The Problem with Titles

This will no doubt be a controversial post, and it’s more of a rant than I usually write. I’ll also admit up front that I always try to present solutions alongside problems…but this is one problem that doesn’t have an obvious and practical solution.  I hate titles. My old boss from years ago at MovieFone used to say that nothing good could come from either Titles or Org Charts – both were “the gift that keeps on giving…and not in a good way.”

I hate titles because they are impossible to get right and frequently cause trouble inside a company. Here are some of the typical problems caused by titles:

• External-facing people may benefit from a Big Title when dealing with clients or the outside world in general. I was struck at MovieFone that people at Hollywood studios had titles like Chairman of Marketing (really?), but that creates inequity inside a company or rampant title inflation
• Different managers and different departments, and quite frankly, different professions, can have different standards and scales for titles that are hard to reconcile.  Is a Controller a VP or a Senior Director?  And does it really matter?
• Some employees care about titles more than others and either ask or demand title changes that others don’t care about.  Titles are easy (free) to give, so organizations frequently hand out big titles that create internal strife or envy or lead to title inflation
• Titles don’t always align with comp, especially across departments. Would you rather be a director making $X, or a senior manager making $X+10?
• Merger integrations often focus on titles as a way of placating people or sending a signal to “the other side” — but the title lasts forever, where the need that a big title is fulfilling is more likely short term
• Internal equity of titles but an external mismatch can cause a lot of heartache both in hiring and in noting who is in a management role
• Promotions as a concept associated with titles are challenging.  Promotions should be about responsibility, ownership and commensurate compensation.  Titles are inappropriately used as a promotion indicator because it inherently makes other people feel like they have been demoted when keeping the same title
• Why do heads of finance carry a C-level title but heads of sales usually carry an EVP or SVP title, with usually more people and at least equal responsibility?  And does it sound silly when everyone senior has a C level title?  What about C-levels who don’t report to the CEO or aren’t even on the executive team?
• Ever try to recalibrate titles, or move even a single title, downward?  Good luck

What good comes from titles?  People who have external-facing roles can get a boost from a big title. Titles may be helpful to people when they go look for a new job, and while you can argue that it’s not your organization’s job to help your people find their next job, you also have to acknowledge that your company isn’t the only company in the world.

Titles are also about role clarity and who does what and what you can expect from someone in a department.  You can do that with a job description and certainly within an organization, it is easy to learn these things through course of business after you join.  But especially when an organization gets big, it can serve more of a purpose.  I suppose titles also signal how senior a person is in an organization, as do org charts, but those feel more like useful tools for new employees to understand a company’s structure or roles than something that all employees need every day.

Could the world function without titles?  Or could a single organization do well without titles, in a world where everyone else has titles? There are some companies that don’t have titles. One, Morning Star, was profiled in a Harvard Business Review article, and I’ve spoken to the people there a bit. They acknowledge that lack of titles makes it a little hard to hire in from the outside, but that they train the recruiters they work with how to do without titles – noting that comp ranges for new positions, as well as really solid job descriptions, help.

All thoughts are welcome on this topic.  I’m not sure there’s a good answer.  And for Return Pathers reading this, it’s just a think piece, not a trial balloon or proposal, and it wasn’t prompted by any single act or person, just an accumulation of thoughts over the years.

I just said this to a fellow little league coach, and it’s certainly true for baseball.  I’ve coached games with sloppy and/or blowout wins in the past.  You take the W and move on, but it’s hard to say “good game” at the end of it and feel like you played a good game.  And I’ve coached games where we played our hearts out and made amazing plays on offense and defense…and just came up short by a run.  You are sad about the L, but at least you left it all out on the field.

Is that statement true in business?

What’s an example of a “bad” win?  Let’s say you close a piece of business with a new client…but you did it by telling the client some things that aren’t true about your competition.  Your win might not be sustainable, and you’ve put your reputation at risk.  Or what about a case where you release a new feature, but you know you’ve taken some shortcuts to launch it on time that will cause downstream support problems?  Or you negotiate the highest possible valuation from a new lead investor, only to discover that new lead investor, now on your Board, expects you to triple it in four years and is way out of alignment with the rest of your cap table.

