‘Be Yourself Throughout’: Marriott CFO Leeny Oberg On Leading In A Storm

Marriott's finance chief on Covid, leading teams, guiding strategy and her powerful partnership with CEO Arne Sorenson. 'There needs to be a sense of belief in what you can create.'

Leeny Oberg, CFO, Marriott

CEOs are increasingly looking for finance chiefs willing—and able—to step up and be strategic partners, helping to guide the company towards sustainable success. There’s no better example than at Marriott International, where CFO Leeny Oberg’s partnership with CEO Arne Sorenson built the company into one of the world’s largest and most successful global organizations—and helped it survive the Covid crisis.

At our inaugural Strategic Finance Summit last week, we talked at length with Oberg about her unique partnership with Sorenson, who passed away in February, as well as the evolving role of the chief financial officer in modern global business, and her own work leading at Marriott. Here are excerpts, edited for length and clarity:

StrategicCFO360: To say that this has been a difficult year for Marriott International would be a vast understatement. When you’re in the hotel business, a global pandemic is not a boon for business. Couple that with Arne’s illness and then Arne’s passing, I think it was Bill Marriott who said that it was the worst year in the company’s history. Talk about what it’s been like leading through this time, what’s it taught you about how you work as a CFO and how you need to work as a CFO?

Oberg: For anybody who’s ever done the classic academic study of finance, and you talk about event risk, we used to think about event risk as being a huge recession, like the Great Recession, where things go down by 25%. But now we have a whole new definition of event risk, which is when your business drops by 90%, literally overnight.

I would say, first of all, it’s most important to be yourself throughout. As a leader, it’s really important to establish what kind of leadership style you have relative to what kind of person you are, what kind of personality you have.

Making sure to stay connected with everybody and have a sense of what’s on their minds, what’s going on, concerns in both the business and, frankly, in their personal lives, was only more important in the pandemic.

Being accessible becomes incredibly important. People need to feel in a crisis like they can get a hold of who they need to.

The only other thing that jumps to mind in this kind of crisis is decisiveness. We all know that we’re used to having organizations that feed you analysis and data and changing environments, etc. But I do think in a situation like this, that we have with the pandemic, it became really clear that you have to be willing to make decisions without perfect information, and you must make them quickly.

That probably is a muscle that for many big companies, it doesn’t always get used as perhaps as much as it should. It was a good reminder for all of us here at Marriott that we’ve got to be really good at that.

How has this tangibly changed the way you’re doing your work day-to-day right now?

One is meetings. I know all of you, these Zoom meetings and all of them, they can get really old and everybody gets tired of them. They can be exhausting. But I will also say, having meetings that are broader and deeper in our organization was helpful in my case. It really allowed me to stay a bit more in touch and make the team feel like we were all together.

Maybe you didn’t need 25 people on the call to make a couple decisions, but just by having everybody on the call, there was a chance to have a comment at the beginning or in the middle or the end so that they know that we’re all in this together, we’re all rowing this boat, we’re all doing this together. Because otherwise, I think there’s a tendency to feel, like, “Well, I’m here in my little room, wherever I am, feeling very alone.”

It was just, kind of, an understanding on everybody’s part that we were going to have to be more accessible to each other than we, frankly, typically would ever ask of each other.

Then you’ve got to be willing to pull back and say, “Okay, everybody’s got to go have a little break here, nobody on email for three days over the weekend.” But I do think that kind of, clear involvement with the team, both broadly and deeply, helped to try to keep us tied together.

What are you going to keep from this time? What did you like that you learned that you’re going to keep using?

We will continue to do more around having people be exposed to more variety of work. I think that one of the things that was fantastic about the pandemic is people found it exciting. They were being asked to work on different things.

Frankly, we had an army of people collecting receivables. Before it had been maybe a super small group. Well, believe it or not, that exposes them to a set of business relationships and skills that they’d never done before, good dialogue about new ideas, best practices. So, for me, it’s definitely about nimbleness and exposure for people to a broader set of responsibilities.

