Momentum Podcast: 434

Titles Matter

by Alex Charfen

Introduction

I believe in running a business in a very progressive way where people feel safe, where they feel empowered, where they know that they can make a mistake and things will be okay, and they can take risks so that things go fast and your business grows quickly. 

One of the ideas that is often passed around in the consulting world today is running a business without giving people titles. It's one of those ideas that should just go away. It is one of the silliest things you can do as an entrepreneur, because if you're going to scale a business fast, titles matter.

Episode Description

If you're going to scale a business fast, titles matter. There are a lot of new age ways to run a business, I consider myself to be very progressive in how I operate my business, but, there are some structures that you just need to stick with. 

You need to have a title for every person in your company. If you're an entrepreneur you need to respect titles in your business. They create clarity, seniority, and authority. When you know where everyone in your organization stands, and your team understands, it makes running your entire business easier. Do you need to identify the brick walls that are between you and where you want to be? Go to billionairecode.com/apply

Full Audio Transcript

Alex Charfen: I believe in running a business in a very progressive way where people feel safe, where they feel empowered, where they know that they can make a mistake and things will be okay, and they can take risks so that things go fast and your business grows quickly.

One of the ideas that is often passed around in the consulting world today is running a business without giving people titles. It's one of those ideas that should just go away. It is one of the silliest things you can do as an entrepreneur, because if you're going to scale a business fast, titles matter.

I'm Alex Charfen. This is the Momentum Podcast. Made for empire-builders, game-changers, trailblazers, shot-takers, record-breakers, world-makers, and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum, so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny; we define it. We don't understand defeat because you only lose if you stop, and we don't know how.

While the rest of the world strives for average and clings desperately to the status quo, we're the minority, the few who are willing to hallucinate there could be a better future. Instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world, because entrepreneurs are the only source of consistent, positive human evolution, and we always will be.

There are a lot of new age, woo-woo suggestions made in running a business that I actually believe in. I think there's a conservative group of consultants out there that just throw everything away. I am a huge believer in creating a company culture. I'm a huge believer in having a culture where people feel safe, where you take care and help your team's mental stability, as well as their financial stability, and you help them grow within your business. When it comes to the world of consulting, I'm out there on the fringe where I think that ... One of my core beliefs is that if an entrepreneur runs a business the right way, it can be one of the most spiritually enlightening experiences of their lifetime, and it can be one of the most spiritually contributory experiences of their lifetime to the people around them and to the world.

So, I don't take a traditional view of running a business where people say it's about profits and don't get caught up in doing something that you care about and those types of things. No, I work exclusively with people who have a passion for what they're doing and are excited about it, and think about it when they're driving and when they're showering and can't stop, and love what they do. I'm not just throwing everything out, but this new age, woo-woo idea of running a business where you don't give people titles, I'm sorry, but it's just silly, and it's not the way you want to run your business. It's going to lead to being one of the most expensive decisions you make. Now, I want to qualify this. Can you do it? Sure you can do it. You can not give anybody titles and just use first names. What ends up happening is people say things like, "Oh, well that's so and so. She's kind of like our CFO." And, "That's so and so. He's kind of like our VP of sales." And, "That's so and so. She's kind of like an executive assistant to the CEO."

If people don't have titles, you have to figure out what they're doing somehow, and it's near impossible not to refer to them in some way like that, because people need a roadmap as to who's in the business. Here's what titles do: They give you clarity. They give you a roadmap. They show seniority, and they show a level of authority. If you strip all of that away, it gets confusing to deal in your business, and it gets really confusing to deal with your business. When I was a consultant, I never actually dealt with a business that went through this, but I talked to friends of mine that were dealing with businesses that had been convinced they should eliminate titles. They would share what an absolute cluster it was. They would tell me how nobody understood who was who. There was an underground org chart that had titles on it that was getting passed around, and that people couldn't understand who they were supposed to go to for things.

Very quickly, those businesses would reverse that idea, because if you want to do this, it's going to take so much effort and so much training and so much change management to let people know how do you deal in a world without titles. I can't remember what company it is, but there's also ... I just read recently about a company that eliminated titles and now everybody just has a level. They have level one through seven and then your discipline. Come on, that's a title. That's the same as a title. That's the same as like junior and then ... like a junior account executive, an account executive, a lead account executive, a senior account executive. That is one through seven, right?

