Why Startups Should Rethink Job Titles
Photo by Brooke Lark on Unsplash
In a fast and fluid environments, titles can create more headaches than clarity.
I’ve been thinking about job titles lately, as they pertain to small startup companies that are gearing up for fast growth. And I think I’m in favor of holding off on them, at least as they are currently used.
The problem with using job titles is that founders tend to give everybody lofty job titles such as director or vice president. There are reasons for this — new hires may be the only ones doing their job, and elevated job titles often come in lieu of near-term salary security. But the problem with making everybody a director or vice president is that someday, probably sooner rather than later, your company is going to outgrow these early-stage workhorses. Then you’re going to be faced with some difficult conversations.
When you’re starting out, you depend on having smart, hard-working collaborators who share your founder dreams. While they may heroically manage to get all of the work done today, tomorrow you’re going to need to hire a new breed of leader: one who has scaled an organization, hired people, and developed teams or training programs to empower the company to go faster and build with the efficient use of capital.
When that day comes, you’re going to have to find job titles for these new people that are elevated above director or vice president. For example, if you already have a vice president of finance in your $2 million company and need to add a more strategic, more experienced, financial leader to get to $12 million, you have to bring in a CFO. In all likelihood, this CFO will not be the right person to lead your company past $50 million. At that point, you need to bring on a still more senior leader.
What will you call this person?
By eliminating job titles you save yourself the problem of having to constantly “demote” or fire people who are doing an excellent job for you, saving yourself a lot of headache.
In addition, until you are in it, you will never fully grasp how time-consuming and frustrating it can be to have frequent conversations with well-intentioned employees who are wondering why “she got that title” and I didn’t. This can be a real drain on productivity and morale.
In place of job titles, I suggest using the ever versatile “head of” to indicate what they do and how they list themselves on their resume. “Head of” connotes both leadership and expertise in a given area. For example, “Head of Sales” or “Head of Finance” might work.
Let me know how you and your company are handling the issue of job titles.
Sincerely,
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All credit to my ghostwriting partner, Dave Moore, who is instrumental in getting my thoughts out in a coherent manner & into these blogs. Thanks Dave!