A lot of what’s gone on over the last few years is about more financial automation, more technology in the finance function. What did you learn about how that worked over the last year?

Those sorts of technological advances that allow you to do repetitive things much more efficiently, there’s no doubt that that is very helpful when you’re in a business like ours, where it’s, frankly, in many respects, millions and millions of calculations being done every month.

If there’s anything I’ve learned in this pandemic at the end of the day, it is all about people. We can have all these great systems to kingdom come and they are great, and they can do a bunch of, kind of, repetitive work extremely well. But when you need to make change quickly and you need to be able to do things differently, it is really entirely all about the people.

Let’s take a big step back and just talk about the role of the CFO and how that’s changing. You’ve got some very definitive thoughts on why the CFO is so important within the organization strategically.

I view myself as really being a critical partner to executing the CEO’s strategy. I really wanted, more than anything, to make sure that I contributed to Arne as he thought of the strategy, but then my job is to make sure that that happens successfully.

When I think of it in terms of the partnership with the CEO, it was very much from an enabling standpoint, that I want to make sure that I do everything I can to help him or her see the pitfalls, the good things, the bad things, the possible outcomes, look at it from all sides of the equation and then go crazy to execute it successfully.

So, that was a base. From there, I was very fortunate in that Arne was originally a lawyer before he was asked to be CFO. He had never had a drop of accounting before he was asked to take the job.

So, he’s always approached the CFO role with a really strategic sense, but with a good economic bent. And that is certainly back from my days of taking finance classes, way back when, that’s always for me what’s been the best part of being a CFO, is the marriage of the strategy and the strategy execution with the economic value that you’re trying to create.

So when I think about where I can add the most value, it is really about helping to analyze, evaluate, and structure strategies such that you are getting the economic value that you want for the enterprise, also, again, trying to accomplish what you’re trying to accomplish for, in our case, the customers or the hotel owners and the associates. But with this underpinning of, it’s got to have an economic value equation that hunts, that sources and uses of capital in the market, will say, “Yes, I get that. I think that’s valuable and I understand why.” To me, that intersection of the two, I find it delicious. It’s great.

Talk a little bit about your experience of being the person that sees outside the company but also sees inside the company and has to interpret that back and forth. Maybe you can give us some tips?

Absolutely. So, first of all, I’ll go back, make you go back a little bit in time in my career, which is when I left Wall Street, I moved to work for a company. About two years into it, I went into investor relations. I realized that, “Wow, this is a really cool place to sit, where you are getting the outside world, looking at all industries, all companies, and evaluating them from both a strategy and an economic return standpoint and pricing that.”

Then I’m also, at the same time, sitting on the inside, where we’re looking at our strategies, what we’re doing, and our operations. I realized that it was really interesting. I found, over time, that if you could be a really good communicator and educator about how the outside views things and also how the inside views things, that there’s an opportunity to create a unique chance to make the most of both.

As I became a CFO, that communicating role, both internally and externally, takes on greater value. So, my suggestions there are a couple of things that we’ve done here at Marriott, is to take our show on the road, if you will, about the creation of shareholder value, to make sure that our general managers around the world, who we hope, over time, will consider investing in Marriott stock, that they understand why some of the things that we talk about why they matter, why they matter from an economic standpoint, why the amount of investment matters, and who cares, and how they’re looking at Marriott as compared to looking at some other company and some other industry.

These lessons are perfectly applicable within a private company as well. Maybe you could talk a little bit about that?

I worked for a very short time before I joined a public company in a leveraged buyout firm that had LPs, they were all private companies. They’re all the same issues. They’re all exactly the same in terms of being able to communicate effectively, understanding the bigger picture, and then thinking about the strategies and why they’re going to create value, and then measuring, are they doing their job and what’s changing to mean that you’ve got to change your strategy?

