By Brent Banda
Perry Foster talks about his career as a series of interactions with people. He places great value on trust earned through a long-term working relationship. People are measured by the motivations behind their actions. It’s a perspective that has been present throughout his business career but was shaped early in his life by childhood experiences.
THE EARLY YEARS
A. P. Foster was born in Moose Jaw in 1930. Foster remembers his older siblings encouraging him to help others. “We didn’t have luxuries such as a gas furnace or a rototiller. There was a lot of work to do. I remember my older brother suggesting I help my mother with some household chores. We were always working, always contributing to the family.”
Foster’s mother was educated as a registered nurse and encouraged him to attend university. She had a strong influence on his values. “I remember once when I was telling my mother about something a friend did, but I was really trying to find out if she disapproved of this friend’s behaviour. Of course, she was smarter than I thought. She knew what I was doing. She said, ‘Perry, if you were to do a thing like that I’d have a hard time being proud of you.’”
The influence of Foster’s father in his life is captured in an appreciation for common sense and hard work. “My dad worked for the railroad in the North-West Territories during his 20s. One of the towns he visited had a new library. He introduced himself to the librarian and asked if she could teach him to read. She said yes, and after that he’d ask for help at every library he’d visit. It wasn’t easy, but he learned to read and became a well-educated man. These were pioneering times in the 1800s. He had to make do and take care of himself.”
Perry Foster completed his Bachelor of Engineering (Civil) at the University of Saskatchewan in 1952. He worked in Alberta and British Columbia from 1952 to 1957. He worked for a consulting firm and for the City of Calgary, gaining experience on an impressive list of complex construction projects, including the only concrete high-rise building in Edmonton. Some had doubted the structure could support the weight of the concrete, but the building was a success.
Foster recalls being in a meeting related to a major construction project. Financial issues were being discussed, and he felt he was listening to a foreign language. He quit his job in 1957 and enrolled in the prestigious Master of Business Administration program at the University of Western Ontario.
Foster met his future wife, Eileen Kearney, in 1957 while in Ontario. They were married in July 1959. Foster completed his MBA that same year and took a job in Saskatoon managing the construction division of a local firm, Westcon Engineering and Contracting. The company had a good reputation and was expanding into Regina, Calgary, and Edmonton. But the fact was, it was bankrupt. In December 1959, Foster was unemployed.
Foster did not have the funds – he had only $300 cash to use as working capital. But he had worked hard to build strong relationships with suppliers and customers in the business community. He had a creative idea for how he might finance the business.
ENTREPRENEURSHIP
Foster considered career options. He had more contacts in Alberta, but he and his wife both felt Saskatoon was growing on them as a place to work and raise a family.
Westcon’s former owner agreed to a meeting. Foster asked if he had plans to continue with his construction company. The answer was no, and he encouraged Foster to start his own business.
Foster did not have the funds because of the cost of his recently earned degree – he had only $300 cash to use as working capital. But he had worked hard to build strong relationships with suppliers and customers in the business community. He had a creative idea for how he might finance the business.
“I’m thinking of starting a business,” Foster told Roger McCaig, owner of Redi-Mix Concrete, “but I don’t have any money. You can be my exclusive supplier of concrete, but I need 60-day terms and a competitive price.” There was some familiarity between them, but Foster’s offer was attractive for a different reason. Redi-Mix was not getting its fair share of business from homebuilders in Saskatoon. Foster was offering an open door to that market. McCaig agreed.
The next stop was the Imperial Bank (now the Canadian Imperial Bank of Foster did not have the funds – he had only $300 cash to use as working capital. But he had worked hard to build strong relationships with suppliers and customers in the business community. He had a creative idea for how he might finance the business. Commerce), where Foster asked for a $6,000 line of credit. “I won’t give this company a cent,” said the bank manager. “I will, however, give you a $3,000 personal line of credit. You won’t have any problem paying that back with your education.”
