Learnings from Failures: Job Titles
If you’re a founder at a new company, you are or will be in a position to hire more people. This usually comes in tranches — founder(s), founding team, first round of hires post injection of cash, second round of hires to replace some people and to improve key areas, scaling team, etc. This learning is focused on what happens as you move from founding team > first round of hires.
In a previous company, we had an internal cultural conflict. We had a group of team members considered part of a founding team. They were not founders, per se, they were first employees. They were part of the soul of the company, part of the essence that made us unique and would lie in front of an 18-wheeler for the company. They were what every start up would kill for; they were family.
Eventually, we got to a point where we were able to attract some top tier talent in key areas of the company. Once they came on, it was clear that a fundamental mistake was made: we didn’t have clear titles or clear delineation of responsibility. This made integrating them into the organization ambiguous and stressful.
One of the appeals of a startup is to have a flat organization whereby people can wear many hats, be one step removed from the CEO and help wherever it’s needed — founding teams tend to love this. Organizational structure is intended to provide clear scopes of responsibility — functional experts tend to love this. Flat structures purposely muddy scopes of responsibility (“Yay, I can do anything!”). People with functional expertise want their responsibility clearly defined and defended so they can set goals, measure their work and succeed (“Yay, I know what’s expected of me and can do it well!”). Founding team members tend to prefer flat organizations as they tend to be focused on vision and want to take on as much responsibility as possible. People who prefer flat organizations abhor tightly defined responsibilities. You see the conflict?
When you hire experienced functional specialists (e.g. VP of Marketing, Sales, Support or Product), you will need an organizational structure. To make that work, you need clear lines of authority. To make that work, you need a sound job title hierarchy. If you try to implement this after you hire the functional specialists, your founding team will rebel and potentially resent this person for being the forcing function that took away the fun flat structure for the “neat” corporate structure.
What can potentially emerge is the dangerous division of founding team vs. new team. This can create a cliquey environment and be a cancer to your internal culture. It’s important to make clear that “founding team” designation is a time stamp, not a permission setting. All it means is that you came first, not that you have more authority, right or value.
To prevent this potential issue, you have to set up the job title hierarchy before you hire this person so people know what their responsibilities are and who they report to. This makes it easy for your existing team to understand where the new person fits in to the company and feel secure about their standing within the company. If you have to create titles/responsibilities/hierarchy after a functional specialist is hired, your existing employees will inevitably lobby for higher ranking titles, more responsibility and likely resist what you give them. By nature, they want more responsibility faster — it’s why they joined an early stage startup.
Organizational structure can feel responsibility limiting, but it’s required for fast assimilation of new employees and fast scaling. So, do yourself a massive favor and establish clear roles and titles early on. It will save you political headaches and times in meetings assuaging your most enthusiastic and important early employees.
