Trading cash for inflated job titles will slow your startup's growth and break your agility
It’s a relatively new trend, but it seems to stick around. Companies are trading higher salaries for inflated job titles, that neither represents the skills nor the position of the individual within the company. I have seen startups promote their solo project manager to Directors of Program Management, a role that usually manages multiple projects and project managers. Only in this case, there is only a single project and no further project manager. Director of Design, but you are the only designers in the company? Engineering Manager, but you are a full-time coder? Sounds like a job title bubble!
Now, how does this job title mania impact the growth of startups and their agility?
If you take a superb hands-on senior developer, the best coder you have in the company, and you want to promote them, what do you do? You can give out a nice bonus or increase the salary. OR, the cheaper option, you can promote the coder to Tech- or Team-Lead. What does this mean? The brilliant coder will be forced to “manage” things. Totally unclear about what to manage, the coder will run around, talking to people and wasting their own and other coders' time. Productivity will go down, management overhead will go up. You just lost your best coder in a rally to make him or her stay, for free. You just lost your best coder trying to save money by promoting with role rather than the appropriate cash.
Decreasing agility through management overload
This is something that you can usually see in big companies, but with the title-mania also starting to be more present in smaller companies. With an average startup consisting of 70% management and only 30% hands-on people, the ratio is simply off. With your designer being Director of Design, you just added another voice to the room of managers, calling on decisions. Suddenly, talking about an engineering question, you have 20 people in the room, trying to manage the output to their advantage. You have your marketing working student sitting in as CMO, you have your IT guy sitting in as Sr. Director of IT Management and you have your best coder sitting in as Engineering Manager. Suddenly, you…