Career Ponzi Schemes

We’ve all become familiar with the $50-billion Bernard Madoff investment ponzi scheme. Through a mix of deft misdirection and communication savviness, Madoff was able to convince discerning clients his investment strategies consistently delivered high-returns. It was all a fraud.

The design of Madoff’s fraudulent plan was simple: he used new investments to pay existing investors. It was only when he couldn’t find new investors to pay off existing investors that his Ponzi scheme collapsed.

Reading Paul Williams’ post about Measuring Your Comparable Job Performance triggered an odd, but related, thought. There’s a different type of ponzi scheme that happens at large companies. It’s called the Career Ponzi Scheme. I’ve seen it happen, maybe you have too.

Do you work with someone who transitions into a different role within the company every year? Is this someone asked to lead high-profile projects, yet leaves the project before it’s implemented? And is this someone you’ve often wondered how they continue to have favorable sway with upper-management?

Chances are you’ve worked with someone like this.

This someone is using a Career Ponzi Scheme to advance their position within a company. These “Ponzi People” are savvy communicators, masterful at misdirection, and selectively connected.

Savvy communicators know what to say, when to say it, and whom to say it to. This talent works well in politically-charged and bureaucratic-heavy organizations.

Their misdirection mastery comes into play when something goes wrong with a project they are managing. To avoid scrutiny, “Ponzi People” deftly divert attention away from their mismanaged project to another person’s mismanaged project. They know exactly what to say, when to say it, and whom to say it to for corporate firefighters to swarm in and rescue someone else’s project. Misdirection complete. That is, until the next time they need to misdirect attention away from their poorly managed project.

“Ponzi People” are not the most well-connected. However, they are the most selectively connected people within an organization. Meaning, they purposely buddy-up to only those who are well-connected and on a career trajectory to the top of the org chart. They seek to have sway with only those who have sway. Dig?

Because they nurture their tight network of company influentials, “Ponzi People” are made aware of job opportunities in adjacent departments before anyone else. Through their savvy communication skills, “Ponzi People” position themselves as the best option for the open position.

People who use Career Ponzi Scheme tactics receive pay raises from frequent promotions and they receive the priceless veil of being a vital ingredient in the company’s success recipe.

However, they never benefit from measuring their comparable job performance because they never stay in the same role for more than a year. They laterally bounce from position to position too often to measure their year-over-year contribution to the company.

Eventually, “Ponzi People” get caught. Their Career Ponzi Scheme collapses when they fail to find new admirers with corporate sway to replace those old admirers who have caught on to their misdirection, smooth talking, and networking games. When this happens, their fraud is uncovered and their career freefalls.

The moral of this story is a warning … DO NOT GET CAUGHT IN A CAREER PONZI SCHEME. You are cheating yourself if you use ponzi schemes to advance your career. And if you are someone who enables a ponzi scheme to continue, then you are just cheating your company. Don’t do it.

Comments

[Barchbo]

This is a brilliant analysis. I find it especially interesting since I have see-sawed between education (where the Ponzi style would seldom work) and corporations (where it thrives, sadly.) This is fantastic.

[Steve Woodruff]

The Peter Principle becomes the trigger to eventually get these people out the exit door. Big corporations are loaded with them!

[neff]

Great read but slightly too optimistic in tone. I have witnessed Ponzi People fail badly and get paid to leave - only to translate their "impressive resume" into another high paying position at another unsuspecting company. I think PT Barnum may have said it best: There's a sucker born every minute.

[johnmoore (from Brand Autopsy)]

Steve ... The Peter Principle is similar, but different to me. People using ponzi schemes to advance their career do so at a slow and steady rate. They gradually advance by assuming slightly more responsibility with each new assignment.

Ponzi people can rise to a level of incompetence but that's assuming they were even competent at their initial starting place.

I view "Peter Prinicple People" as once being competent, competent enough to merit a considerable promotion. "Ponzi People" rarely get considerable promotions, their rise is slow but steady until their scheme collapses. Just my take on this inexact idea.

Neff ... excuse my optimistic tone. This post was difficult for me to write. It's been something I've wanted to share for many, many years but never had the right angle to use so I didn't come across as hostile. It wasn't until the Madoff ponzi scheme that I had the proper angle to use without sounding mean. Despite the optimistic tone, you connected with the idea. Cool.

[Steve Woodruff]

The other Ponzi similarity with these folks, of course, is they often expend other peoples' hard-earned work capital/competence/reputation in order to feed their own..

[Tim (@Twalk) Walker]

VERY good post, John. Sad to say, I've worked with people like this who made it into senior management on the strength of personality and outstanding ability to communicate (ergo to manipulate).

The *real* problem is when you get one of the savvier Ponzi people who know, consciously or unconsciously, not to wear out their welcome in one place. In line with what Neff said, I've seen folks like this take high positions in new firms, sometimes again and again. They're still moving laterally in the way you describe, but without ever triggering a true reckoning upon themselves.

Saddest of all: I know a woman who fits your definition perfectly and has wreaked havoc in one organization after another . . . but who lives in enough denial that she genuinely doesn't know why things keep blowing up around her.