On the other side, what’s an example of a “good” loss?  We’ve lost accounts before where the loss was painful, but it taught us something absolutely critical that we needed to fix about our product or service model.  Or same goes for getting a “pass” from a desirable investor in a financing round but at least understanding why and getting a key to fixing something problematic about your business model or management team.

What it comes down to is that both examples – little league and business – have humans at the center.  And while most humans do value winning and success, they are also intrinsically motivated by other things like happiness, growth, and truth.  So yes, even in business, sometimes a good loss is better than a bad win.

I had a great networking meeting yesterday along with Tami Forman, the CEO of our non-profit affiliate Path Forward, and Joanne Wilson, my board co-chair.  It was a meeting that Joanne set up that the three of us had been talking about for over a year.  Joanne made a great comment as we were debriefing in the elevator after the meeting that is the foundation of this post.  Tami and I shaped her comment into this metaphor:

Finding wood to help start a fire is different from pouring gasoline on a fire

As an entrepreneur, you need to constantly be asking for help and networking.  Those meetings will shape your business in ways that you can never predict.  They’ll shape your thinking, add ideas to the mix, kill bad ideas, and connect you to others who can help you in your journey.

But you need to have a good sense of who to meet with, and when, along the way.  Some people, you can only meet once, unless they become core to your business, so you have to choose carefully when to fire that one bullet.  Others will meet with you regularly and are happy to see longitudinal progress.  Regardless, being clear on your ask is critical, and then backing up from that to figure out whether this is the one bullet you can fire with someone or whether it’s one ask of many will help you figure out if you should push for that networking meeting or not.

Why?

Because asking someone to help you find wood to start a fire (the early stages of your business) is different from pouring gasoline on an existing fire (once you’re up and running).  If you’re in the super early stages of your business and looking for product-market fit, you won’t want to meet with people who aren’t conceptual thinkers, who aren’t deep in your space, or who might only see you once.  Maybe they can help you brainstorm, but you’ll find better partners for that.  They might be able to provide concrete help or introductions, but you’re probably not ready for those yet.  It’s a waste of time.  You need wood to start your fire, and people like this aren’t helpful scouring the forest floor with you to find it.

However, those people can be fantastic to meet with once you have product-market fit and are deep in the revenue cycle.  You have clear demonstration of value, customer success stories, you know what works and what doesn’t and why.  You can have short, crisp asks that are easy for the person to follow-up on.  They will be willing to lend your their name and their network.  You have a fire, they have a cup of spare gasoline, and you can get them to pour that cup on your fire.

The judgment call around this isn’t easy.  Entrepreneurial zeal makes it abnormally comfortable to call on any stranger at any time and ask for help.  But developing this sense is critical to optimizing your extended network in the early years.

My father-in-law, who is a doctor by training but now a health care executive, was recently talking about an unusual medical condition that someone in the family was fighting.  He had a wonderful expression he said docs use from time to time:

When you hear hoof beats, it’s probably horses. But you never know when it might be a zebra.

With experience (and presumably some mental wiring) comes the ability to recognize patterns.  It’s one of those things that doesn’t happen, no matter how smart you are, without the passage of time and seeing different scenarios play out in the wild.  It’s one of the big things that I’ve found that VC investors as Board members, and independent directors, bring to the Board room.  Good CEOs and senior executives will bring it to their jobs.  Good lawyers, doctors, and accountants will bring it to their professions.  If X, Y, and Z, then I am fairly certain of P, D, and Q.  Good pattern recognition allows you to make better decisions, short circuit lengthy processes, avoid mistakes, and much better understand risks.  The value of it is literally priceless.  Good pattern recognition in our business has accelerated all kinds of operational things and sparked game changing strategic thinking; it has also saved us over the years from making bad hires, making bad acquisitions, and executing poorly on everything from system implementations to process design.  Lack of pattern recognition has also cost us on a few things as well, where something seemed like a good idea but turned out not to be – but it was something no one around the Board table had any specific experience with.