Foster immediately went to see Al Meyers, owner of Meyers Construction and a former Westcon customer. Meyers was a retired Airforce group captain with a reputation for being someone you could trust. Foster described his financial arrangement with McCaig at Redi-Mix and asked Meyers for his business. “I said, ‘I need to get paid in 20 days. I’m a dead duck if I don’t get paid and that’s not good for you or for me.’” The concept was simple: Foster would prepare a home’s foundation for Meyers Construction, and Redi-Mix would supply the concrete. Meyers would pay Foster within 20 days. Foster would then have 40 days with the cash in his bank account before having to pay Redi-Mix. This creative arrangement took the place of traditional working capital. Meyers had listened carefully to the plan and agreed.
Meyers and Redi-Mix’s McCaig were comfortable with the deal. In fact, when Foster was walking out of Meyers’ office, Meyers called out, “Perry, if you can’t make payroll and I owe you money, you come see me personally.” There was respect between the men, and Foster had a lot to live up to.
Five years later, Foster had accumulated a reasonable amount of capital and was approached to purchase a concrete products company based in Saskatoon, Weldon’s Concrete. Weldon’s grew in value and Foster decided to sell the business in 1975 for cash.
Foster was looking for another business to buy. He had instructed his accountant to prepare his statement of net worth. He provided the document to a few bankers in Saskatoon. “I realized they would know of people interested in selling their businesses. I encouraged the banks to put the two of us together.”
In 1976, a representative from Western Economic Development Bank called with the opportunity to buy Industrial Machine and Manufacturing, a 20-year-old manufacturing business. Foster bought it.
AN UPHILL BATTLE
Industrial Machine and Manufacturing – known as IMM – was the largest machine shop of its kind in the province. It had 25 employees and could put 200 hours a day on a project. The former owner of IMM was a machinist by trade. He was smart, adventurous, and had confidence. IMM supplied many of the potash mines and other light industrial clients in the province.
Foster loved many things about the company but recognized he did not know anything about the metalworking business. “That’s fine,” the former owner told him, “I’m here for advising and consulting if you need me.” Foster paid cash for the business, signing a 10-year lease to operate from the existing 20,000 square foot manufacturing facility.
The situation did not unfold as Foster expected. IMM’s former owner, who was also IMM’s landlord, had set up a competing business in the same building that IMM was operating from. Foster had to figure out how to run the business on his own. He worked no less than 16 hours a day, 7 days a week.
The business did well over the first several years despite Foster having to navigate a difficult competitive environment. “You’d occasionally see some dirty tricks,” says Foster. “One competitor phoned a customer we had won a job with and said they didn’t have the capacity to take on the project, but if they did, they’d be able to do it for a much lower price.” That business could not have delivered on the lower price. The only purpose of the call was to weaken the relationship between IMM and the customer.
It was a difficult time to run a business that served the potash industry. “At one time, the mines in Saskatchewan were shut down for just over 26 weeks,” remembers Goster. “In the early 1980s, we were serving the potash and power generation industries but not doing much for uranium or anything else. I was scrambling and tried to find work for IMM elsewhere. I was complaining to someone at an engineering firm that it was tough on us. He set me straight: ‘Don’t complain. A lot of guys are going broke. At least you can pay your bills.’ I realized we were doing much better than most. Sure, it was tough, but usually you win because you just don’t quit.’”
Foster has tenacity, but he also has skill in operations. When he bought IMM it did excellent work but had no systems in place to manage operations. In the 1980s and ’90s, Foster was performing time studies on workflow. He’d walk onto the shop floor with a stopwatch. He’d catch some of the staff off guard but explained that he wasn’t trying to intimidate them, he was trying to find a way to be competitive with pricing because IMM was losing work to other shops. The employees bought into the idea and came to him saying, “Perry, I think I can do this. I think I can up my speeds and feeds. But we need to put this pallet closer.” This was before the concept of lean manufacturing really took off.
