Charles Ponzi was the author of the misfortune of many Americans.
His scheme was as simple as it was clever.
He started off by discounting international reply coupons, for postage stamps.
I hired someone I thought was a very good salesman because he did well in interviews. But it soon turned out that he was restless and within a few months we realised his performance was worse than of some whom we had not thought very highly about. Can such workers be avoided?
If you were to carefully listen to yourself, you might realise that what you are telling us is that a man came to you, sold himself to you and you employed him. It is this act of “selling himself” to you that got him to work for you. What else did you know about him at the time? Part of the problem with the method of job interview is the fact that the process lays much weight to a rather artificial setting that has little to do with the real world. A job interview in a boardroom does not tell one much about a real sales situation in the workplace.
It might have been worth your while to find out why he was jobless at the time. Had you gone further to his employment history, you might have realised that he often changed jobs after a few months.
When you asked him why he changed jobs so often, he would have given you what were already clearly half truths. He might for example tell you he left a sales job because the wife of the boss was angry when he rejected her sexual advances. In another case he might blame the boss who expected him to bribe his way to some sales.
In yet another case he might claim that he lost his job because he was from the wrong tribe or religion. A long list of explanations would become increasingly less probable and could include a case in which he did so well that his supervisors threatened his life. In none of the cases would he state that he was at fault.
Asked about referees from past employers, they would either have closed shop, moved out of the country or he would state that he could not locate them.
The job interview is but one of a series of screening tools that one must use in recruitment. Background checks are even more important and are often forgotten when an interviewer is confronted with an intelligent, fast talking sales person, who is full is confident. The art of selling oneself to the pockets of others can lead to catastrophic results.
One of the greatest scams in the history of financial dealings took place in the 20s.
Charles Ponzi was the author of the misfortune of many Americans. His scheme was as simple as it was clever. He started off by discounting international reply coupons, for postage stamps. He soon diverted his eyes and energies to the investing public. He took money from investors by promising them interest rates that nobody else was able to pay. By aggressively “selling” his idea, he was able to continue growing rapidly. As long as he was growing, he was able to pay very high interest rates to those who invested yesterday with the money he received from today’s investors.
Thousands of Americans put millions of dollars on this very crafty salesman. One can recognise a Ponzi scheme in this day and age simply by accepting the fact that if a scheme is able to pay very high interest rates, then the risks to the investor are similarly high. Sooner than later, the promoter will vanish into the thin air and leave investors with worthless paper. That has happened in Kenya.
A scheme such as described requires a number of things. One of the most basic is a team of sales people who are able to dazzle investors by the use of words such as “future discounted options on the funds”.
Inevitably, events such as a sudden increase or drop in interest rates due to say a general election or even the drop of rise in the oil prices can trigger the collapse of such schemes.
One of the better known and recent cases of a Ponzi scheme was the Madoff Investment scandal of 2008. Madoff was reported to the authorities by his sons who worked in the firm and who discovered that theirs was a criminal outfit working on Wall Street.
Bernard Madoff was sentenced to 150 years in jail. Yes, it is possible to avoid bad sales people by a careful search of their backgrounds.
