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Job Titles Are Way More Important Than You Might Think

Job titles can be a significant source of pain for many small family businesses. It plays a much bigger role in your business than you might imagine.

Please consider this little story to illustrate.

I had a good friend many years ago who worked for his father and the family business. My friend had graduated from college and wanted to work for a couple of years and then return to graduate school to earn his MBA.

The normal two-three years of work experience required by most MBA programs was meaningful to my friend. He worked in the business and experienced all the normal, day-to-day issues of running a business. Their company was fairly new and struggled with all the normal stuff—cash flow, communication, HR & operational issues, etc.

Three years went by very quickly and the time came for my friend to return to school.

In that three years, the business had grown to a point where his father needed to hire someone to replace my friends’ position in order to keep up with the work load.

My friend and his father finally decided on a person to hire. The question came up, quite innocuously, what title should we put on his business card. The honest concern was not so much his job responsibility but his title for the card because, at the time, everyone in the management side of the business just came to work and did what was required—there was, in effect, no job titles.

The office admin (my friend’s mother as you might guess in a family business) was assigned the task of getting new business cards printed and was asking the question innocently so she would know what to put on the card. After some brief conversation, she suggested, “How about Operations Manager?” That sounded good to everyone (real official and nice) and that is what they printed on the new employee’s business card in preparation for his arrival.

As mentioned earlier, at the time, the business was small enough that nobody really had a title. The few people in the front office, all family members, pretty much simply did what was required and wore many different hats as needed. The joke, in fact, was that each family member working there had a job title called, The-Mad-Hatter.

Two years of school soon ended and my friend, at the urging of his father, decided to come back to the family business.

It wasn’t long before my friend and the person that had replaced him two years earlier, started having conflicts about operational issues. My friend, using some of his education, had started implement some lean practices by implementing single-piece-flow, 5S and Kaizen events.

My friend had returned to the family business thinking Mad-Hatter was still at play and his replacement was all the sudden insulted because he thought his job was the operations manager (even though he did little in operations and spent most of his time selling and estimating).

This all came to light with an explosive argument where my friend’s replacement took this once innocuous title determined by a side-bar conversation, and put it on display by pulling his business card out of his wallet and stating, “I was hired to be the operations manager!”

In hindsight, this was an obvious mistake but it is one that business owners easily make.

Wise business owners know that there is no such thing as an innocuous title.

Think about that carefully.

As an example, I know many business owners that have two business cards: one that says President or Owner and another one that says Sales Person, or even nothing—just their name and contact information. Why would a small business owner do that or why should a small business owner do that?

Titles carry weight and have meaning. Sometimes business owners do not want to be discovered as such because they get treated differently or because they want the people that work for them to do their jobs without every problem getting transferred right to the owner.

Once an owner is discovered, then he or she has an impossible time trying to get problems pushed back down to lower levels where his/her people can often do the solving work.

Back to the point, this process and determination of job title should start, quite obviously, when any business is sending out a job description for hire. Indeed, the title is so very important.

Think about the different applicants you might receive with the following similar but very different titles:

 Sales Rep, Inside Sales Rep, Customer Support Rep, Order Entry, Sales Engineer, Sales Associate

 Operations Manager, Operation Support, Operations Analysist, Operations Director

 HR Manager, Payroll Clerk, HR Coordinator, HR Assistant, HR Specialist, Payroll Manager

For small businesses and small family businesses the variation between some of these titles could be insignificant. The outside world does not see it that way. Large corporations have so many levels of management that an application for and HR Manager is significantly different than Payroll Manger.

For a small business, HR Mangers could be expected to do all of the following: hiring, firing, safety, payroll, payroll taxes and even more.

For a large business, a payroll manager would probably have nothing to do with any of that stuff but would, instead, manage a payroll person or persons, manage a safety person, manage the hiring person or persons, etc.

The clearer your business title and, obviously, job description the better chance you will have of finding the right person and getting that person to do the job you intend.

Employees, often, wear their titles like a badge of honor, which can be a great thing unless the title is not what you intend for them.

Back to my story, my friend worked for about a year before the time came that his gone-to-school replacement had to be terminated. No matter how they tried to work together the conflict could not be resolved.

Obviously, this is a worst-case scenario but even issues that are less difficult will cause small business owners problems that could be avoided if carefully planned and discussed beforehand.

Human resource issues can, after all, be some of the most difficult we face. Emotions, pride and ego are not easy things to manage and/or change. Job titles are a big part of employee expectations and unmet expectations are the root of many hard conversations business owners must face.

My experience has taught me that business titles should always be reduced to the lowest possible level (think lowest common denominator) because there is always room to go up but it is nearly impossible to wiggle your way back down.

For example, if you own a small business and need a dedicated operations manager, you might have several titles to choose from as follows: VP of Operation, Director of Operations, Operations Manager, Operations Supervisor.

I would definitely recommend starting at the bottom of that list.

Consider if your business grows and now you need another, higher, level of operational leadership. If you have already named your first hire as a Director you are likely only left with a VP-type title. Most small businesses don’t really need what the world would think of as a VP or C-Level Executive in their ranks.

Of course, there are always exceptions and varying opinions but making the mistake of giving a person the wrong title or overblown title is very difficult to unwind. On the other hand, it is quite easy to advance a person’s title and/or job description.

Ultimately, job titles are a very important part of any job and influence work culture and seniority, very likely, just as much as a posted organizational chart. Your company, like every company, is significantly driven by the culture, people and organization charts—they, collectively, form the boundaries and hierarchy, even if silently, for the entire business to follow.

Those choices, which include job titles, as we have discussed, should not be taken lightly or there will likely be down-the-road conflicts that will cause you and your small business trouble.