Playing To Win
Organizational Strategy & Job Titles
When More IS Better
I recently had a fascinating conversation with a client about job titles. The question was how to select the optimal title that would help people both inside and outside his company know what he did? I had thought and written before about a related subject — but not exactly this one. So, I have decided to write about it as my 31st Year II Playing to Win/Practitioner Insights (PTW/PI) piece, which is called Organizational Strategy & Job Titles: When More IS Better. You can find the previous 83 PTW/PI here.
The client is a very senior executive in a big and pretty complex organization, with multiple distinct and varied parts. He has multiple jobs, some of which are easier to fit into a classic titling structure, while others are not. In the former category are titles such as Chair of this subsidiary or CEO of that unit. But other important tasks on his plate don’t fit so well. Typically, these are of the form of moving something from zero to one — e.g., fixing something that is broken; getting something done that isn’t getting done; creating something that doesn’t now exist.
Our conversation was not about having a title that would be seen as sufficiently senior — that was not in question. The desire was for a title that generated enough clarity both inside and outside the organization to lower the transactions costs associated with fulfilling the strategic objectives of his organization.
The Fundamental Mismatch
Upon reflection, I realized that this question relates to something I have written about before, both in Harvard Business Review nearly a decade ago and more recently in my new book, A New Way to Think (Chapter Seven), about the mismatch between the nature of modern work and the organization of it. I just hadn’t thought before about the implication for job titles.
To provide a quick summary of the earlier writing, there has been fundamental change in the nature of work in business over the past 75 years without a commensurate shift in its organization. In the earlier era, the bulk of employment in business was in factories whether manufacturing factories — as with an automotive company — or service factories — as with a bank. Sitting on top of the factories in that earlier era was a typically small managerial infrastructure comprised of what Peter Drucker termed knowledge workers.
The dominant way to organize work in this new and growing managerial infrastructure was reflexively modeled on the organization of the factories, which featured flat jobs. That is, these factory jobs were pretty much the same every day, every week, every month, as with an assembly line worker or customer service representative. The same convention was applied in the office towers full of knowledge workers. They were structured as flat jobs where the implicit assumption was that the work was constant, whether VP marketing, SVP Research & Development, or Treasurer.
Fast forward to the modern company. With dramatically increased scale, companies have added lots of marketing people, research and development organizations, finance structures and human resources departments. The office towers have gotten so large that in most big companies the wage bill in the office towers is much greater than in the factories — even for hard-core manufacturers.
It begs the question: what do these office-tower people do? They don’t manufacture products or deliver services to customers. Instead, they manufacture decisions. Decisions are their outputs — what to research, how to sell, how much to spend on marketing, who to partner with, to where to expand. The managerial infrastructure can be best thought of as a big and expensive decision factory.
But these decisions don’t happen with consistency every day. These jobs are completely unlike the flat jobs in the traditional factories. The key organizing variable is the project — financing a new plant, developing a new product, fixing the relationship with a major customer, etc. In reality, the decision factory is a project-based organization. Projects arrive, ramp up, are handled, and disappear, often never to be seen again.
Because inherently project-based jobs are defined as if they are flat, they are highly inefficient. Projects come and go, with demand hitting peaks when multiple projects crest at the same time. Decision factory staffing tends to expand to the level at the peak load, which produces lots of slack for non-peak-load times. But the slack is hidden in little pieces dotted around the decision factory — 5% of this person, 12% of that one, and so on.
So, when a big project comes along, companies feel the need to hire outside consultants to do the work because it is not easy to figure out how to staff it internally using those hidden pieces. Because the decision factory is organized around flat jobs, it is hard to get proper focus on projects. Hence, business has seen the rapid rise of the Project Management Office (PMO), a classic workaround/kludge instead of a fundamental solution. Ironically, even though projects comprise the main actual work of decision factories, they need special attention to get done because organization around flat jobs inhibits getting projects done.
The prescription is simple: organize the decision factory around projects and the need for PMOs will be entirely wiped out, the need to hire consultants for projects that could be done internally will be dramatically decreased, and knowledge worker productivity will be substantially increased. In a project-based decision factory, its members have a job level designation appropriate for their seniority, plus titles denoting their role on the projects that they are currently in charge of or working on.
