Andreessen vs Zuckerberg: How Big Should the Titles Be?
Should your company Vice President the top title or should you have Chief Marketing Officers, Chief Revenue Officers, Chief People Officers, and Chief Snack Officers? There are two schools of thoughts regarding this, one represented by Marc Andreessen and the other by Mark Zuckerberg.
Andreessen argues that people ask for many things from a company: salary, bonus, stock options, span of control, and titles. Of those, title is by far the cheapest, so it makes sense to give the highest titles possible. The hierarchy should have. Presidents, Chiefs, and Senior Executive Vice Presidents. If it makes people feel better, let them feel better. Titles cost nothing. Better yet, when competing for new employees with other companies, using Andreessen's method you can always outbid the competition in at least one dimension.
At Facebook, by contrast, Mark Zuckerberg purposely deploys titles that are significantly lower than the industry standard. Senior Vice Presidents at other companies must take title haircuts down to Directors or Managers at Facebook. Why does he do this? First, he guarantees that every new employee gets releveled as they enter his company. in this way, he avoids accidentally giving new employees higher titles and positions than better-performing existing employees. This boost morale and increases fairness. Second, it forces all the managers of Facebook to understand and internalize Facebook's leveling system, which serves the company extremely well in their own promotion and compensation processes.
He also wants titles to be meaningful and reflect who has influence in the organization. As a company grows quickly, it's important to provide organizational clarity wherever possible and that gets more difficult if there are fifty VPs and ten Chiefs.
Next, he finds that businesspeople often carry inflated titles versus their engineering counterparts. While he recognizes that big titles help them out externally with getting meetings, he still wants to have an organization where the product people and engineers form the cultural core, so he strives to keep this in check as well.
Does Facebook ever miss out on a new hire due to its low titles? Yes, definitely. But one might argue that they miss out on precisely the employees they don't want. In fact, both the hiring and onboarding processes at Facebook have been carefully designed to encourage the right kind of employees to select themselves in and the wrong ones to select themselves out.
Simulacra level 3 is about accurately describing social reality. Level 4 is about defecting on people trying to do level 3, by painting an inaccurate model of social reality. It seems to me this is a crystal clear example of two people recommending Level 3 vs Level 4 strategies.
(Or so it is in my mind. I'm sure Zvi and Benquo and others will say Level 4 is something else.)
As an aside, this book is far better than it has any right to be at giving advice on building successful companies. It's a book that repeatedly stares into the dark at the things that will kill your company (e.g. how to fire senior people, how to minimize internal politicking, when smart people are bad employees, etc) and gives simple and clear advice in each situation. I've personally found it immensely helpful.
I was not commenting on goodness or badness, just simulacraness.
Are you saying that assigning titles according to a system that you think is how titles should work makes the title a more accurate truthful signal about actual social reality than assigning titles according to the way titles are generally assigned industry wide?
It seems to me that this is not the case, because assigning titles that are inaccurate (according to industry standards) in either direction causes confusion. In the case of title deflation, the excerpt above suggests that it makes it harder for people with lower titles than their actual responsibility to interface with those outside the company, get meetings, etc. The inaccurate signal imposes a cost.
A passage I just read in The Hard Thing About Hard Things by Ben Horowitz:
Simulacra level 3 is about accurately describing social reality. Level 4 is about defecting on people trying to do level 3, by painting an inaccurate model of social reality. It seems to me this is a crystal clear example of two people recommending Level 3 vs Level 4 strategies.
(Or so it is in my mind. I'm sure Zvi and Benquo and others will say Level 4 is something else.)
As an aside, this book is far better than it has any right to be at giving advice on building successful companies. It's a book that repeatedly stares into the dark at the things that will kill your company (e.g. how to fire senior people, how to minimize internal politicking, when smart people are bad employees, etc) and gives simple and clear advice in each situation. I've personally found it immensely helpful.