Most CEOs are an urgent breed.

Every CEO I know laments how they need to instill a stronger sense of urgency in their company around every single thing, to get things done faster.

However, there is one very important thing they should have zero urgency around.

In fact, they should try to delay it as much as possible; ideally, forever.

I’m talking about titles. Specifically, Director-level and higher (Senior Director, VP, SVP) titles.

I’m talking about building a company of several thousand people where not one person is a Director, Senior Director, VP, SVP or EVP.

I’m talking about building a culture where scope and impact — not titles — are recognized and celebrated.

To illustrate the state of titles among tech companies, I submit the following email that I received from a CEO:

“After speaking with a few successful founders that I trust, it’s clear that to become a billion dollar company, a VP of Engineering is CRITICAL for the application we’re trying to build at this stage. Is there someone you know or can you help us find this person? We’ve been actively reaching out to people ourselves but would love to leverage our network. I wrote a blurb below to make it easy for you to forward. Thank you so much for your help.”

Any guesses how many engineers this company has?

Four.

Yup. A VP of Engineering for a four person engineering team.

I receive at least two emails per month of this type. Startups looking to hire a VP of Engineering for a sub-ten person engineering team, or a VP of Product for a two person product team. I now have enough data points from companies both small and large that I can say with reasonable confidence that title-conferring within tech companies is at an all-time high.

Let’s talk titles.

Why Titles

In his excellent book The Hard Thing about Hard Things, Ben Horowitz has a section called “Titles and Promotions”. He talks about why titles matter, and distills the reasons for companies creating job titles down to two primary ones:

1. Employees want them. Employees want titles to accurately reflect the scope of their role at the company, so they can use them in external settings (eg: future job interviews, business partner negotiations, customer meetings, etc).
2. People need to know who is who. Titles provide a shorthand to describe roles in the company, and enable employees to get to the right person to get something done.

Both these reasons are logical and sound. And any construct around titles (or eliminating them) should respect these principles. Let’s call them Horowitz’s First and Second Law of Titles respectively.

Mo’ Titles, Mo’ Problems

While titles serve the two important roles outlined above, they lead to several challenges that lead to sub-optimal behaviors and undermine the culture and values of a company.

1. Titles become a motivator. I know — and I’m sure you do too — dozens of people at companies whose primary goal at the company is to “make Director” or “make VP”. Behind every single action is whether or not it helps them get closer to the next level on the ladder. If it takes too long, they start getting antsy. A Product Director complained to me about the lack of the Senior Director title at his company, since the time to make VP was too long and demotivating to him. When senior employees derive motivation from titles than from their work, you know something is broken.
2. Titles lead to entitlement. Whether or not you realize it, people at your company will use titles to signal and assert their power and bypass or even sabotage the normal decision making and execution processes of the company. For example, some companies have fortnightly or monthly “Director” meetings attended by people with Director-or-higher titles. There are individuals or leaders whose scope or impact far exceeds some Directors at these meetings, but feel excluded purely because of their (lack of) title. Other companies send out celebratory emails when people are promoted to Director. Each such instance undermines the perception of the company as a meritocracy and aggravates the feeling that a Director or VP title is required to have any influence or impact at the company, fueling the title as motivator point above.
3. The title parade never ends. Once you confer the Director or VP title on one person, you are signaling to every person in the company that titles are fair game at your company. Get ready for every person in the company (who deems themselves ready for the title) to campaign for a title in both subtle and unsubtle ways, for almost every accomplishment possible. Your sales leader will want the VP promotion upon closing a new customer. Your product leader will want to make VP upon launching that compelling product feature. That great young marketer you just hired a few months ago will threaten to leave unless you make them Director of Marketing. Is this how you want to spend your time as a CEO?
4. It’s impossible to untitle (Part 1). Imagine you hired a VP of Engineering early in the company’s life. A couple of years into their tenure, you realize they are a great culture fit, are beloved by their team, and are getting things done. You want to keep them at the company but you have realized they are not the right fit to lead the organization through the next stage of growth. What do you do? You are faced with some unappealing choices: (a) Hire a new VP of Engineering, maintain the title for the VP of Engineering and have them report to the new VP. (b) Hire a new VP of Engineering, change the title of the VP of Engineering to a Director of Engineering and have them report to the new VP. (c.) Hire a SVP of Engineering, maintain the title for the VP of Engineering, and have them report to the SVP. Let’s examine these options. Option (a) leads to confusion in the organization (a VP reporting to another VP?) and will lead to all your VP-reports in other organizations clamoring to be made VP to be at the same level as your old VP. Option (b) leads to your original VP leaving. What is crazy is that the ONLY reason they left is likely due to the title change. They likely would have stayed if you brought on a senior leader who they could learn from, and they had a clear, well-defined role. Option (c.) leads to a new title being created, with the predictable effect that every VP-level person at your company now immediately has a new target for their ambition — SVP. Welcome to the big leagues.
5. It’s impossible to untitle (Part 2). Another common example is when someone switches from a people manager back to an Individual Contributor (IC) role. I’ve known people stay Director of product, engineering or marketing, even after they moved into an IC role that was far narrower in scope and impact than their previous role, just because it’s impossible to untitle people. This breeds confusion and resentment from other ICs who have the same scope and impact as these people, just not the title.

