Big Builder '07 Conference

Cathy Smith Judging by appearances, Cathy Smith's position as CFO of the country's fourth largest home builder may come as a surprise. But the fact that she is a female executive among an almost entirely male-dominated upper management echelon isn't the only factor that makes her an anomaly. As Centex works furiously to recast itself as an emphatic "manufacturer of homes," it will be her talents on the manufacturing side of operations that Smith will rely on to leverage into a new, sustainable, lower cost structure for the once bloated and lethargic enterprise.

Despite her non-endemic industry background in aerospace, Smith doesn't regard herself as on completely foreign soil. "I come from [other] sets of industry. My thought processes are just rich in difference. ? It's just a different perspective."

And in expressing that perspective, Smith's voice has been unwavering in its belief that Centex needed to change its business model. "When you say this, you have to be sure the environment is looking for change, or otherwise you will be looking for a new job," notes Pali capital analyst Stephen East. "Lucky for her, it was."

With one of the most seasoned executive teams in the industry, Centex is recognized as an out-performer in its efforts to refocus its business. Still, it's a painstaking process. On one hand, leaders are trying to automate everything, bring back corporate centralization to finance and accounting, and get rid of redundancies in the field. At the same time, they are trying to trim back its corporate size and overhead costs. To date, after several rounds of layoffs, indications are that more will come. Clearly, managing a host of new initiatives at the same time is quite a balancing act.


The concept is not new: For years, the industry has grappled with the dilemma, "How are we going to separate the home building part of this business from the land part?" Today, Centex is aiming at the heart of that chronic issue with new terminology, asking, "How do we turn this into a 'manufacturing' style operation?"

Instead of home builders trying to excel across the board in land and asset management, construction management, and sales, Centex initiatives may inspire others to reassess areas of expertise and focus on specific core competencies.


As CFO of Centex, Smith is responsible for the company's finance, treasury, tax, investor relations, and information technology functions. After nearly 20 years in the aerospace defense industry, Smith joined Centex just one year ago.


"Centex is well positioned to achieve some of the underlying goals that they have set for themselves and actually transition towards this model," says UBS analyst David Goldberg. "Bringing someone like Cathy Smith in, with a manufacturing background, that's the mindset you have to take if you want to transition to this model. That might be the differentiator. It can't be business as usual."

To that point, expect the organization to pepper itself more voraciously with outside perspective. "Many people in this industry that have been in home building their entire lives," Smith notes. "But it is a rich discussion when you include the diversity of thought and opinion beyond home building. You'll see a big change in Centex. ...There is a big complement of people coming in from outside the industry."

Cathy Smith will speak at the Big Builder '07 General Power Session "Breakthrough: Balance of Power," Wednesday, Nov. 28 at 4:00 p.m. For more information or to register to attend the Big Builder '07 Conference.