Should a Tech Company Running a Thousand Miles an Hour Be Stingy with VP Titles?

It Tastes Better as a VP

This is a surprisingly important question, and I have gotten the answer wrong more than once. My first mistake was saying titles are stupid. Then I flip-flopped and said they matter a ton and should be handled with extreme care. Then I flip-flopped again.

There is a right way to do this and this article is the story of how I learned that the hard way.

When I took my first job in tech, I claimed the COO title on day two. In hindsight, it was probably overly assumptive and maybe even arrogant. Oh well, I was hired by the CEO to come in as a peer and help him grow the company in all areas. Sounded like a COO gig to me and in the absence of anyone else claiming the title on LinkedIn, I did. It was naive, but it worked.

Having a COO created a funny dynamic. Our CEO didn’t call himself the CEO at the time. He usually deferred to “partner” or often “programmer” in meetings. We had another senior guy with a director title and that was about it for big titles. There may have been one or two managers, but pretty much everyone in the company had a title that reflected what their job was and nothing more. We had developers, account managers, and support agents.

So, like a bull in a china shop, I show up and start calling myself the COO. All of a sudden we have a COO, but no CEO.

I wish I could go back and hear the conversations around the office. “So Patrick is like the COO? Can he do that? Is Reid the CEO? What am I?” Reid stthat multiple people I hired have told him that when they started they thought he was just a programmer that I treated well because our wives were friends. Brandon Owen said there was a weird moment for him in his early days when I asked Reid for something and he said “hang on, not now.” Brandon thought Reid was going to get fired on the spot for insubordination.

Everything you do sends a message.

Without realizing it, I had sent a message that we were now a company that had titles. Apparently, I also showed everyone it was perfectly ok to take a title as long as it was unclaimed and reasonably appropriate for your role. It didn’t take long before we went from a COO and one director to a COO and a dozen directors. It seemed like everyone was a director or senior something. Sigh . . . My fault.

It didn’t really matter though, I thought. Everyone was still running really fast and doing whatever it took to get things done. We just had a weird cocktail of titles floating around LinkedIn and being used in client meetings. Instead of seeing it as a problem, we embraced it. We bragged about changing our title depending on the audience and it was fun. It was fine. Until it wasn’t.

It became not fine when we hired a VP.

I had built a fledgling sales team and we were ready for them to really take off, so we brought in a VP Sales. It was a great hire. He was perfect for the role and took us to new heights. Unfortunately, adding a VP had two unintended consequences.

1. We were now a company that had VPs.

Every career advancement milestone marker is important, but the promotion (or jump) to VP stands above them all. It is a universally recognized status symbol, marking the transition from employee to executive. It’s a big deal. At least it should be.

Everyone knew we were loose on titles (see the sudden and rapid rise in “director” level titles), but no one flippantly claimed a VP title. Everyone knew that was out of bounds. While my title grab was certainly a breach of etiquette, I did not promote myself onto the executive team. You can’t just claim to be an executive. Obviously.

Now that we had a VP, our people became aware that it was possible to ascend to that level and it instantly became an important near-term career goal for several of them. One day, I didn’t have to worry about whether someone was deserving of a VP title. The next day I did.

2. The only VP in a company is a big deal. One of three dozen VPs is cool, but not a huge deal.

Our VP Sales was awesome. He brought tremendous value to our organization and was deserving of the extremely high status he held in a successful growing company. He enjoyed that status and believed it made him more effective in his role. He was right. His title granted him access to anyone in our company. It made his requests higher priority. It eliminated confusion on who was driving the sales growth. It was valuable to him to be the only VP.

Adding more VPs through promotion or outside hires reduced the value of his title. If his title was worth $10, every additional VP was a $1 tax. The moment we named the 10th VP, his title would become worthless. He did not want a worthless title.

Now you see the problem. One VP means you will quickly have your very best employees tell you they would like to know what they need to do in the next 18 months to become VP_____. You will be under immense pressure to create more VPs.

VP titles will become an extremely valuable resource at your company, but the value of the title is directly tied to its scarcity. People holding a VP title prefer fewer VPs. You will be under immense pressure from two sides: your top performers are now seeking to join a club while the existing members of that club are trying to barricade the doors.

Talking about titles feels like the opposite of innovation.

