The C-Suite’s Changing Role in Value Creation: An Interview with Jørgen Rostrup

By Alexander Roos


Today’s business arena is characterized by unprecedented complexity; rising expectations from investors, customers, and society; and ever-changing criteria by which stakeholders judge a company’s performance. To deliver always-increasing value in this challenging environment, many large, complex organizations are striving to transform themselves. C-suite executives must play a central part in this effort—starting by viewing their role through a decidedly new lens.

With these imperatives in mind, Jørgen Rostrup, executive vice president and CFO of Telenor Group, met with Alexander Roos, a BCG senior partner and managing director, to dig deeply into the topic of value creation. Among the themes their conversation covered were the real meaning of the term value creation, the role that the C-suite—especially the CFO—can play in value creation programs, and ways in which active portfolio management can support transformation efforts aimed at boosting value creation in a business.

About Jørgen Rostrup

Executive Vice President and CFO, Telenor Group

Jørgen Rostrup joined Telenor as executive vice president and CFO in November 2016. He quickly started taking steps to reshape Telenor’s portfolio and drive a stronger cost agenda. His actions have led to a record EBITDA supported by a solid balance sheet and dividends, bringing a significant boost in share price as well as increased market confidence. Rostrup earned a master’s degree in business from the Norwegian School of Economics and has served as a board member of Argentum and Citus.

What does the term value creation really mean? Is it purely financial?

I would say that value creation means achieving a higher standard. And while several of the metrics are financial, the means of getting there and its content are much broader. Value creation is about people. It is about culture. It is about whether we are moving our agenda and our performance in several categories in the right direction.

Let’s consider the role of the C-suite in value creation. Focusing on your job as the CFO, describe the role you can play in a value creation program.      

I believe the CxO level as a combined group has the role of performance generator, performance developer, and value creator team. In particular, I would say that my role as CFO is partly being an activist in value creation when that is needed. The second is a facilitator’s role between the CFO and the rest of the team, to make sure that we have transparent and good discussions and that we are taking the tough priorities that value creation often implies in a good and open way.

What is the biggest challenge facing you—the CFO—regarding driving value creation at Telenor?

It is the act of balancing. Today’s environment implies a lot of complexity. We have talked about many levels and parts of value creation. There is a large stakeholder environment. There are rapid changes. Complexity is higher than ever. In true value creation, we need to balance—for example, the short-term gains versus the longer-term transformational activities—and allow a big space around the table when we do our priorities. That is a struggle every day, but if you set up the good dialogues, the right people, and some good metrics and KPIs, then it’s possible.

In the context of value creation, would you speak to the role of portfolio management at the group level? How does portfolio management contribute?

Portfolio management is, of course, a vital part of a group’s or a top management’s agenda—and hence, also a vital part of value creation. I would like to address it, if I may, in two different ways. First of all, the business portfolio: a large group is holding one dimension of it. As for Telenor, we made a decision to sharpen that portfolio to increase value creation, taking out some businesses that have limited development potential in our context. This gives us an opportunity to be more granular in spending time and nurturing those units and businesses that can further develop in a significant way.

The other part is how close you are to the different units; that is, how active you are in your portfolio, on an operational and strategic ongoing basis. It is attached to the first issue. You need to be able to get your arms around it and really spend time with those units. There will be things that the group and top management see more quickly, easily, and holistically that are beneficial for the local business. But there are also signals that need to be picked up from local businesses that you will struggle to pick up if you’re not close enough to those businesses.

How has the drive for value creation changed over the last few years?

I believe the term has become broader. We are in more complex terrain. We are under heavier scrutiny. Expectations for global companies have been raised on several fronts—not necessarily on the financial front but on how we deal with people, how we benefit local communities in which we operate, and how we handle dilemmas around corruption, security, IT, and cybersecurity. It’s a much broader agenda. We are measured in a much tougher way on what value we contribute to the shareholders—but more so to customers and to society around us.

On top of that, technology is moving more quickly, and new business models are entering the stage. The bar has been raised, and the CFO perspective needs to reflect that. That makes the role of the CFO also more complex. A CFO today needs to embrace all those elements—not only the financial aspect of it.

Thank you very much for this insightful discussion.

Thank you very much. It’s a pleasure being here.