The rich are getting richer. You’ve heard the statistics. The wealthiest 1% of people in the world own over half the world’s wealth.
The wealthy look for places to invest all this capital. They look for a good return. Large businesses are a prime target for these investments.
Why does that matter to us? Because many of us work for these large businesses. Even if we don’t work for them directly, our lives are profoundly impacted by large businesses. They supply our food and drink. They build our shelter. They produce our entertainment.
The wealthy are looking across the board for good investment opportunities. It doesn’t matter if they find those returns in the energy sector, or the health care sector, or the automotive sector. Returns are what they seek.
Management teams at large businesses are fully aware of this reality. Fortune 500 CEOs spend an incredible amount of time talking with institutional investors. Who are institutional investors? Banks. Retirement fund managers. Insurance companies.
These groups are investing millions or billions of dollars at a time. Large businesses are prime targets, since they’re stable and can absorb a large amount of capital.
Plus, large businesses have a single CEO. A throat to choke, if you will. When you have hundreds of millions of dollars invested in a company, you’d like to be able to reach the person in charge. You’d like the confidence that the management team knows what they’re doing, and knows what investors expect in the way of returns.
Great. Why does the relationship between management and investors matter to you? Because your career sits right in the middle of that relationship.
Take the cynical perspective. One way to prop up returns is to cut costs. What’s the largest cost for most large businesses? People. If management focuses predominantly on returns, one eye will always be on compensation costs. Your pay is at stake.
Take the optimistic perspective. Investors are another constituency your company supports. Customers are obvious. Employees too. Investors, though, can remain below the surface.
The more you know about investors, and their goals, and how your company meets their goals, the better chance you’ll be part of the conversation. You can articulate why your work matters. Or why the company should support your new idea. Or why you can bring more value in a larger role, with more responsibilities.
You have more control over your career when you understand the relationship between your business and its investors. You can see trouble ahead. You can see exciting opportunities. You can see which groups or projects align most closely with management’s vision.
Building your business acumen gives you this visibility. Building your business acumen also gets you a seat at the table. When you demonstrate you can speak intelligently about the business and its goals, you earn trust and respect.
Businesses are run by people. Even large businesses. People respond to cues about who to trust, and who to surround themselves with. You supply those cues when you speak intelligently about the business.
Understanding large companies as investments will help you take control of your career. You will know how you fit in today. You will know how you can best fit in tomorrow. You can tell your story, and make a compelling pitch to take on even more exciting roles in the future.