I was fortunate to be involved with one of the most successful companies ever formed in the chip industry, Maxim Integrated Products. Maxim grew to over $2 billion/year in revenue, with net margins approaching 40%. It was a cash machine.
The company had 10, count ‘em, 10, co-founders.
Of the 10 co-founders, there were 5 engineers in the group. There was Sam Ochi, Lee Evans, Dave Bingham, Roger Fuller, and Dave Fullagar.
Fullagar, the bearded fellow in the third row, was the only choice for VP Engineering/CTO. He was already a legend in the analog chip business, having designed the most popular analog IC ever, the ua741 Op Amp.
However, the others engineers were no slouches. For example, Dave Bingham, third from the left in the third row, previously was General Electric’s scientist of the year.
Maybe Bingham would be offended if he wasn’t named chief scientist or had some other exalted title. But that wasn’t what Maxim’s CEO, Jack Gifford (first row, bottom right) was going to do. I’ll get back to this in a bit.
Your team shouldn’t be in it for the titles.
Gifford didn’t give Dave, Sam, Lee, or Roger C-level or VP-level titles. Instead, he gave the titles they deserved as senior level engineers: Senior Scientist.
No one complained.
The team got to work doing the work that needed to be done. They recognized that the work, and the people they were working with, were much more important than the titles.
It’s such an important lesson. Give your team the titles they deserve.
You, as the CEO, can’t be afraid to actually manage your team. If, in your case, you have two technical co-founders, and one of them should be CTO and other one is not that senior, then give them the titles they deserve.
There is no rule that says every founder needs to be an executive of the company. If one of your founders complains because they didn’t get an executive title, then they’re likely not the right person for your company.
Titles, despite popular belief, aren’t free.
In fact, giving your team titles they don’t deserve, can hurt your company in multiple ways. Let’s say you have a team of five co-founders. You, the CEO, plus four engineers.
You assign the titles of CTO, Chief Scientist, Chief Engineer, and VP Engineering to your co-founders. You’ve satisfied their egos, and you’ve created a problem.
You start raising money, and investors start asking questions about the qualifications of your team. Your CTO, the most experienced of the group, has 10 years of experience, but the rest of the team has two years of experience.
The investors ask you why you gave the team these titles, and you don’t have a good answer. The investors your speaking with likely will lose confidence in your ability to manage your team.
The problems don’t stop there.
You’re hiring engineers to work under the team. The engineers, seeing the inflated titles your co-founders have, ask for inflated titles in order to join the company.
You have no choice, but to give the inflated titles to the new hires. Now you have title inflation that leads to paying more money for each employee because they want to be paid at the higher level their titles indicate.
Titles are the one of your first chances to show you can lead a team.
The titles you give your co-founders may seem like a small thing, but it isn’t. It’s one of the first tests of your ability to lead a team.
You can take the easy way out by giving your team the titles they want. Or, you can do the right thing, as Gifford did, by giving your team the titles they deserve. Then maybe your company will be worth $22 billion like Maxim is today.
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