The designation straitjacket—why businesses pivot but people don't

What's in a title? Apparently a lot, if you go by the importance organizations place on them and the value job candidates give them. It's not uncommon to hear of people evaluating offers with similar job descriptions and picking the one with the fancier job title, even when it means lower pay.

But should job titles matter so much? The unspoken consensus seems to be that they do. In this blog, then, we'll dig a bit deeper into the other side of the argument.

Designation as a constraint

On the surface, job titles seem to give people a sense of clarity about their role. They also instill a sense of career progression. It's human nature to categorize not just things, but people as well. But not many think about what's lost in the process, when thinking in terms of these highly specific labels. It narrows one's sense of possibility and confines the employee to a limited track in terms of thought and growth.

When a naturally proactive employee is given a highly specific title, it may restrict them from driving change and undertaking initiatives in spaces that don't fall 100% within the circuit defined by their title. Their proactiveness may also be met by hesitation and resentment from other employees, who might feel that the employee in question should "stick to their lane." People's abilities come in all shapes and sizes. It's meaningless to imagine that all of them will fit into exact moulds.

When job titles get extra specific, the direction of movement also tends to be limited. This could result in a rat race, where people are pushing each other to get ahead. A more satisfying and creatively fulfilling path would involve moves in many different directions. Without freedom of movement and a sense of possibility, people stay in unhappy or unmotivating environments to stay within its prescribed trajectory.

The sunk cost fallacy at play—at work

The sunk cost fallacy is a psychological bias that helps to explain the above phenomena. It's a pattern of thinking where people continue to pour time, money, or effort into something primarily because of all the prior investments they've made in that area. They feel attached to the progress they've made. This causes people to carry on in an unhappy situation or continue something despite an alternative being clearly more beneficial.

The saying "good is the enemy of great" sums up the latter scenario. As you can imagine, the sunk-cost fallacy is highly common in careers. Despite people disliking their job or finding something else more attractive or aligned with their strengths, they continue to stick to their current trajectory, since they feel that they have already invested a lot into it.

Of course, organizations play a role in incentivizing this mindset and sacrificing the happiness of their employees for the sake of an imagined sense of order. Again, it's human nature at play—in addition to our love for labelling things and people, we also like people to stick with the labels we've given them.

But, at an organizational scale, this predictability makes it feel easier to manage people as resources. It's ironic that organizations often undertake so many strategic pivots to get things right and achieve greatness, but when it comes to their people, they put them in straitjackets.

The rise of generalists

There is an increase in demand for generalist skill sets today. For a few decades now, we've witnessed a hard turn towards specialization. But businesses are starting to realize that generalists have a fantastic way of bringing together teams and functions with their broader experience—and they're better at orchestrating projects that require knowledge of multiple domains. Books like David Epstein's Range: Why Generalists Triumph in a Specialized World are a signal of this shift in the zeitgeist.

An open-ended job title increases the likelihood of one being exposed to many more learning paths, and having the freedom to pick up threads and pursue them to their ends. Ironically, the lack of specificity increases one's freedom to specialize, but in something they choose for themselves, rather than something chosen for them. Not surprisingly, the generalist outlook also makes people more ready when they occupy leadership roles. Moreover, a culture of open job titles is more conducive when it comes to nurturing those darlings of organizations—the intrapreneurs.

All's fair in love and the war for talent?

So far, we've dealt with designations born out of a desire for order and logic. But today, we're witnessing the weaponization of the job designation in the war for talent. Organizations today are inventing designations to appeal to potential candidates and making increasingly fancy titles as a result. This is a problem.

Companies started doing this to stand out among their competitors, but the rise of professional networking sites might have exacerbated it altogether. After all, it costs nothing to coin a new designation. But this tactic can have undesirable outcomes. This includes unclear expectations, a false sense of importance, and a lack of clarity about what the person in the role is supposed to do.

If you need a certain designation to be taken seriously within your organizations, then the question is: Is that not a symptom of a larger problem in your organization's culture? If you need a designation as a marker for internal credibility for employees to take each other seriously, that's an indicator that there is a lack of movement of ideas and communication within the organization.

The meaning of it all

Finding meaning in work is a bigger deal for people today than it ever was. Newer generations are moving their sights further and further up Maslow's pyramid and looking for their jobs to shoulder some of the burden of self-actualization.

Young millennials and Gen Z professionals might "join the rat race," but they will do so on their terms. They're increasingly realizing that many things about the modern workplace are the results of social constructs—and that many of them are outdated. When these demographic and cultural shifts are unfolding in the talent landscape, it might be the wise move for organizations to create a conducive environment for learning and growth that doesn't conform to predetermined patterns set in stone. And that might mean reimagining job titles once and for all.