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Corner Office

Saying Goodbye to Titles, and Hello to Responsibility

This interview with Seth Merrin, founder and chief executive of Liquidnet, the trading network, was conducted and condensed by Adam Bryant.

Q. Tell me about some of the values of your culture.

A. One is personal responsibility. I tell this to our new people during orientation, but if you see something that we’re not doing right and you don’t say something, then it’s on you. If you think that everyone on the leadership team is taking into account everything that could possibly go wrong, you’re wrong. It’s everybody’s responsibility to help us run this company better than we can do it by ourselves.

One of our philosophies is that I would much rather have everyone assume that everything we do here is wrong and that it’s your responsibility to help us fix it. That eliminates all the ego, or it should eliminate all the ego. Since we’re trying to constantly improve ourselves, you’re helping us by giving us some suggestions about what we can do better.

Q. Some people must be a bit skeptical at first. It’s one of those policies that sounds good in theory, but how do they know you mean it?

A. Well, first of all, we don’t have any titles. And the reason is that I do not want a junior vice president to be at a meeting and not say anything because they have a senior vice president in the room, which I believe happens quite often. Having no titles is symbolic, but it really works. Just to give you one example: we had an intern, 19 years old, and there were a bunch of us in a meeting. I was giving everyone my latest and greatest idea and he took me on and he disagreed with me. It turned out he was right, and I told him he was right at the meeting. So we have to practice it at the top.

Q. And what made you decide to do away with titles?

A. We eliminated them early on because we started getting all this title creep. Someone came to me once and said we had 15 titles or something, and I said: “That’s it. We’re done. No more.” I don’t want people to aspire to get a higher title. I want people to aspire to take on more responsibility. More responsibility gets them more recognition.

Q. How did people react when you told them you were eliminating titles?

A. It was very divided. A lot of people felt that it would be very difficult to attract people if we couldn’t give them a title, because that’s what goes on their résumé. Quite frankly, that really was not my concern. We found it turned out to be a good differentiator for us, and it helps us attract the right people. If somebody wants to come here but is determined to have a managing director title, then go to a place that has a managing director title.

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Seth Merrin said that having no titles is symbolic, but it really works.Credit...Earl Wilson/The New York Times

Another thing I did from Day 1 was to set a no-suits-and-no-ties mandate. That, too, is a measure of informality. When we’re sitting around in jeans, or whatever people want to wear, that’s the kind of interaction I want. I want to have a casual interaction. I want to be able to say whatever I want to say and have them do the same.

Q. But you must have some hierarchy.

A. Everyone has managers, but the elimination of titles means that everyone has a right to state their opinion. We define levels by the responsibility you have in the company. So I am a “shape.” Most of the folks on the leadership team are shapes. We help shape the direction of the company. The people next level down are “guides.” The level below that are “drives,” and below that are “solves” and then there are “creates.” A working group came up with those levels. I just think they nailed it.

Q. What else about your culture?

A. We have something that I call a very efficient organ-rejection mechanism. If somebody comes in and just does not fit the culture, we reject them. Firing is a very big and an important part of who we are, as well. I think firing is much harder than hiring but it’s every bit as important. If you make a mistake, try to fix the mistake as quickly as you possibly can.

Q. Where did you get these specific ideas about culture? Were there experiences early in your career that affected your thinking?

A. I hated one of my bosses when I was in my early 20s. He was just nasty. There was nothing that anyone in the firm could do right. If you came up with a new idea, he would just beat it out of you.

Q. What are some things you do to spur innovation at your company?

A. We have a “skunk works.” Once every six months, we ask everyone to come up with ideas. It could be anything — a new app, a new process, whatever. And we have a committee that vets them and reduces them down to a specific few, and then we give people some time and resources to go and develop them.

Q. What advice do you give aspiring entrepreneurs?

A. First, find something you’re passionate about. Don’t do some kind of “furniture.com” business just because the furniture industry is big. Pick something you’re passionate about and define a very large problem. And if I were you, I’d define a very large problem that people know is a problem.

So take on a large problem, and see what you can do to fix it. Most people have not spent the time to figure out what is going to be their company’s value proposition. How do you win? If you don’t, it’s like going into a marriage knowing that there are problems but hoping that somehow, some way, it’s going to resolve itself. That doesn’t happen. So if you don’t spend the time to figure it out, why would you spend your money doing it, or somebody else’s?

I think that’s a common pitfall. Somebody creates a new app and puts it out there on a wing and a prayer. The true personality of an entrepreneur is not of a gambler. It’s somebody who goes for a sure thing. You have to figure there’s going to be a whole bunch of things that are going to come at you that you never expected. You’ve got to try to control as much as you possibly can control by anticipating that stuff up front. Those are the basics I leave people with.

This interview has been edited and condensed.

A version of this article appears in print on  , Section B, Page 2 of the New York edition with the headline: Saying Goodbye to Titles, and Hello to Responsibility. Order Reprints | Today’s Paper | Subscribe

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