Why job titles have a negative impact on the workplace

Job titles make a lot of sense in a GE-style hierarchy. They are nearly impossible to translate in a world where “Product Manager” means seven different things at seven different organizations, and where 43% of U.S. workers are projected to be self-employed by 2020.

Without clear value and meaning, titles are little more than outmoded markers of status (or, at least, the ability to negotiate the trappings of status). They emphasize superficial distinctions among employees and encourage them to fixate on the next promotion—or the next job with the more impressive title.

In startups, where teams are in the business of building something from scratch, titles move from problematic to toxic. They appeal to the ego and our sense of possibility, encouraging candidates to jump into a risky venture. Which is why venture capital firm a16z encourages startup founders to give out titles: employees want them and they are virtually free.

They aren’t. They create a ball and chain that encourages people to act the way a “VP of Business Development” would act rather than taking on whatever initiative a startup needs to reach its next milestone.

When my co-founder and I started our company, Hello Alfred, we tried a different approach focused on goals. Instead of filling conventional boxes on an org chart, we started with the company mission and outcomes we needed to achieve. We wrote these specific outcomes on post-its and moved them around into practical groups that became a collection of goals a team member could own. Posted on the office wall, everyone could see the goals they were responsible for as well as the goals of their teammates.The groups of goals needed no names—we were all working towards the company mission. Today, I firmly believe this makes us a more creative, collaborative, fungible, and resilient organization.

Here’s how organizations can rethink titles and focus on people, not boxes.

Titles can be particularly problematic for startups, where lean teams and rapid growth set the stage for inflation and infighting over status. And it often starts when co-founders are quick to divvy up the C-suite slots before they’ve even begun to grow. Better to follow the example of Michelle Zatlyn, a co-founder of SaaS platform Cloudflare who waited years before adding COO to her profile and thus set the tone for a mission-driven—not status-focused—culture.

Although she understands why many startups give away titles to attract talent (they’re free, after all), Zatlyn and co-founder (and CEO) Matthew Prince chose to hold off and still managed to hire some of the tech industry’s standout talent. As the company grew, 100-plus employees were identified by the teams they reported to. Once the startup began to grow beyond 120, they “added a bit more structure,” Zatlyn told me, with titles like “Engineering Manager” and “Tech Lead.”

“The lack of titles gives us lots of flexibility in how we build our organization,” she said. “It allowed us to keep early team members in meaningful positions without having to create a ton of VP or SVP titles.” Or, she added, without having to demote them: “Basically, if you give someone a VP title in the first 100 people, it is unlikely they are going to be the VP for that same team when you are 500 people.”

Taking a more creative approach to job titles has proven benefits. In a study by Business School Professors Adam Grant and Dan Cable 450 employees created their own, new titles and after one quarter reported being 16% more satisfied with their work and company than employees in a control group. Creative retitling is a good first step, but it’s really only changing the label on the box. Better to scrap the box entirely.

While we use traditional titles at Hello Alfred for external communications, our internal handles are the teams, or pods, to which we’re assigned—e.g., Activation, Expansion, Habit, and (our humor intact) New World Order. Practically speaking, this means “titles” and responsibilities evolve every few weeks or quarters, along with the goals and teams tasked with achieving them. As pods reconfigure, different people come together bringing different strengths and expertise, making for a more collaborative, dynamic workplace.

When it comes to hiring, we basically ignore candidates’ titles on their resume. Instead we look at the companies where they’ve worked, how long they worked there, and how the companies grew during their tenure. We make a lot of effort to understand what a candidate’s team looked like, what the true responsibilities were, and how they evolved.

We aren’t trying to minimize accomplishments or diminish achievements. Quite the opposite: it’s about putting the spotlight on exactly those things. That’s why I didn’t hire a CRO—I hired the guy who suggested to Jonny Ives and Dr. Dre that Apple should acquire Beats and then helped them seal a landmark cultural business deal.

No one gets out of bed in the morning, looks in the mirror, and thinks, “I’m the VP of Product.” Titles don’t get us fired up; it’s envisioning achievement—“Today, my team will nail the customer interaction that gets more people to try our product.”—that spurs us to action.

So, if it seems too daunting or unrealistic to kill titles across the company, you can start with you. Scrap your own title, look in the mirror, and call yourself the thing you want to achieve: “I am building an unparalleled product team” or “I am making DevOps a competitive advantage for us.”

Share it with your team, maybe even put it on your signature line. You’ll have a title designed to remind you what you are working to earn everyday.