When I began my career in industry (as opposed to academia), I was a product management specialist. It was a modest title for a modest set of responsibilities. We had a vice president of engineering and a vice president of marketing but the top person in product management was a director. The top dog at the company was the president; he was not referred to as a CEO. We had a rule (unwritten apparently) that no more than 1% of our employees could hold the title of vice president. I don’t recall that we used titles like senior vice president or executive vice president. The president ran things; vice presidents reported to the president.
When I retired from industry (as opposed to academia), I was senior vice president of marketing. For a time, I had six vice presidents reporting to me. My company didn’t use the title chief marketing officer but I might have held that title as well if I had worked at other companies. Neither title — SVP or CMO — existed in my first company.
A number of writers and management theorists have commented on the rampant title inflation of the past 30 years or so. Most have condemned it as a sign of ego, self-importance, faddishness, or just plain silliness. One of my favorite members of the commentariat, Lucy Kellaway, just wrote a blog about the execrable use of American title terminology in the UK — as witnessed by the recent appointment of Charlotte Hogg as the first chief operating officer at the Bank of England. Kellaway seems to be offended that American terminology has infected the old world.
Certainly, we have plenty of ego in the corporate world today. But I think something deeper is going on here. Why do we have title inflation? Because it’s so much cheaper than real inflation. If we teased out the average raise that goes with an “inflated” title change, I think it would be smaller than the raise given with a “non-inflated” title change. (This would be a good dissertation topic). Getting a promotion to vice president makes you feel good. It strokes your ego. That make your compensation less likely to trigger a round of flinty salary negotiations. When you’ve just been made a member of an exclusive club, you’re less likely to wheedle about the salary. It may be cynical but it seems to work. Otherwise, it wouldn’t be so pervasive.