Just under one in four CFOs in our region currently work in the manufacturing and engineering sector – making it the sector with the largest population of CFOs.

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The sector also accounted for more CFO appointments than any other and by an even larger margin than the overall population.

This data is taken from our first CFO Network Annual Report (contact Lucy Miles for your copy) and it will be interesting to see how the population total compares year on year in the future. As it stands, we are only able to look at the current population and the new appointments this year – of which 52% were made because of churn and 43% because of growth.

The attractions of the Manufacturing sector for a finance professional

Working in the largest population of finance professionals is a strong attraction on its own – a larger volume of opportunities and a large network to join - but there are many other important pulls to the sector.

We spoke with Phil Box – Group FD of Cepac, and a manufacturing specialist FD over the past ten years. We asked him what the largest attraction to the sector was:

“One of the great things about manufacturing and construction is that the companies and people you work with are working on real, tangible items. Manufacturing affects almost everything in our lives. Whether working on everyday items you buy at the supermarket or large construction projects, you can point to something and get the very real satisfying pleasure of saying the company I work for made that; you can actually see the outcome of your work in a tangible object. It’s given me a great sense of pride to be able to point at these outputs, no matter how insignificantly I have had a hand in producing them!”

The critical role of the CFO in the Manufacturing sector

We spoke with Phil White, one of the most experienced CFOs in the manufacturing sector, earlier in the year. We shared the results of our report with him and asked him why he thought the sector had been the most active for appointing new finance leaders;

“I am seeing more and more demand for manufacturing and engineering CFOs and expertise here, contrary to a few decades of focus on financial and other services and digital/tech.

The reason seems to be mainly due to the intense challenges facing these squeezed-margin businesses against lower cost global competition.  For some reason I am attracted to the challenge of fighting for the underdog, so I thrive on finding new financial solutions in challenging situations in manufacturing and engineering, B2C and B2B services, supply chain, distribution, contract management, and exceeding all key stakeholder expectations. Focusing on what drives the cash inflow is essential, as is cutting out what doesn’t. Much of the challenge is people-oriented in persuading colleagues to let go of evaluated sacred cows which no longer work and focus resources on new solutions and lines with more potential.

A strong CFO is people-oriented and can articulate situations and root cause effectively. Sounds easy? I rarely see it. As in any board position, a strong CFO has to understand and manage expectations carefully but firmly. Expectations are particularly significant for a CFO as they are backed by numbers and forecasts by which a board and the CFO succeeds or otherwise, so a firm hand on the tiller and a good understanding of the business and colleagues is essential here.”

The major challenges for CFOs in the Manufacturing sector

There are some consistencies in the answers provided by Phil White and Phil Box in their interviews above – these are also consistent with the most regular features on the job descriptions and objectives that we receive for CFOs in the manufacturing sector:

• Managing and controlling margins amid numerous external challenges.
• Having the right stock levels to overcome supply chain and fluctuating costs, balanced with the right working capital management.
• Strong direction to the board to contribute to the operational and commercial strategy.
• Trusted advisor to the CEO on all areas from long term strategy to risk management and day-to-day decisions.
• ESG strategies – this was once just applicable to CFOs in plcs and PE companies, but there is an increasing demand from customers, investors and employees to ensure that companies engage in operations that are environmentally friendly and sustainable.

You can request a copy of our CFO Network Annual Report by contacting Lucy Miles, view our interview with Phil Box here and our interview with Phil White here.

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