It’s no secret that I’m not a fan of big-company HR practices. I’m more of the First Break all the Rules type. Despite my general skepticism of many standard practices, we still do annual performance reviews at my company, though I’m thinking seriously of dropping them. (See Get Rid of the Performance Review.)
Another practice I’m not hugely fond of is “leveling” which is the creation of a set of granular levels to classify jobs across the organization. Leveling typically looks like this
While I am a huge fan of compensation benchmarking (i.e., figuring out what someone is worth in the market before they do by getting another job) for employee fairness and retention, I think classical leveling has a number of problems.
- It is futile to level across functions. Yes, you might discover that a senior FPA analyst II earns the same as a product marketing director I, but why does that matter? It’s a coincidence. It’s like saying with $3.65 I can buy either a grande non-fat latte or a head of organic lettuce. What matters is the fair price for each of those goods in the market, not they that happen to have the same price. So I object to the whole notion of levels across the organization. It’s not canonical; it’s a coincidence.
- Most leveling systems are too granular, with the levels separated by arbitrary characterizations. It’s makework. It’s fake science. It’s bureaucratic and encourages a non-thinking “climb the ladder” approach to career development. (“Hey, let’s develop you to go from somewhat independent to rather independent this year.”)
- It conflates career development and salary negotiation. It encourages a mindset of saying “what do I need to do make L10” when you want to say “I want a $10K raise.” I can’t tell you the number of times I’ve had people ask for “development” or “leveling” conversations where I get excited and start talking about learning, skills gaps, and such and it’s clear all they wanted to talk about was salary. #disappointing
That said, I do believe there are three meaningful levels in management and it’s important to understand the differences among them. I can’t tell you the number of times someone has sincerely asked me “what does it take to be a director” or “how can I develop myself into a VP.”
It’s a hard question. You can turn to the leveling system for an answer, but it’s not in there. For years, in fact, I’ve struggled to deliver what I consider to be a good answer to the question.
I’m not talking about senior VP vs. executive VP or director vs. senior director. I view such adjectives as window dressing or stripes: important recognition along the way, but nothing that fundamentally changes one’s level.
I’m not talking about how many people you manage. In call centers, a director might manage 500 people. In startups, a VP might manage 0.
I’m talking about one of three levels at which people operate: manager, director, and vice president. Here are my definitions:
- Managers are paid to drive results with some support. They have experience in the function, can take responsibility, but are still learning the job and will have questions and need support. They can execute the tactical plan for a project but typically can’t make it.
- Directors are paid to drive results with little or no supervision (“set and forget”). Directors know how to do the job. They can make a project’s tactical plan in their sleep. They can work across the organization to get it done. I love strong directors. They get shit done.
- VPs are paid to make the plan. Say you run marketing. Your job is to understand the company’s business situation, make a plan to address it, build consensus and get approval of that plan, then go execute it.
The biggest single development issue I’ve seen over the years is that many VPs still think like directors. 
Say the plan didn’t work. “But, we executed the plan we agreed to,” they might say, hoping to play a get-out-of-jail-free card with the CEO (which is about to boomerang on them).
Of course, the VP got approval to execute the plan. Otherwise, you’d be having a different conversation, one about termination for insubordination.
But the plan didn’t work. Because directors are primarily execution engines, they can successfully play this card. Fair enough. Good directors challenge their plans to make them better. But they can still play the approval card successfully because their primary duty is to execute the plan, not make it.
VP’s, however, cannot play the approval card. The VP’s job is to get the right answer. They are the functional expert. No one on the team knows their function better than they do. And even if someone did, he or she is still playing the VP of function role and it’s their job – and no one else’s — to get the right answer.
Now, you might be thinking “glad I don’t work for Dave” right now — he’s putting failure for a plan he and the team agreed to on the back of the VP. And I am.
But it’s the same standard to which the CEO is held. If the CEO makes a plan, gets it approved by the board, and executes it well, but it doesn’t work, he/she cannot tell the board “but, but, it’s the plan we agreed to.” Most CEOs wouldn’t even dream of saying that. It’s because CEOs understand they are held accountable not for effort or activity, but results.
Part of truly operating at the VP level is to internalize this fact. You are accountable for results. Make a plan that you believe in. Because if the plan doesn’t work, you can’t hide behind approval. Your job was to make a plan that worked. If the risk of dying on a hill is inevitable, you may as well die on your own hill, and not someone else’s.
Paraphrasing the ancient Fram oil filter commercial, I call this “you can fire me now, or fire me later” principle. That is, an executive should never make or sign up for a plan they don’t believe in. They should risk being fired now for refusing to sign up for the plan (e.g., challenging assumptions, delivering bad news) as opposed to halfheartedly executing a plan they don’t believe in, and almost certainly getting fired later for poor execution. The former is a far better way to go than the latter.
This is important not only because it prepares the VP to be CEO one day, but also because it empowers the VP in making his/her plan. If this my plan, if I am to be judged on its success or failure, if I am not able to use approval as a get-out-of-jail-free card, then is it the right plan?
That’s the thinking I want to stimulate. That’s how great VP’s think.
# # #
 Since big companies throw around the VP title pretty casually, this post is arguing that many of those VPs are actually directors in thinking and accountability. This may be one reason why big company VPs have trouble adapting to the e-staff of startups.