Many people assume that this kind of organizing principle is only possible in tiny organizations — such as a small design studio or ad agency. But that is simply not the case. Accenture, with $50 billion in revenues and 700,000 employees, is organized primarily around projects, as is Deloitte with $50 billion and 350,000 employees and McKinsey with $10 billion and 30,000 employees. It is the same with movie studios. They organize around movie projects and when one is done, the team disbands and regroups around the next set of movie projects.
Of course, few large companies currently organize around projects. But in general, the ones that do it are growing quickly, and I believe that is because their organizational strategy enables their structure to follow the work rather than forces the work to follow a mismatched and ineffective structure.
Structure & Titles
Before the aforementioned conversation, I hadn’t thought about the implications for titles of the normal versus project structure. But of course, titles follow structure.
In the factories, titles are consistent with your flat job — e.g., a CSR in the 30th Street branch or the front-end operator on the diaper line in the Wisconsin plant. In the decision factory, your title denotes your level and the permanent entity for which you are responsible. For the former, it is CEO, EVP, SVP, VO, Director, etc., and for the latter it is HR, Finance, North America, Europe, the Widget business, Sustainability, etc.
This convention is not crazy. Even in companies organized by projects, employees also have a primary title denoting level — e.g., Senior Partner, Partner, Principal, Engagement Manager, etc. But the second (and sometimes third/fourth) tend to be more transitory. For example, a McKinsey consultant might be an Engagement Manager playing that role on the logistics project for client x. And a Partner might be the lead on client x until the work with client x ends. Other secondary/tertiary titles may be for longer assignments, such as Managing Director of the Chicago office or Leader of the People and Organizational Performance Practice. While each of those roles has in part a flat aspect to it, many are in fact the manifestation of a project — e.g., fix the problems with the Chicago office culture or get us on the map in Organizational Performance consulting. I like that especially for senior people in these organizations, they often don’t have one title but a number that are consistent with their projects — like Senior Partner, Managing Partner of the Singapore Office, AP Leader for Consumer Projects, and AP Leader for Sustainability.
But better still are titles that clearly specify the project(s) in which the decision factory worker is engaged. Rather than President of the Truck Transmissions business unit, I would prefer to see President and Head of the Turnaround Project for Truck Transmissions. That would clearly indicate why the company would (for example) dedicate extra temporary resources to accomplishing the turnaround, and it might avoid feeling that it must hire consultants to run the turnaround effort. And rather than just President of the ERP Software business, I would rather have it be President and Head of the Growth Project for the business, again with the timebound resources appropriate for the project, not for the steady state.
Very senior executives can have a portfolio of project titles that help internal colleagues and external partners understand the centrality of the projects and their roles in them. I think that even CEOs should embrace multiple project-based titles. For example, a CEO could be CEO and Head of the project to create The Organization of the Future or Head of the project to create a strategy for Diversity, Equity and Inclusion. All good CEOs have projects that they lead alongside the common features of the CEO job. But often their organizations are confused as to why they are playing more intense roles on certain activities: Is our CEO meddling/micromanaging? No, that is a mission-critical project for the company. But the confusion results from the omnibus flat title of CEOs failure to accurately describe what they are really working on.
The shift to an organizational strategy of structuring around projects is inevitable. The current way to organize knowledge workers/decision factories is just plain anachronistic and silly. However, as with most norms of ‘how business is done’, the shift will take a long time. And that is an awesome thing for Accenture, Deloitte, McKinsey, etc. Demand for their project-based resources will remain strong for the foreseeable future. Decision factory productivity growth will continue to be anemic and redundant PMOs will keep popping up everywhere.
Despite the inevitable resistence, this transformation is a good one to lean into. I predict that being a laggard on this front will be dangerous.
At the top of organizations, CEOs should think about being more explicit about supplementing traditional titles with project titles for their decision factory staff to ease the path toward a more project-centric organization. But even if you aren’t a CEO and regardless of your level in your organization, make your projects more explicit. Don’t be afraid to make up temporary informal project titles for you and your team members to bring focus and clarity to the projects that are critical to your part of the organization.
On this front, be part of the future, not part of the past.