But there’s a limitation, and even a downside to good pattern recognition as well.  And that is simple – pattern recognition of things in the past is not a guarantee that those same things will be true in the future.  Just because a big client’s legal or procurement team is negotiating something just like they did last time around doesn’t mean they want the same outcome this time around.  Just because you acquired a company in a new location and couldn’t manage the team remotely doesn’t mean you won’t be able to be successful doing that with another company.

The area where I worry the most about pattern recognition producing flawed results is in the area of hiring.  Unconscious bias is hard to fight, and stripping out markers that trigger unconscious bias is something everyone should try to do when interviewing/hiring – our People team is very focused on this and does a great job steering all of us around it.  But if you’re good at pattern recognition, it can cause a level of confidence that can trigger unconscious biases.  “The last person I hired out of XYZ company was terrible, so I’m inclined not to hire the next person who worked there.”  “Every time we promote someone from front-line sales into sales management, it doesn’t work out.”  You get the idea.

Because when you hear hoof beats, it’s probably horses.  But you never know when it might be a zebra!

Why We Occasionally Celebrate International Talk Like a Pirate Day

No kidding – next Monday is September 19, and that is, among other things, International Talk Like a Pirate Day. We’ve done a variety of things to celebrate it over the years, not the least of which was a series of appropriately-themed singing telegrams we sent to interrupt all-hands meetings.  I can’t remember why we ever started this particular thing, but it’s one of many for us.  Why do we care?  Because

We are serious and passionate about our job and positive and light-hearted about our day

This is another one of Return Path’s philosophies I’m documenting in my series on our 13 core values.

I’m not sure I’d describe our work environment as a classic work hard/play hard environment. We’re not an investment bank. We don’t have all 20something employees in New York City. We’re not a homogeneous workforce with all of the same outside interests. So while we do work hard and care a lot about our company’s success, our community of fellow employees, solving our clients’ problems, and making a big impact on our industry and on end users’ lives, we also recognize that “playing hard” for us means having fun on the job.

It’s not as if we run an improv comedy troop in the lunch room or play incessant practical jokes on each other (though I have pulled off a couple sweet April Fool’s pranks over the years). But as the value is worded, we try to set a lighthearted and positive atmosphere. This one is a little harder to produce concrete examples of than some of our other core values that I’ve written up, but that doesn’t mean it’s any less important.

Whether it’s talking like a pirate, paying quiet homage to our unofficial mascot – the monkey, stopping for a few minutes to play a game of ping pong, or just making a silly face or poking fun of a close colleague in a meeting, I’m so happy that our company and Board have this value hard-wired in.  Life’s just too short not to have fun at every available opportunity!

The Value of a Break

I’ve written before about our sabbatical policy as well as my experience with my first sabbatical five years ago.

I just got back from another sabbatical. This one wasn’t 100% work-free, which breaks our rule, but after a few false starts with it, when I realized a few weeks before it started in January that I either needed to postpone it again or work on a couple of things while I was on a break, I opted for the latter.  The time off was great. Nothing special or too exotic. A couple short trips, and lots of quality time with Mariquita and the kids.

Re-reading my post from my last sabbatical now, I realize I have re-learned those same three lessons again — that I love my job, my colleagues, and what we are working on.

But I also recognized, in three different ways, the value of a break this time around maybe more than last time.  Maybe it’s that I’m five years older or that I’ve been doing the job for five more years.  Maybe it’s because the last couple of years at work have been incredibly intense and both physically and mentally taxing.  But regardless of cause, the outcome is the same — I return to work today rested, healthy, a little tanner, a few pounds lighter, and with more clarity, resolve, and ideas for work than I’ve had in a long time.