It’s frustrating to talk about titles. It feels like a total waste of time. As a high-growth tech company, we should be tackling new problems, shipping new features, and bringing in enterprise clients. We shouldn’t be arguing over titles. A title does not produce value. Or does it?

For a long time we fought against creating a complex title structure. We treated VP titles as sacred and were honest with people about their chances of obtaining one (unlikely). We went a number of years with a single VP. It was a mistake.

Titles have value. We knew that, but we failed to leverage it to our advantage because we wanted to avoid adding complexity. It was a mistake. We left our very best people feeling underappreciated and undervalued. They placed a very high value on career advancement, and we were limiting it by refusing to create a meaningful title structure that allowed them to publicly demonstrate their progress. Stupid.

The tipping point came when we needed to bring on a new lead for product. Our CEO had carried the responsibility previously, but we had reached a size where that no longer made sense. It slowed us down and made it difficult for him to be a great CEO. It was a critical hire, and this person would absolutely be a key member of the executive team. We found the perfect candidate, but there was a problem. She already worked for us, and she had never been on a product team.

Problem #1: She was leading our marketing department at the time, which made it difficult for some people to understand why she was perfect for the role.

Problem #2: She also had less seniority than many of the people who had been previously rebuffed on a VP title.

When in doubt, stay true to your values.

She was simply the best person for the job, and we had a firm policy of “Put our best people on our biggest challenges and opportunities” regardless of title or seniority. It was a selling point for us. Come work for us to shortcut your career!

We were worried about the effect the change might have on the retention among our A players, but we moved forward anyway. It was the right call. It did two things for us.

1. It showed that we meant what we said about our best people.

While people still wanted a clear path to a title, no one questioned the move. Everyone knew how good this woman was. She was the best, and people knew it. They respected her, and they respected us for giving her the chance. It worked. She proved capable of keeping up with our CEO and challenging him. She successfully led product for several years and became a cornerstone on the executive team.

2. It forced us to get organized on titles.

Like so many valuable things, you cannot access the value until you embrace the complexity. If we wanted to keep our best people, we needed to ensure they were experiencing consistent career growth. Titles had been an overlooked component of career growth and advancement.

Titles are your most valuable and lowest-cost employee retention tool. Don’t waste them by being thoughtless.

We analyzed our organizational structure to get a clear picture of where we were. Then we looked at where we needed to be. Nothing new there. This was a frequent exercise for us. The difference was, this time we created meaningful titles within each function. This time we created more title-only layers to denote progress and seniority. We were thoughtful about the approach and solicited feedback. We learned a lot in the process.

  • We learned that “Senior” was a very useful addition for people. It was an effective signaling device internally and externally. It allowed us to add more perceived value while servicing our clients with “senior” consultants. It ensured that new hires knew who they should be taking notes from while they learned the ropes.
  • We learned that the best way to maintain the integrity of titles while still growing and retaining your best people was to add layers. We started with one VP and ended up with multiple EVPs and several VPs when I left.
  • We learned that it’s important to stick with standard titles that are universally recognized. Don’t allow your people to be cutesy with titles like “Director of Getting Things Done” because there is near zero upside and a whole lot of downside. For every person that thinks the title is “cool” there are ten (or a hundred) others rolling their eyes. The coworker who worked hard to get their senior manager title is pissed because the value is diminished when viewed alongside a meaningless title intended to entertain. The same is true for your enterprise prospects and clients. They may smile politely, but they are not amused. If you want to be taken seriously, then get serious about titles. You owe it to your employees.

Should you be stingy with your VP titles? Probably not. Should you give them away? Absolutely not. You need to stop being lazy and start overthinking titles. The title needs to mean something. If you are growing, you shouldn’t lose good people over title availability. You have to figure out how to maintain the integrity of the title while avoiding an unnecessary glass ceiling for your best employees. It’s hard. It’s different for every company. It’s complex.

Embrace the complexity and create a title structure that communicates to your employees and the world that you are a company where people come to learn and grow in their careers while delivering serious value to your customers.

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Tone founder and father of five. I grew a SaaS company to $5m MRR. Now I am trying to do it again and bring a little encouragement to the world in the process.

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Patrick Elverum

Patrick Elverum

Tone founder and father of five. I grew a SaaS company to $5m MRR. Now I am trying to do it again and bring a little encouragement to the world in the process.

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