How important are titles?

Job titles serve a number of purposes, and treating them lightly is done at your peril. Job titles help to indicate organizational structure to newcomers and outsiders, they tell people the relative importance of the person they are working with, and they reward their holders.

Job titles serve a number of purposes, and treating them lightly is done at your peril

Some companies are famous for their disdain for titles, even mocking them, using titles such as chief humor officer, head honcho, and the like. Imagine what the new person, especially from another culture, thinks when they see “head honcho” on a business card. Even if they do understand what the words mean, they either think this person is a joke and not worth working with, or they are confused as to who this person is. Are they so important that they can get away with this joke, or are they such a low person that no one cares what they put on their business card?

These people are missing an important aspect of titles: they communicate to people you meet, in a short and easily understood format, where in the organization this person stands. You see a business card that reads “CEO” or “Managing Director”, and you immediately know that this is the top person in that organization. You can assume they have the power to commit the other organization to agreements you might make. If you see “vice president” you can tell they are not a peon, but that there will be more work ahead to get a commitment on behalf of the entire company (especially if it’s a bank, where VPs seem to multiply like rabbits).

Having titles that are clear, common, and well understood is very important. Choosing “Top Dog” over CEO may seem cute at the time, but it can reflect badly on you and your company. In that respect titles also can communicate company culture, where Top Dog may be fine for a surf shop, but not good for an auto parts manufacturer.

Some use titles to communicate other aspects of culture. For example, in the US choosing Managing Director over CEO sends a message about the company, and perhaps its heritage and even ownership. Many feel that this lends a sophisticated European air to the firm. Of course, that can be overused and even ridiculed, but it is one example of where titles can be used to present one element of organizational culture.

Assign clear, common, and well-respected titles, and dole them out sparingly

Finally, titles are seemingly vital to their holders. Some employees get so wrapped up in their title, that concern over it can get in the way. Even I am guilty of this, writhing in pain over being simply a Vice President of Human Resources at Microsoft, rather than “Senior VP” or “Executive VP” (or, heaven forbid “Chief People Officer” {ugh}). For me it was a matter of respect among my peers in the outside world, where every person in a comparable position in a Fortune 500 had a fancy title. In the end, it really didn’t matter, but I only realized that years later.

This leads people to use titles as compensation, but that’s another question, and you can find that in “Can Titles Be Compensation?”

So, all in all, yes, titles are really important. Design a clear organizational structure, assign clear, common, and well-respected titles, and dole them out sparingly.