Not only did I recognize this with Return Path on my sabbatical, but during my sabbatical, I also reengaged with two organizations (Princeton and the Direct Marketing Association) where I sit on boards and used to be extremely active but have been pretty dormant for a couple of years. The perspective I gained from that dormant time not only gave me new energy for both, but I think very focused and creative energy that I hadn’t seen in a couple of years.

Even with a little work sprinkled in, 6 weeks off and disconnected from emails, the office, and regular meetings is a blessing that I hope everyone gets to experience at some point in his or her career.

Corporate Sniglets

This might be showing my age, but those who may have watched Not Necessarily the News in the 80s might remember the Sniglets segment that Rich Hall pioneered which spawned a series of short, fun books. Sniglets are words which are not in the dictionary, but which should be. I can remember a couple of examples from years ago that make the point — aquadexterity is the ability to operate bathtub dials with one’s feet; cheedle is the orange residue left on one’s fingers after eating a bag of Cheetos.

As is the case with many companies, we have made up some of our own words over the years at Return Path – think of them as Corporate Sniglets. I’m sure we have more than these, but here are a few that we use internally:

• Underlap is the opposite of Overlap. My colleague Tom Bartel coined this gem years ago when he was leading the integration work on an acquisition we did, as in “let’s look for areas of Overlap as well as areas of Underlap (things that neither companies does, but which we should as a combined company).”
• Pre-Mortem or Mid-Mortem are the timing opposites of Post-Mortem. We do Post-Mortems religiously, but sometimes you want to do one ahead of a project to think about what COULD go wrong and how to head those things off at the pass, or in the middle of a project to course-correct on it. I believe my colleague George Bilbrey gets credit for the Pre-Mortem, and I think I might have come up with Mid-Mortem.
• Frontfill is the opposite of Backfill. While you Backfill a position after an employee leaves, you can Frontfill it if you know someone is going to leave to get ahead of the curve and make sure you don’t have a big gap without a role being filled. Credit to Mike Mills for this one

RPers, are there others I’m missing?  Anyone else have any other gems from other companies?

B+ for Effort?

Effort is important in life.  If Woody Allen is right, and 80% of success in life is just showing up, then perhaps 89% is in showing up AND putting in good effort.  But there is no A for Effort in a fast-paced work environment.  The best you can get without demonstrating results is a B+.

The converse is also true, that the best you can get with good results AND without good effort is a B+.

Now, a B+ isn’t a bad grade either way.  But it’s not the best grade.  In continuing with this series of our 13 core values at Return Path, the next one I’ll cover is:

We believe that results and effort are both critical components of execution

We’ve always espoused the general philosophy that HOW you get something done is quite important.  For example, if the effort is poor and you get to the right place, maybe you got lucky.  Or even worse, maybe you wasted a lot of time to get there.  Or if you burned your colleagues or clients in the process of getting to the right place, a positive short-term result can have negative long-term consequences.

But when all is said and done, even with the most supportive culture that values effort and learning a lot (more on that in the next post in this series), results speak very loudly. Customers don’t give you a lot of credit for trying hard if you’re not effectively delivering product or solving their problems.  And investors ultimately demand results.

Our “talent development” framework at Return Path – the thing that we use to measure employee performance, reflects this dual view of execution:

The X axis is clearly labeled “Performance,” meaning results, and the Y axis is labeled “Potential – RP Expectations,” which basically means effort and fit with the culture at Return Path.  We plot out employees on the basis of their quantitative scores coming out of their performance reviews on this grid every year.  Which box any given employee falls in has a lot to do with how that employee is managed and coached in the coming months.  We’re always trying to move people up and to the right!

The definitions of the different boxes in this framework are telling and speak to the subject of this post.  To be an A player here, you have to excel in both effort and results – that’s our definition of successful execution.

Happy Thanksgiving, everyone!  We’re getting to the end of this series…only two more to go.

The Nachos Don’t Have Enough Beef in Them

Short story, two powerful lessons.

