In accepting the award for 2024 CFO of the Year from StrategicCFO360 and the CFO Leadership Council, Peter Osvaldik of T-Mobile, reflecting on his rise from the accounting and controllership sphere, had a message for the attending finance executives: it’s our responsibility to nurture the next generation of CFOs:
“Be proud of all the hard work you’ve put in; you deserve it by reason of being here but start paying it back to those below you because we have a responsibility. Give them the opportunity someone gave you.”
Speaking to the finance chiefs gathered at Rockefeller Center in New York shortly before the holidays, Osvaldik acknowledged that accounting and finance organizations face challenges but said he was “super bullish” on the profession. Finance executives need to ensure “people come along for the ride, and we keep growing it,” he told the audience.
In Osvaldik’s view, embracing the role of strategic partner is necessary if finance chiefs and the finance department are to thrive. As AI and automation streamline or replace unappealing manual, repetitive tasks, potential entrants to the field will find the strategic aspects enticing.
However, while being a strategically minded CFO is imperative, it is not easy. How do CFOs and their teams claim a seat at the strategy table, pushing the organization to achieve financial objectives and influencing company strategy and translating that strategy into execution?
Osvaldik addressed that question and others in his remarks. Among the high points he made were the following:
Strategy Follow-Through
Translating strategy into actionable, day-by-day insights is at the core of the CFO’s job. All companies have a strategy. But, asked Osvaldik, is the company’s strategy deeply understood and driver-based? Do you, as CFO, know how strategy manifests itself in financial efforts this quarter and multiple years down the road? Are you ensuring that (1) you’re making the right financial investments in strategic areas and (2) you understand how delivering those will achieve the company’s financial goals?
Passion Required
How does finance become a strategic partner to the business and avoid the tendency for finance to remain siloed? “One of the things that’s been successful for me is having a passion for the business,” Osvaldik said. “When you love the business, you see your role transcend accounting or finance.” Successful CFOs also have an innate curiosity about the business, says Osvaldik. Do you understand operational processes? How is the value created in other parts of the organization accruing to enterprise value creation?
Say ‘No’ Transparently
Understanding the problems business partners face is essential, but business partners must also understand finance’s challenges. “A lot of things that we do in accounting and finance, we hide behind complexity,” Osvaldik said. “I think the best practitioners in this space can take what immediately can be very complex” and interpret it for the rest of the business.
That includes instances in which finance has to deny funding for a new project or business idea. “Do you convey why you’re saying no?” asked Osvaldik. He encouraged CFOs to be open about the “why.” What are the constraints? Is it a financial constraint on the entire company or just one area? Why are we funding that project and not this one? “Make sure you’re always saying ‘no, but I’m here to solve the problem with you,'” Osvaldik said.
M&A: Ask Why
While the April 2020 merger with Sprint was a straightforward, compelling value-creation opportunity combining the number three and four players in the wireless market, Osvaldik questioned the motivation for other M&A deals he has observed. Osvaldik said some transactions appear to be done just to distract the investor community from a poorly performing business or provide air cover for a CEO.
“Ask yourself, why are we doing this merger? You have to make sure there is a fundamental driver,” he said. Overenthusiasm, deal fever and overestimated revenue and cost synergies are common.
“You have to make sure that the strategic and financial business cases for the merger work with rational risks,” Osvaldik said. How is this business going to fit into the overall strategy? Who’s going to be responsible for it? Sometimes the business case sounds great, says Osvaldik, and the board approves it. The business case is applied. Then, the business or product is shunted to the side and “becomes a science experiment because there isn’t the right level of accountability.”
AI: Still Boarding
AI will change the nature of the finance function, but it’s still in the early innings of its adoption and application in finance, according to Osvaldik. While CFOs should be thinking about AI and its ability to revolutionize processes and functions, he said that world is in the future. “If you’re concerned that the AI train has left and all the companies around you are fully automated and have predictive analytics at the push of a button, don’t be worried; it’s not there yet,” opined Osvaldik.
T-Mobile’s Osvaldik was named 2024’s CFO of the Year for “steering the wireless carrier to new heights” in overseeing the T-Mobile-Sprint merger that has delivered more than $70 billion in shareholder value since 2020. The awards committee of peers also noted Osvaldik’s success in T-Mobile’s financial strategy during unprecedented growth and transformation. Osvaldik joined T-Mobile in 2016 as senior vice president and chief accounting officer.
