Startup job titles have become a bit of a joke these days. Does anyone really need a Chief Innovation Ninja?
I once talked to a Chief Revenue Officer at a three-person company.
A Chief Revenue Officer at a three-person startup? Really?
Yet, as a founder, it can still be very tempting to give an employee a much larger title than they deserve for several reasons.
- They can serve your own ego by allowing you to project a larger or more senior company than you actually have.
- They can inflate the ego of others, by giving them more credibility and seniority than they deserve.
- They can attract job candidates who are looking to make what they perceive to be a good career move by jumping up several legs on that ladder at once.
- They can save you money on salary if a hire is willing to exchange some of their salary for a larger title (many often are).
While many of these strategies may feel good at the time, none of them are going to help you in the long term. In fact, they will likely come back to bite you.
This Is What Happens When You Hand Out Inflated Job Titles
Let’s take, for example, the senior-most software engineer in your company of fewer than 5 people.
In the very early days, you are going to rely on them to do things that a potential VP of Engineering or CTO will eventually need to do, but, does that mean they should carry the role of CTO right now?
Unless they have been a CTO before, the answer is no.
While they may be able to “do the job” right now, what will happen whenas you grow? Will they still be a ‘fit’ when you have 100 employees?
Putting a C-Level position in place too soon virtually guarantees that you will outgrow the hire at some point.
When the time comes to hire an actual CTO, how will you fit them in? Will your not-quite-CTO be willing to take the demotion?
You’ll probably end up keeping them in place much longer than you should.
You may even have to fire them – thus losing a senior person on your team only because you gave them a promotion that they didn’t need.
So then, how should you go about hiring and assigning titles at your startup? Here are a few of the rules of thumb that I advise startups to follow.
1. Don’t Use Titles to Attract/Retain/Impress To Employees
Startup job titles serve a very simple purpose at your startup. They recognize the job that someone is already doing, and they help define their ability to do it.
Don’t use job titles to do more than that.
Some startups will attempt to use them as a persuasion device to attract or keep talent. This is a mistake.
While I do acknowledge that startups provide a great opportunity for candidates to take the next step in their career, make sure it is only one step up the ladder. For example, hiring a Junior level person to become a ‘Director ‘makes no sense and adds unnecessary risk. Moving a Junior level person to a standard title, however, is probably O.K.
2. Use Startup Job Titles Appropriate For Your Stage of Business
It’s probably going to be a while before you need a C-Level anything.
Both I and my co-founder at CoSchedule went without titles for the majority of our time running a business together. We only adopted C-level titles (CEO and CTO) when it became necessary to distinguish our roles to potential investors.
Always use titles that are proportionate to the size of your startup and keep the organization as flat as possible. At a 20 person startup, you probably only need one manager besides yourself. Use generic titles like Lead or Supervisor to keep job title inflation to a minimum.
3. Give The Same Titles That Any Other Business Would Give
Your best course of action is to simply match your team’s seniority level and titles to those that any other company would give them.
I like to think that there is a universal system of titles and rules that govern how job titles should be assigned. For the most part this quite true, so try to fall in line here and avoid reinventing the wheel. It’s ok if your titles boring and don’t contain the word “ninja” or “hero.” Show off your innovation somewhere else.
4. Give People The Title They Deserve, Not Want
Many people will push for bigger titles and more responsibility than they have earned. Some will even feel entitled to it and it may become very tempting to cave just to keep them on your team.
You might lose some people this way, but in the end, that’s better than putting the wrong person in the wrong seat.
5. Whenever Possible, Hire People Who Have Already Done The Job
Hiring people that haven’t done the job you are asking them to do will slow you down 100% of the time. The reality is that you can’t afford to train them and you don’t really have the time to let them figure it out.
This can work differently when you are promoting from within, but only if you have an extreme level of confidence that you can coach them yourself or have someone else in the organization that can coach them. Don’t promote expecting that they will simply rise to challenge without a model to follow.
Big Titles Are Bad For Employees Too
Last but not least, you have to realize that over-inflated startup job titles hurt the employee just as much as they hurt you.
Take the example that I outlined above. You could end up “spoiling” a perfectly good and professional relationship by promoting someone too soon.
Not only do you set them up for frustration and failure in the job, but the experience will likely follow them. You could be doing long term damage to their career.
At a minimum, they will end up with a bruised ego, and you will end up having a conversation that could have been easily avoided.
Tread carefully. You’ll thank yourself someday.