King of Diamonds Reveals Industry's Inner Workings

As a futurist and innovation coach, I've worked with literally hundreds of industry groups, from manufacturing to retail to distribution. Few of them have fascinated me more than the global diamond industry.

So, when I read King of Diamonds, the behind-the-scenes story of American diamond merchant Harry Winston, I could not put it down. I organized a book signing discussion dinner in Santa Barbara featuring the book's author, Ronald Winston, his oldest son.

Over glasses of California wine and bowls of delicious turkey chili, we were enthralled by the rags-to-riches story that Winston told about his late father -- and growing up the son of such a prominent businessman.

Few American success stories rival that of Harry Winston, who stood just over five feet tall, the epitome of the self-made man.

Born Harry Weinstein in 1896, the family escaped wrenching poverty and periodic antisemitic pogroms (massacres) in Ukraine for the allure of freedom and the American Dream.

Working in his family's jewelry shop, young Harry was sent to scour pawn shops looking for items his parents could resell. On one of these outings, he recognized a two-carat emerald and bought it for twenty-five cents. Days later his father sold it for $800, a massive sum in the early 1900s, and no doubt brought the kid lots of "attaboys" and praise from family and friends.

From that moment on Weinstein became obsessed with gems, especially diamonds. After a stint in California during World War One, Weinstein moved back to Manhattan, suddenly deciding to change his name to the more British-sounding Harry Winston. It was the beginning of an iconic transformation from obscurity into the larger-than-life persona that created one of the world’s most prestigious luxury brands.

"I first realized my father was famous when I heard his name on the radio in 1949 during our annual winter holiday in Palm Beach," recalled Ron Winston, who was eight years old. "The newscaster announced Harry Winston's purchase of the famous Hope Diamond for a million dollars. Back then that was a phantasmagoric sum, like a billion today, and it made my father more than just a dad. It was more than a little intimidating."

Harry Winston's work ethic was second to none. He arose at 5:30 am, exercised, and worked feverishly in the business, returning to the family's Fifth Avenue apartment at 8 pm each evening. He built his reputation one wealthy client at a time: the wife of the Texas oilman from Houston, the New York socialite, the Hollywood mogul's wife. "He was known by the rich and famous as being someone they could trust and he never pandered to them," recalled Ron.

After being robbed at gunpoint in his store, Harry Winston became obsessed with security. He warned his son to keep a low profile at all times. "I had no idea how much there was to be protected from in the diamond world," noted Ron Winston. "There were unscrupulous business rivals, treacherous colleagues, and powerful, vindictive clients."

Always looking to promote his wares, Harry Winston began adorning Hollywood starlets with sparkling, expensive diamond necklaces as they walked the runway at the Oscars. The strategy backfired when one of them, actress Sharon Stone, refused to give back the necklace she'd been loaned, claiming it was a gift. She eventually relented, but not until lawyers got involved.

Then too, there was the actual procurement of the great stones, which were mostly mined in the deepest, darkest Africa. At the time, South Africa-based De Beers had a tight grip on the supply, and on pricing, a true monopoly if ever there was one. Eventually, Harry Winston had a schism with De Beers, and the lack of supply nearly cost him his business.

Winston, always the creative problem solver, came up with the solution to try and purchase mines in Africa. This proved a disaster -- his partners cleaned him out. Instead, he enrolled his son Ron to establish direct ties to diamond mines that were not controlled by De Beers, leading to harrowing adventures, which Ron tells in the book.

Each foray required hiring mercenaries to protect his team, and one of those men put a gun to his head and told him to wake up. They transported millions of dollars in cash to pay diamond miners. And they exported millions of dollars in raw stones in scenes worthy of a movie. While Ron Winston was at first reluctant to enter the family business, he eventually did and became CEO until the company was sold to the Swiss Swatch Group in 2013.

As the evening's host, I asked Ron to read from his work, which he did. Here in his own words was the well-told story of a colorful life lived by a man who was the epitome of the American Dream.