What’s In A Name?

People change, organizations change, needs change, and as a result, roles often change. When that happens, when it’s time to move a good performer out of a role but hold onto them for something else, think about what you’re going to call them. It matters.

A recent article explored “the Chrysalis effect” in startups. This is the period when a small startup makes a move to grow into something bigger. The point of the article was that the leader who is right for getting a company started may not be right for leading the company in it’s next, larger phase. Organizations go through life cycles just like people do, and the skills necessary for good leadership are different in different phases. Somebody who can lead 50 people in a San Francisco loft through 18-hour workdays may not have the right skills for leading 2,000 people in multiple markets around the globe.

In itself, this is not news. It’s also not true just for startups. Established companies go through changes too, and someone who could lead a telecom effectively when the bulk of its revenue comes from landlines might not be the person who should lead when the company becomes a content creator for its new cable TV system and social media channels. When smart companies hire new leaders, one of the early discussions with that leader concerns the conditions under which they might move out of the role, and what options exist for them when that happens.

While it is important to move people out of roles when the time comes, it’s also important not to lose the knowledge and skills they have that can still bring value. In many cases, especially at successful startups transitioning into something bigger, the founder should stay on even if they are no longer in a CEO role. Where we seem to have trouble is in figuring out what to call them.

Like it or not, titles matter. Though some firms have tried going to a “title-less” environment, titles send a message. They provide a way to instantly understand something about what a person does (even titles like “Drupal Ninja” and “New Media Evangelist” accomplish that, in their own way). They can show progression. For those people for whom their work is the key element in their lives — and that probably includes most founders, otherwise they wouldn’t be founders — there is a lot of their identity tied up in their title. When someone moves out of a role not because they performed poorly, but because they simply aren’t right for the next phase of the organization, it helps if the title change does not suggest they did something wrong.

So, what to do? Let’s consider a company’s founder and CEO who got things going, but who needs to step aside as the firm grows. Everyone may agree on the role they will continue to play in the company’s future, but you also need to give them something to put on their business card. People in this situation may still be referred to as “Founder” — there’s a lot of pride in that term — but they are likely to want to be called “Founder and…” and it’s the “…” that may give you trouble.

First, think about why you want to keep them. Is it for their innovative mindset? Is it for the mentorship they can provide other leaders? Is it for their ability to communicate with investors and potential clients? Their title should reflect the value they bring.

Try not to call them a “Chief X Officer,” when X used to equal “Executive” and now is something else. Every “officer” except the CEO is at least a level below the CEO, so the new title automatically suggests a demotion, rather than simply a move out of the chain of command and into something new. It’s important not to suggest people were demoted, because that implies poor performance, and no one will be happy putting that on their LinkedIn profile. Just drop the term “Officer” entirely.

When someone goes from being “Founder and CEO” to “Founder and Lead Innovator” or “Founder and Senior Mentor” or something like that, most people will understand what that means: this is someone who is willing to step aside for the good of the company, and someone who has a lot of value still to offer. That helps with external face-saving as well as reminding the individual that what they do still matters.

Transitioning good people out of a role is one of the hardest things to do. It’s easy when someone performs poorly, because even they are likely to know what’s coming, so in the big scheme of things, that termination discussion is simple. When someone is good, though, and still has something to offer but in a different way, you need to handle that a little more delicately. Whether you have had that discussion at the start of their tenure, or it’s a big surprise when it happens, the transition will be a lot smoother when you can agree on the title that sends the right message.