While, of course, there’s some different requirements associated with the public company side, I think the fundamentals of the analysis and the communication value is exactly the same.

We’ve talked about communicating externally, what about communicating internally? Talk a little bit about helping everybody get with the strategy of the business and understanding where they fit into it.

I do have to say no really nicely. There is no doubt that, like every leader, there are the really fun parts and there are the parts that are more challenging. Sometimes being known as Ms. No is not always the fun part. But, again, it gets back to really being able to explain why, explain the strategy, explain the choices. A company can’t have 30 priorities and throw capital at all 30 of them with the same amount of effort. It’s not possible.

There have to be better defined priorities about where you think you’re going to get the most value. So, for example, you take on 30 projects, you do them all okay, wouldn’t you be better perhaps doing 10 projects and doing them really, really well, and maybe not spending quite as much capital but getting more bang for your buck?

Those are the kinds of discussions at the senior table that the CFO can be quite useful in—really helping evaluate where are we going to get the most value and advantage with our various constituencies, including the supply and demand for capital?

You did not come up the CPA route. How do you think that affected the way you view the job that you do?

There’s no doubt that did have an impact on how I do my job. Don’t get me wrong, I really like accounting, I’ve always enjoyed it. It’s a huge part of my job. It’s critically important, you’ve got to make sure that we’ve got solid ways and all the great processes and controls and financial statements that properly reflect how our business is doing and I actually really enjoy it.

But I just think it’s so much more than that. From the very beginning I just found that studying accounting was narrow and that I really enjoyed the broader view. In addition to understanding how all those rules worked, I really enjoyed the broader discussion around the way capital flows to businesses and why it does and it doesn’t. How you evaluate returns and how you think about economic value, I just found really fascinating.

How do you stay up to speed with everything changing so much of the time?

One of my big pieces of advice for people, including in finance, is to get as much breadth of experience in a company as you can. If you really like the business, that breadth is just as important as depth. Yes, you want to be an expert in the finance field and in accounting, but the breadth of understanding operations and marketing and sales and tech and development, those end up making you a more valuable leader than just if you’re really, really good in a narrow vertical space.

How do you do that? Give us a tip about that broadening process.

Everybody always talks about managing your manager, managing your boss, and managing your people. But I actually think the most critical area is working with your peers. That, in my mind, is where you can really do the best job of keeping in touch.

People assume their questions are stupid questions. They’re typically not, they’re typically really good questions. Just because it’s not your area, it’s perfectly fine to ask a question, and then somebody explains it to you.

You, of course, were involved with one of the largest and most historic mergers in your industry with the purchase of Starwood. Talk a little bit about your role throughout that process, and then in the integration? Talk a little bit about sausage making there for the CFO?

First and foremost, you’ve got to make sure you’re paying a good price for it. For the first number of months, especially since we had another bidder try to come in and top us out and take the deal away from us, we were overwhelmingly focused on, what is the right way to think of the value of this combined enterprise?

That’s fascinating work and probably the dream of a lifetime for most CFOs in terms of really being able to take your ideas and then translate them into economics and think about how the market was truly valuing each company on that day. Really exciting.

But you had to always keep the big picture in mind: What was our ultimate goal? You, of course, don’t want to pay too much, but you also ultimately have to say, “Are we making sure that we are going to really get the value out of this merger that we think is there, and are we looking hard at the reasons why?” Every single leader involved in that deal was incredibly involved.

When you were going through all of that process, and then it’s completed, everyone cheers. Arne said, “Why are we cheering? We won, but now we’ve got to do something with it.” Can you talk about those first few months in the CFO’s role, your role in the integration? It was not easy, and there was some fairly rough sledding that went on there.

This gets back to some of what we’ve talked about in the pandemic. You’ve got to ride the ocean, you’ve got to know that there’s going to be stuff that comes along that you could have never predicted but you cannot ignore them, you have to get in and start really working with the details. To assume it’s all going to go swimmingly is naive.

