“Titles don’t cost money.” I’ve heard that more than once from executives who were trying to justify different promotions and structures they’ve arrived at. Titles might not require a budget and indeed do not require cold hard cash to pay for. Nevertheless, I’ve seen them wreak havoc in teams in the long term. That is because they are not free. You finance them with organizational debt.

There are many incentives to bestow titles on people. Sometimes we do that to attract top talent, like making your first hires at a startup not just “plain” engineers. Other times it is done as part of (what we are hoping is) a career ladder. We feel like an employee deserves a promotion—kneel and rise as Sir Backend Architect! Perhaps the worst is the consolation title: you didn’t make it to become a manager, but hey, how about a mobile tech lead?

In The Tech Executive Operating System I describe many of these as instances of Premature Organization (BTW, the book’s out! You can grab a free sample chapter in the form below). When not done correctly, you end up creating a bunch of fiefdoms in your organization. Especially with broad titles like “backend architect” and similar, you essentially have given a single person ownership over half of your codebase. Three or four titles into this, and you’ve likely been gridlocked.

Bad titles chunk up responsibility in a way that creates a zero-sum game. After a while, there’s no room to allow others to take more ownership and advance in the organization without chipping away at someone else’s fiefdom. Even without considering future promotions, such titles sometimes rob the rest of the team of their ownership and agency. I’m not suggesting that the architects and tech leads are overly possessive or block others from taking initiatives. But I’ve seen cases where merely having these titles has mentally blocked others from taking action. They just assumed it wasn’t within their power or responsibility to do it.

Minimizing Org Debt

All of this is not to say that career ladders have no place or value. I think they are crucial for allowing ICs a clear path forward. However, your titles should very rarely hand out ownership. What’s wrong with being a staff or principal engineer?

Some leaders find these titles problematic because they don’t know how to make these concrete enough—what changes the day after someone becomes a staff engineer? The answer is not to make them solely in charge of the backend. Instead, use such promotions to rely on people having broader shoulders and getting more responsibility for initiatives, processes, and projects.

Only by breaking out of the zero-sum game structure can you build your organization properly for the long term. Ensure that you leave enough space to have future promotions, multiple architects, and elasticity to change your org’s structure. Otherwise, this is like nailing down your requirements before knowing what the product actually needs to do. Avoid the Waterfall approach to organization design. Titles are costly.