A Simple, Battle-Tested Proposal

So how do we satisfy Horowitz’s laws of titles while avoiding the problems outlined above?

Here’s a simple proposal:

a. Descriptive titles for individual contributors: Create job titles that precisely articulate what the person actually does. For example, Software Engineer, Firmware Engineer, Business Development Representative, Product Manager, Product Marketing Manager. This forces you to clearly spell out each person’s high level job description concisely as part of the job title, which is an excellent organizational design goal in and of itself.

b. A better label for people managers: Use the term “Lead” (or a similarly generic term) for all people managers. This word replaces “Manager”, “Director”, “VP” or any other titles. Also make people manager titles as descriptive as possible. For example, Product Management Lead, Firmware Engineering Lead, <ProductName> Engineering Lead, <ProductName> Product Lead, <Geography> Sales Lead.

This philosophy around titles has been battle-hardened for the past several years at Square. Square has normalized around “lead” as our one people manager title. No directors, managers, Vice Presidents. Just “XYZ lead”, where XYZ is as specific as possible. This philosophy has allowed us to scale to 2,500+ people around the world without any of the title-related challenges I outlined above. We still celebrate and recognize people stepping up in scope and/or impact, we just don’t celebrate titles. Except for CFO and General Counsel, every member of Square’s leadership team has the title of “XYZ Lead”.

How does this proposal adhere to Horowitz’s laws while bypassing the challenges? Let’s examine both these topics a bit more closely.

Horowitz’s Laws

1. Employees: The “Lead” title has never been an impediment to our recruiting great people to Square. Great people focus on the scope and impact of their role, not on the title. In fact, starting a discussion around the lack of “Director” or “VP” in their title, is an excellent “tell” and an easy signal that this person would not be a good fit at Square. It works the other way too — when people leave Square to join other companies. Turns out most companies care about what you have done or accomplished in your prior role, not what your title was. We’ve had people move from Square to other companies, and not in a single case did their title (or lack thereof) prevent them from getting the role they wanted. In fact, a puffed-up title without solid evidence to back it up, is one of the fastest things to uncover through a backchannel check.
2. Org navigational shortcut: Given the descriptive nature of titles, it’s fairly easy to both understand what a person does, and to reach the right person if you have a question. For example, if you meet an engineer, you can see from their title if they are a Firmware Engineer on the Hardware team, an iOS Engineer on the Point of Sale team, or a Server Engineer on the Payments Platform team. Similarly, if one wants to ask a question about the Payments roadmap, just reach out to the Payments Product Lead, who can direct you to the right person.

Avoiding Title-Related Challenges

1. Titles are no longer a Motivator. There are no titles to aspire to. Every People Manager is a Lead. What motivates is increased scope and impact, not title.
2. Titles do not drive Politics: Since there are no titles, meetings and announcements cannot segregate people based on titles. Nobody knows (or cares) what a “Director-level” title even is. Politics based on title are minimized.
3. The title parade has ended. Sorry, we have no new titles to offer.
4. There is no need to untitle. Leads report to other Leads. If a Lead’s role outgrows them, it’s easy to bring in a new Lead who they now report to, without changing their title. If a Lead moves to become an IC, their title changes to the title for that IC role.

Ultimately, all this stems from the fact that unlike “Director” or “Vice President”, there is no power or glory inherent in the “Lead” title — it’s a simple, descriptive name that means exactly one thing — that the person with this title is leading a team of people.

Summary

All this advice is most applicable at the earliest founding stage of your company; once you give out a title, you’re headed down a path there is no coming back from.

If you are a CEO thinking about hiring your first people manager and wondering what title to give them, don’t. Avoid the heartache, pain and future organizational challenges that come from — and with — titles.

There might come a time when you absolutely, positively need to give out your first Director or VP title, but you should defer that instance as long as possible. You have more important things to worry about. Go build a titleless company. Your people, your company, your investors will thank you for it.