Story:  I’m sitting at the bar of Sam Snead’s Tavern in Port St. Lucie, Florida, having dinner solo while I wait for my friend to arrive.  I ask the bartender where he’s from, since he has a slight accent.  Nice conversation about how life is rough in Belfast and thank goodness for the American dream.  I ask him what to order for dinner and tell him a couple menu items I’m contemplating.  He says, “I don’t know why they don’t listen to me.  I keep telling them that all the people here say that the nachos aren’t good because they don’t have enough beef in them.”  I order something else.  Five minutes later, someone else pounds his hand on the bar and barks out “Give me a Heineken and a plate of nachos.”  The bartender enters the order into the point-of-sale system.

Lesson 1:  Listen to your front-line employees – in fact, make them your customer research team.  I’ve seen and heard this time and again.  Employees deal with unhappy customers, then roll their eyes, knowing full well about all the problems the customers are encountering, and also believing that management either knows already or doesn’t care.  Or both.  There’s no reason for this!  At a minimum, you should always listen to your customer-facing employees, internalize the feedback, and act on it.  They hear and see it all.  Next best prize – ask them questions.  Better yet – get them to actively solicit customer feedback.

Lesson 2:  Always remember another person’s person-ness, especially if he or she is in a service role.  The old story about the waiter spitting and coughing in the obnoxious customer’s soup would dictate that self-preservation, if nothing else, should inspire civility towards people who are serving you, be it a B2B account manager or a waiter in a diner.  Next best prize – self-interest to get a higher level of service.  Better yet – engagement and kindness like you’d want people to show you.  Chances are, they’re trying to make your day a bit better.  Shouldn’t you try to do the same for theirs?

(Lesson 3:  Always listen to your bartender!)

What a View, Part III

We are in the middle of our not-quite-annual senior team 360 review process this week at Return Path.  It’s particularly grueling for me and Angela, our SVP of People, to sit in, facilitate, and participate in 15 of them in such a short period of time, but boy is it worth it!  I’ve written about this process before — here are two of the main posts (overall process, process for my review in particular, and a later year’s update on a process change and unintended consequences of that process change). I’ve also posted my development plans publicly, which I’ll do next month when I finalize it.

This year, I’ve noticed two consistent themes in my direct reports’ review sessions (we do the live 360 format for any VP, not just people who report directly to me), which I think both speak very well of our team overall, and the culture we have here at Return Path.

First, almost every review of an executive had multiple people saying the phrase, “Person X is not your typical head of X department, she really is as much of a general business person and great business partner and leader as she is a great head of X.”  To me, that’s the hallmark of a great executive team.  You want people who are functional experts, but you also need to field the best overall team and a team that puts the business first with understandings of people, the market, internal dependencies, and the broader implications of any and all decisions.  Go Team!

Second, almost every review featured one or more of my staff member’s direct reports saying something like “Maybe this should be in my own development plan, but…”  This mentality of “It’s not you, it’s me,” or in the language of Jim Collins, looking into the mirror and not out the window to solve a problem, is a great part of any company’s operating system.  Love that as well.

Ok.  Ten down, five to go.  Off to the next one…

Not Just About Us

When we updated our values this year, we felt there were a couple critical business elements missing from this otherwise “how” series of statements.  One thing missing was our clients and users!  So we added this value to our list:

Not Just About Us:  We know we’re successful when our clients are successful and our users are happy.

This may be one of the most straightforward statements of all our values, so this will be a short post.  We serve lots of constituencies at Return Path.  And we always talk about how we’re a “People First” organization and what that means.  I suppose that inherently means we are a “Client Second” organization, though I’m not sure we’d ever come out and say that.  We do believe that by being People First, we will ultimately do the best job for our customers. 

 That said, we aren’t in business just to build a great company or to have an impact on our community.  Or even our shareholders.  We are also in it for our customers.  Whether we are producing a product for mailers, for ESPs, for ISPs, for security companies, for agencies, or for end users, we can’t forget that as an important element of our success every day.