…By any other name

Real Estate Weekly, May 2, 2001 by Parke Chapman

Inflated titles hide where power lies

If you've ever been bewildered by corporate titles, blame inflation -- title inflation.

Some suspect that a tight labor market has obliged firms to beef up employees' titles in efforts to retain them. Yet boosting employee morale may be distorting the big picture.

"It makes it very confusing for the clients to figure out whose in charge," said Lawrence Fiedler, a professor at New York University's Real Estate Institute. Fiedler specified that these titles are usually backed up by salary increases, however.

"But a lot of this is just ego stroking, giving some one a new business card," said Fiedler.

And "director" appears to be the pick of the litter.

"I'm seeing a mess of directors out there," said Jo seph Genovesi, president of D.G Hart Associates, a real estate services firm.

Case in point -- a majority of the real estate sector cards chosen at random from two Rolodexes shared the title "director," From "senior managing director" to "senior executive managing director" to "director," determining who is above whom can be very dicey.

Knowledge of the firm does aid interpretation. When corporate mergers and parent companies are considered, the results are microcosm titles--divisions within divisions within firms that function within firms. And in a business as family-based as New York's real estate industry, some last names are titles in and of themselves.

"Now titles are given out more freely. There really is no uniformity in how it is done," said Genovesi, whose title is president. He said that at smaller firms such as D.G. Hart there is less emphasis on titles.

Uniformity on a subjective level, perhaps, as each firm can design their own organizational chart. That doesn't mean that titles are not created or simply tweaked for certain people. The simplicity of a firm where the CEO or president title is held by one person may be a thing of the past. Now, these titles can be held by numerous people.

"Titles have a very different meaning today. Now it seems like everyone is a director," said Marilyn Miller, the founder of Marketing Through Graphics, a corporate imaging firm.

"It's confusing to figure out where people stand in a firm. They aren't providing organizational charts. And you really can't ask them--a lot of these firms conduct sensitivity training now," said Miller, suggesting that political correctness as one culprit. Miller noted that in her experience years ago the top position was chief executive or chief financial officer.

Needless to say, several firms were reluctant to discuss title inflation. Beyond simply stroking the egos of their staff, inflated titles do serve a corporate purpose -- albeit a blurred one -- of impressing clients. There's solace in that, from a client's standpoint -- dealing with someone whose title assumes dominance in the firm. Whether that is the case may not matter.

"The real Gods are the dealmakers. Their titles don't matter as long as they are making money for the firm," said Faith Hope Consolo, vice chairman of Garrick-Aug Worldwide, the store leasing firm.

In Consolo's opinion, it is much more difficult to comprehend the pecking order at larger firms.

"I think most people do their work without caring about their title or the titles of their clients," said Richard Selig, a principal in the Hunter Organization. According to Selig, who has worked in real estate for twenty-three years, there are two other principals in the firm.

"Firms feel that they need to give people impressive titles. Still, there are some firms that have resisted the tendency," said Professor Michael Van Biema, a professor at Columbia Business School.

Perhaps Lawrence Fielder summed up the practice of title inflation best.

"In Russia there used to be a saying. 'I give you make believe rubles, you give me make-believe work."'