A YOUNG FAMILY
When Eileen Foster was first pregnant, she had “the talk” with her husband. “She told me that I should be able to bring the bacon home some way, somehow. But she was finished working for money. There was all kinds of work the community needed, and somebody needed to do that.”
This conversation was the start of two important areas of focus in their family life. First and foremost, Eileen Foster was going to focus on raising the kids. They eventually had two boys and two girls. Second, she was going to give back to the community. She was a hard worker and had a kind heart. She poured her time into a variety of causes that touched their personal lives, such as providing support to people with cancer.
As much as education was important to Foster, so was hard work.
Perry Foster is proud of the kind of people his children have become, and quick to credit his wife for instilling strong values during their upbringing. “I remember when one of the kids was leaving the house to shovel the walkway of an older couple that lived down the street. Eileen called out, ‘Don’t let me hear about you taking any money. They just need a little help.’”
As much as education was important to Foster, so was hard work. Lina Foster remembers what it was like to grow up in a family business. “All four of us kids worked at a young age. It was a real job. We were paid. I started when I was quite young. I remember we had this old microphone system with the speakers in the shop, and I picked it up to page him and said, “Dad, I mean Perry, there’s a phone call for you.”
The Fosters’ children were not just integrated deeply into operations, they were learning about the skills needed to run a business. “One of my other jobs was to copy marketing material,” Lina Foster says. “I was a reader, so I’d be learning about the products as I worked. I also filed invoices after they were paid. Dad made sure we knew what part of the process the invoice was for and the fact it had been paid was an important step: ‘Here’s the flow; first you get an order, then you do the work, then you send an invoice to the customer, then you get paid, then you archive it.’ And when I was punching a hole in the invoice before placing it in the binder, I had to make sure my work was not sloppy because someone might have to look at it later.”
The entire Foster family worked together – Eileen Foster worked in the office part time for several years as well. The family also played together. They had a passion for the outdoors and spent time at Waskesiu and Lake Diefenbaker. The children cherish those memories.
THE FAMILY BUSINESS
Three of the four children in the Foster family chose to work at the business at some point in their adult careers. Christine Foster moved away from Saskatoon, but Lina Foster managed administration and finance at IMM after completing an MBA. She held that role for several years before choosing to build her career in a different industry.
Craig Foster, the family’s elder son, started part time at IMM when he was 13 but moved to full time once he finished high school in 1981 and was placed in the centre of operations. He manually calculated handwritten timecards that needed to be logged for job costing. Then he moved into estimating and purchasing.
Then everything changed. Eileen Foster was diagnosed with cancer in 1986. The family tried to balance work and personal demands. When IMM moved into its present location in 1986, Craig continued to take on larger management roles. “We all did our best to support each other and keep everything together,” Craig
Foster recalls, “but it was not easy. I was working at night getting material sprayed so the guys could grind it during the day, or I was bringing material in for the morning.”
Business had to continue, and family responsibilities continued to evolve. Tom Foster, the family’s younger son, began working at IMM in 1991 after completing the Mechanical Engineering Technology program at SIAST, since renamed Saskatchewan Polytechnic.
When Eileen passed away in 1992, her illness had taken its toll in many ways. Personally, the family was devastated.
The focus was on building a good team that could acquire and deliver the right work.
The next few years involved a period of growth for the business. The company had a strong base of skilled and loyal employees. New employees were attracted to the thriving company. The right people and systems were being put in place.
The Fosters were hiring people when it made sense. “We only hired people when it appeared the upcoming work was sustainable. If not, we’d rather pay overtime than go through the cycle of hiring and laying people off.” The focus was on building a good team that could acquire and deliver the right work.
One evening the phone rang at the business. Craig Foster was in the shop and picked up the extension in the tool room. “The person told me he worked for an oilfield company. He asked if we could make parts. I said yes. I answered all his questions. He said he couldn’t get anyone to bid on the job the way he wanted it done. I told him we could do it. We were contacted to bid and were awarded the job – for hundreds of parts.”
