one of the great American actors of the 20th century.

Maxine (Catherine Keener): Oh yeah? What's he been in?

Craig Schwartz (John Cusack): Lots of things. That jewel thief movie, for example. He's very well respected. Anyway, the point is... this is a very odd thing. It's supernatural, for lack of a better word. I mean, it raises all sorts of philosophical-type questions, you know... about the nature of self, about the existence of a soul. You know, am I me? Is Malkovich Malkovich? I had a piece of wood in my hand Maxine. I don't have it any more. Where is it? Did it disappear? How could that be? Is it still in Malkovish's head? I don't know! Do you see what a metaphysical can of worms this portal is? I don't see how I could go on living my life the way I've lived it before.

The Colored Stone Touch

To experience the concept you may have to look at colored stones from the buyer’s/seller's perspective. What are you/they looking for? What are you/they thinking when you/they are buying colored stones for someone you/they love? I bet you may go the extra mile to make that person happy. You may/will learn everything you need to know about colored stones. You don’t want surprises. In my opinion many have no clue as to where the colored stones come from. I think both the buyers and sellers will learn a lot more when they are able to see the source with their own eyes: Translation—the mines and people.

Digging a hole in ground, only to find little or nothing, will teach you something you will never be able to learn from a textbook, lectures or seminars. You will never forget that experience. Seeing is believing. I believe when you find one, and if it’s a good one, you will appreciate and respect colored stones. The invaluable experience will assist, both ways, to make wise choices.

The Business School And The Theatre

The gemological institutes should incorporate the concept in their curriculum so that the students are able to assort role playing sessions and simulate the techniques in the real world. Gem buying, selling, retail management skills require insight, product knowledge and an effective delivery systems so that you are able to connect with the real world. All the world is a stage.

(via Times News Network) Shreya Biswas writes:

All the world’s a stage, and sure enough, these days they are teaching acting at the B-school itself. As management institutes realise the potential of simulation in teaching students how to handle the real thing, theatre workshops, skits and assorted role-playing sessions are all increasingly making their way into the MBA curriculum.

IIM-C, IIM-L, FMS and MDI Gurgaon have taken the lead in this front while corporates like Maruti, Motorola, Philips and Castrol are some who have already incorporated theatre techniques in HR sessions.

Sure, the Indian B-schools have role models to follow in Harvard, Wharton and Darden where the techniques have been already taken to the next level. MDI Gurgaon already has had it as an elective for the last two years and is also going to come up with MDPs on theatre techniques in business communication by December 2007. These techniques help students to internalise various management principles and understand the corporate world better.

Topics relevant to the course are taken up and students come up with skits based on the same. They take up the roles of a leader in a bankrupt company or an HR head facing talent crunch with the top deck of company being poached by rivals, besides trying to explain the effective supply chain management possible in a household kitchen.

Last August, the Dramatics Cell of IIM Calcutta (IIMC) and leading theatre group Nandikar hosted ‘Journey into Theatre’, a workshop to promote acting and performing arts as a tool of communication that extends to real life. The workshop included a host of games designed by Nandikar that modelled situations similar to those encountered in corporate life and explored how managers react to them. These situations ran the entire gamut from negotiations, trust building in a team, politics and business ethics, all courses that are incorporated in IIM(C)’s curriculum.

Says Prof Leena Chatterjee, behavioural sciences, IIMC, “In our second year, we have an elective called ‘management of self in organisations’, which includes several role-playing exercises. This includes role plays on managing team meetings, managing people, performance counselling interview, handling a difficult employee and more. We also use films or novels to look at various kinds of interpersonal issues.”

Enthused by this, Maruti is going to introduce theatre techniques as training tool this year itself. It will be introduced as a part of its management development programme and training for senior leadership roles. Says SY Syddiqui, head, HR, Maruti, “This is an innovative idea and helps to break away from the monotonous way of training people. I saw it in one of the B-schools and will now implement it in Maruti.”

Motorola had a similar workshop in 2005 in theatre techniques as part of their training module. Teambuilding, complex communication methods were all addressed through this. Raghuram Reddum, director, HR, Asia Pacific staffing and mobile device, Motorola, India, says, “These are innovations to better the training process. It helps to get a better grasp on subjects through these techniques.”

While several institutions have been practising it in India and abroad, some like Darden, Harvard, Wharton have taken it to the next level with the sessions being an interactive one. A play is performed by the players and the end of the skit depends on the volley of questions thrown out by the audience. Says Asha Bhandarkar, Professor, organisational behaviour and chairperson, PGP-HR and International Management, “This helps the performing group understand the problems better and suggest solutions while the audience take serious interest in theme played on.”

Agrees Ashok Kapoor, professor, communication and marketing, “Its a great confidence building measure and lets students understand problems and individuals better. Some of my students have even got back with interesting feedback like ‘due to the course, I can understand when my boss is acting and when he is genuinely concerned’. In IIM-L, students, infact record these sessions in their iPods and play it later to understand the issues.