Arne was such a positive person, that he was always said: “Okay. Fine, new challenge. We didn’t know about this one, but we’ll overcome it, we’ll find a way to work with it, and get through it.”

Of course, at first, there were big stacks of work that needed to be set up to integrate the companies. He was very good about making sure that people understood what they were responsible for. I had mine, Stephanie had hers, Tony had his, Craig… You know, everybody had their area to really lead in the integration.

But again, at the end of the day, there needs to be a sense of belief in what you can create. Because it’s not going to always be easy going. But we did believe—we really believed—that by putting these two companies together, we could create something that had uniquely more value than the two companies separated.

A couple of great questions from the audience to follow on there. You talked a bit about communication as a key skill for good CFO leader. Would you call that the most important skill for a CFO and how do you grow that muscle?

Good question. I’m not going to call it the most important, I think it kind of rivals analytical skills. I love numbers, to be fair. I do love numbers. I love accounting. I love NPVs. I love thinking about whether the way that we’re valuing something is appropriate. Are we really doing it right? I do love numbers, to be fair.

But I also think that without the communication part, you don’t really get the value of those analytical skills and results of what your study shows. You need to be able to explain to the rest of the organization and to outsiders why the ideas and the analysis really come together to say this is the right path.

And I think, frankly, to practice the muscle, it is about finding ways to become a good presenter. I know people laugh at the things like Toastmasters, but practice, in public speaking, makes perfect. And getting used to putting your ideas together and talking about them, getting comfortable with that, and finding ways to communicate with folks who don’t do what you do, so that you can explain it in a way that they can understand, those are really helpful parts of that communication expertise.

Another audience question: What is your strategy for key employee retention and attraction during uncertain economic times?

That’s a great question. At the end of the day, culture does play a huge role in people’s choices about how they spend their working day. I think the way we work together and the way that we treat each other in the work environment has such a disproportionate impact on how people feel about who they work for.

In my case, to me, it is unbelievably important for people to know how much I respect them, how much I appreciate their points of view, how much I appreciate their hard work, and that I care about them.

You talked about culture and we’ve talked a lot about the strategy, key relationships, and the key relationship really is with the CEO. I’d love to spend just a couple minutes talking about the relationship that you had with Arne and how you developed that.

I was very fortunate in that I had already worked for him. I’ve basically worked in his shop since I came to Marriott. It allows for a really good dialogue. It’s not necessarily right-and-wrong answers. A lot of business questions, it’s about the conversation and how you approach them.

I really appreciated how he came at business problems. I found them frankly uniquely perceptive. He was incredible with the numbers, but he was really broad in how he thought about business problems. We just found a way to have a dialogue that was, of course, supportive of what he was doing. He was my boss, but at the same time where I felt extremely comfortable. This is, again, one of the strengths of Arne, is that he always made everybody feel like their point of view was important and welcome.

He may not agree with you, you may not choose to do what you suggested to do, but he always made you feel valued for that point of view, even if he said you’re flat out wrong. I think we had a comfortable dialogue about the business and how I approached my work, that allowed for it to be easy in the process.

Just to wrap things up, what do you think is the most important thing going forward about this job and how to do it? What should be the big takeaway from today for CFOs who are trying to be better CFOs for the decade ahead?

The thing I try to work on myself the most is to not let my history with the company and with the business take over how I think about the future. It’s really important to stay current and to be looking ahead about trends, what’s happening, how that might impact our strategies, rather than get caught up in “we’ve done it this way for 10 years, 5 years, etc.”

My advice there is while there are, of course, the critical components of day-to-day results measurement, looking at your capital returns, understanding what’s happening with your assets, and how you deploy them, and also how the market values them.

I would say, for CFOs, making sure they take as much time as possible to be evaluating what’s going on outside of their company will only continue to be more important.

Leeny, I want to thank you so much for joining us here today. Good luck to you, to the new team that’s coming into place.

Thank you.