You always have to have some type of a hierarchy in a business. If you're an entrepreneur growing a business, don't stack the cards against yourself, making a decision like I'm going to try and run a business without having anyone have titles, because here's what happens as you're scaling your business. You're the biggest bottleneck to begin with because you know the most information. If you build a business where you don't give everybody clear titles, when someone's confused they're just going to come to you. This idea, it gets me a little frustrated because sometimes I talk to entrepreneurs that were just sold in this. They've read the wrong book, or they heard the wrong keynote, and they've decided that having titles is just something that doesn't matter.

I have news for you: That's absolutely wrong. Anybody who would try and encourage someone not to have titles in their business hasn't scaled a business. If you've converted all the titles in your business from titles to levels one to seven, you're just ... it's a publicity stunt. That's the same as having titles. It's like you've created a different type of hierarchy. What you've created is ... instead of titles, you've created a caste system. You have the caste system for one, and for two, and for three, and for four. It's the same thing, and it's confusing because I don't know if you're a level one designer or a level two salesperson, or what you are. If I know your discipline, then it's basically like you've given me the title anyway, so it doesn't make sense.

If you're an entrepreneur, I want you to respect titles in your business. It's funny how often I talk to a five-person business. There's the entrepreneur who started it, then a COO and a CMO, and a VP of sales, and an executive assistant. Everybody has a C-level title. When you're an entrepreneur, don't give out titles. They matter. They actually mean something because they create clarity. They create a roadmap. They create seniority, and they create authority. The challenge is, if you give away all the authority at the beginning, you don't have any options left, and it looks weird. It looks weird when you have a business that small with titles like that. It looks like you don't really know what you're doing. It doesn't make sense to have all C-level executives in a company.

Titles matter in such a profound way that it's actually emotional for people. In fact, as a consultant, I've used titles to help people solve problems in their business. Let me give you an example, or I'll give you an example of one that's come up over and over again, but I'm going to use an account executive position. Let's say that you're a company that has a large sales floor. You have a sales floor full of account executives. Everybody's an account executive. They all call on clients. You want people to stay in those accounting executive chairs for a long time, but the problem is they get into the accounting executive chair and they decide they want to be the accounts manager or the manager of a department. They want to move up. They see the next move from account executive is to managing account executive, so everybody on the floor who wants to be promoted is gunning for that manager position. When one of them opens up and those people don't get it, they start looking around for other types of ways to get promoted, like going somewhere else.

This is an actual issue that I've helped multiple businesses solve with exactly this problem, where ... An ads agency, this will happen with their ads managers. A sales floor, this happens with salespeople because people want upward mobility. One of the ways we've solved this issue is by actually using titles, by instead of having account executives you have a junior account executive. Then you have account executive. Then you have a lead account executive. Then you have a senior account executive. Then you have a managing account executive, or whatever else it is. What we've done is we've taken sales floors, or we've taken teams of ads managers, or we've taken account executives and created a title hierarchy. Now, people can feel like they're upwardly mobile. We create qualifications for each part of the hierarchy, in whatever situation it is, where the qualifications are what the team, what the employer, what you want people to do. Then they will move through those qualifications, improve in their position, and they feel like they're upwardly mobile.

We solve that issue by creating titles. That's how much titles matter, because here's the reality, is the person is going to stay in the same chair now for a lot longer than they would've been willing to before, but because we've created upward mobility through titles and through the milestones and the requirements those titles have, we actually solve a problem in a business. Just think of what problem it creates in a business when you remove all the titles. It just doesn't make sense. If you're an entrepreneur growing a business, create a clear org chart that shows hierarchy, where every person on the org chart reports to one person, and they have clear titles. If you're growing a team, don't give away all your C-level titles right out of the gate. Hold them back. If you have a COO who doesn't manage any people, the title doesn't make sense. They can't be a COO; they don't manage any people. When you're a COO it means you run all the operations for a business, and you do a ton of people management.

If you have a CMO who doesn't have a team, it's rare in any business that the Chief Marketing Officer is a one-person department. Don't give away titles to people that you hire because it doesn't make sense, and it doesn't give you anywhere to go. Titles matter. They are a huge part of making it easier for you to run a business and lead a team. They provide your team with clarity. They provide you with clarity. They provide the people who deal with your company with clarity, so treat them like they matter. Treat titles with respect. Make sure you have a clear org chart that improves them, and running your business will be easier.

If you want to improve running your business even faster, reach out to us. Go to billionairecode.com/apply. You'll get on the phone with a member of my team. We'll do three things. We'll help you understand where you want your business to be, get clarity on where it is today, and identify the road bumps, the speed bumps, the brick walls that are in between you and getting to where you want to be so that you can formulate a plan how you get around those things. Go to billionairecode.com/apply. The call with one of the members on my team may be one of the most valuable calls you've ever had. Billionairecode.com/apply.

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Alex

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