Titles matter when they give you a seat at the big people's table
A title acts as a credibility and conversation gate for enterprise communication and decision-making. Senior management expects to participate in meetings and make decisions with people at their level or, one below. Meaningful two-way skip-level communication is often rare. Feedback and input are filtered by the title and role of the person making the request relative to the person receiving the request. This applies across organizations as well. "The business" often engages their counterparts at the same level effectively cutting off senior contributors.
The Impact of Title on Impact
I'm talking about the title itself, not the job level which drives pay and rating bands. The "Director" level is the first real breakpoint for this. Inter-org networking happens at a job title level where people attend the same events or training. Companies often create decision-making groups, hold off-sites, and do major planning at the Director level, title, and above. This is especially impactful when a senior person is hired into a new organization below the Director level. A title brings its own intrinsic credibility. They find themselves in a new organization with no network and, little visibility or initial credibility. New Directors on the other hand are listened to with rapt attention.
Capability
Credibility
Connectivity
Compensation
I've worked in organizations with a night and day difference in visibility, influence, and pay structure between the top technical or managerial position and the bottom-level Director title. This is especially true when working across departments and function types.
Impact of Hierarchical Symmetry
Titles in Hiring
We all want to believe that the new company we will work for is a meritocracy where smart opinions rise above rank. We're told that the new title is immaterial and that a lower title is an advantage because it makes it easier for you to rate up. You especially hear this in bell curve-fitting Jack Welch-style organizations. This is one possible self-protection/self-promotion strategy. Note that you can be blocked for raises if you get hired at the top of a pay band rather than at the bottom of the previous one.
Titles for Status
I'm not talking about made-up titles or titles given to people in places of raises or titles created for LinkedIn.
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