May 1, 2016

Don’t hide your light under a ridiculous title

Recently I’ve been handed various business cards with the designation “founder” on them:

clearly certain entrepreneurs have caught the disease of falling for bogus job titles. To me, putting founder (rather than some executive position) means they had either been fired or had resigned.

Of course, big businesses have suffered from this syndrome for many years. Naively I imagined the self-employed fled the corporate world to escape such nonsense. But it appears that even start-ups have succumbed to the profusion and pretension of vanity titles.

Investment banks are among the worst offenders. Goldman Sachs calls thousands of staff vice-presidents, but a recent legal case determined that such grand-sounding employees are not even officers of the company. In fact, it hands out the title to roughly a third of its employees. Goldman does this to bestow phoney status on these thousands of foot soldiers, and to fool clients into imagining they are talking to senior executives.

Many companies think that fancy titles are a cheap substitute for pay rises. A little like recognition awards, they supposedly celebrate key staff members. But firms have an increasing tendency to spray “chief” in front of all sorts of roles — chief technology officer, chief information officer, chief creative officer and so forth. So now a business has a whole “c-suite” full of such putative grandees. The professionals call it “over-titling”. One might argue that title inflation is harmless, and if it makes the recipients happy, then why not? I must admit, I can’t really see a serious problem in it, except that it reveals a surprising amount of status anxiety among the executive class.

While corporate titles might give the superficial appearance of science, in fact the names owe more to fashion than anything else. Most professionals derive a great deal of their self-esteem from their jobs, so the name given to their occupation can seem terribly important. In fact, what matters is what you do and how well you do it, but the whole game of office politics can often trump execution in large organisations. Email addresses are a giveaway in this arena. Most of us just put our name, as in luke@ and so forth. But some feel the need to insert posher designations, for example adding LordShakespeare@, or CharlesDickensOBE@ . As ever, such affectations just serve to show how insecure the person is.

Titles can tell you quite a lot about the politics and ego of a board. In public companies, I have found that the presence of a deputy chairman often spells trouble. Typically, the post is taken by a thwarted would-be chairman, part-owner or ex-CEO who has been booted upstairs — all of whom still crave power.

I once served on a board with a combined finance director/deputy chairman. He was the éminence grise who really pulled the strings in the business — which eventually had to be sold, before it fell apart.

Stating the obvious: job titles should accurately reflect your position, role and responsibilities. I don’t believe they should be identity badges or overblown designations. Calling waiters or cooks in a fast-food restaurant “Warriors”, “Champions” or “Heroes” — as some US chains do — sounds fake and condescending to me. I doubt it actually makes staff happier in their work. But then America has always had more of an appetite for insincere corporate culture than we do. Certain fashionable companies have almost entirely abandoned job titles — with mixed results. Zappos, the online footwear retailer, has adopted what it calls “holacracy”, an entirely flat management structure.

Unfortunately, it seems that staff struggle with the lack of a career ladder, together with confusion over who is in charge. In 2015, the business suffered a 30% turnover of staff. It may be that formal hierarchies still work for most of us.

I realised more than 25 years ago that chairman was a marvellous designation. It meant you could call the shots when it suited, but that you were much less restricted than the chief executive in terms of your duties. Meanwhile, I have come across businesses that have a separate chief executive, a managing director and a chief operating officer. To me, the operations are the business, so I don’t know how one distinguishes between the three jobs. Who makes which decisions? I suspect such a complicated leadership model indicates a dysfunctional organisation.

Job titles in business are often the classic case of form over substance. The secret is to look beyond the appellations and identify the real talent, regardless of how they are labelled.