This new customer was crucial in IMM diversifying into new markets. IMM built trust over time by learning the customer’s business and listening to what they wanted, then used that credibility and insight into how the customer’s equipment worked to suggest product improvements. This customer still does business with IMM.
A TIME OF CHANGE
Perry Foster retired in 1997 and sold the business to his two sons. Tom Foster ran the production floor and Craig Foster ran the office and took the role of president.
In 2007, Craig Foster was 44 and decided to retire from IMM. “I was tired. It was the same work, the same jobs every day. I needed something new.” The two brothers worked out an arrangement and Tom Foster bought his brother’s shares.
Craig Foster left the business in good shape. The company was poised for growth. It was attracting the kind of challenging work that skilled machinists and welders aspire to work on. Tom Foster explains how momentum seemed to build on itself. “We began to get people approaching us even when we were not hiring, saying they admired our company and would like to be a part of what we are building. We firmly believe that a good process needs to be in place, and Dad brought that focus in. We keep all our job files. We still get calls today from someone we built something for in the ’90s, and they want another one.”
To everyone in the Foster family, this momentum was the culmination of years of work. “The long-term vision for IMM has been debated within our family for a long time,” Tom Foster recalls. “Craig was aware of it, I’m aware of it, and we’re able to fulfill that vision that started forming in the ’70s.”
The business had the opportunity to grow, but it also needed to operate in a way that could handle the growth. Much of this depended on finding the right employees, which was important to Perry Foster right from the start. “You need people to work smart and care about what they do,” explains Foster. “You need less supervision with good employees.”
IMM has changed drastically since its days as a 20-person shop. It now has 104 employees and has diversified, regularly shipping products to the Middle East, Europe, and the Asia-Pacific region. The company operates 50,000 square feet of facilities, and recently purchased an 80,000 square foot building and is
planning its move into this new facility.
Tom Foster is currently IMM’s president and CEO. His role has evolved significantly since taking the position in 2008. “It’s hard to pull myself out of operations,” he says. “I love the shop floor. There is a lot of satisfaction from seeing what you have built. It’s hard to get the same thing from management until you realize how rewarding it is to develop good people within the company. Now that we’ve put a senior management team in place I’m focusing on planning for the future.”
There is a lot to plan for. IMM has doubled its revenue in the past year. Much like what the company experienced with the oil industry, IMM’s growth is largely driven by first listening to the customer and then using their knowledge of the equipment to gradually adapt products around customer requirements.
Growth is exciting, but just like his father, Tom Foster is focused on improving the business. “One of the reasons we bought the new building was that we have made several changes to drive waste out of our processes. The next step with efficiency required a new building, so we were willing to make that investment.”
Tom Foster is facing a situation like what Perry Foster faced years ago. Decisions must address new technology, increasing customer demands, international pressures, and increasing competition. And like his father, Tom is trying to teach his children how to navigate their own lives as they move into adulthood. The business seems to be a natural venue to learn. Tom’s three daughters are quite young, but all have an interest in working at the business. His son, Sean Foster, was recently a summer student at IMM.
A HELPING HAND
Perry Foster will be 90 in April 2020. Some of his stories provide him a great deal of pleasure and some continue to have the bite of a difficult time in his life. “Some guys will kick you when you are down,” Foster explains, but his expression quickly brightens as he finishes his thought. “But most will give you a hand to help you up. Al Meyers was one of the best at helping others.”
Al Meyers, the owner of Meyers Construction, who had cooperated with Foster’s financial arrangement back in 1959, had given Foster a hand when he needed it. Foster smiles broadly as he tells one final story about his former mentor. “Meyers built our house and I was in his office writing him my final cheque. I asked if he made money. He didn’t answer, so I said, ‘After everything you did for me, you better have made some money off me.’ The only thing Al said was, ‘That’s none of your business, but write the cheque.’”
First published in the December 2019 edition of The Business Advisor.