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Business Success: Saved through Innovation

How a “sunset” family company adapted to a changing market

May 10, 2019

A group of foundry workers wearing goggles stand around a ladle full of molten metal
Reliance Foundry was a successful manufacturing business in the 60s and 70s, before globalization.

Neither Brent nor Brad Done saw themselves becoming foundry men.

Reliance Foundry had always been in their lives: the factory was a hot, smelly, dirty place that was equal parts proud family legacy and tough taskmaster. Their grandfather, Fred, had left the foundry to his children Brian and Barry. A shifting business environment and increased competition meant the second generation were deeply etched with the stress of its upkeep. It was not inevitable that a third generation of Done owners would join up.

Still, it was a well-known to both, being family business.  After high school, Brad spent time working on the factory floor. He came home with torn knuckles and sore muscles to show for it; every role in the place was demanding and precise. Brent worked summers preparing invoices and doing other accounting work. It may not have been as physically demanding, but was still high pressure and exact. A small mistake in paperwork meant ripping everything up and starting again, but the clock was always ticking; a continuous stream of cash flow was essential to keep the foundry afloat.

Listening to foundry talk around the dinner table had made the challenges of foundry management clear. In their heyday, North American foundries worked locally, competing for clients who often had unique, precise, and limited orders. Sales teams would head out to talk supply with municipalities and industries. They were constantly on the hunt for new clients. A foundry’s products are built to last, and quality was the driving force behind the Done family pride. This credit to Reliance’s reputation was also a business challenge: although some industries had regular re-order due to heavy industrial wear, most of the iron made at Reliance could last for decades or centuries. A lamp standard or marine bollard does not need regular replacing. A great quarter could be easily be followed by a terrible one, or an excellent-seeming new client turn into a nightmare account.

Demand wasn’t the only challenge to management. Supply management was also a challenge. Rapidly-changing input costs in electricity and scrap prices made prediction and planning a difficult game.

The Done family worked through these challenges through ceaseless innovation: whether it was finding new alloys and industry clients or becoming experts in specialized skill sets, their business’ success was through risk and experiment. Brad and Brent were drawn to this innovative spirit, buoyed the entrepreneurial side of their family’s enterprise. Even outside the foundry, this was the legacy they would build upon.

Photo from the 1930s, of a debonair gentleman with dark eyes, speaking on a candlestick telephone
Fred Done, engineer and inventor, first bought Reliance Foundry in 1936.

Outside the foundry

Brent, the elder of the brothers, always saw himself as a bit of techie. His grandfather had been a tinkerer, inventor, and engineer; always interested in taking things apart and developing new solutions. Brent found himself echoing his grandfather’s enthusiasm for invention and curiosity—but in the digital world, rather than in the mechanical one. He spent time in the BBS scene on the fledgling internet, one of the early “modemmers” that were creating dial-in sites before the world-wide web developed. He was excited to dive into this world after high school, getting a diploma in Data Processing. A major grocery chain snapped him up after university, and he rose through the ranks, with a mind for systems that was useful both in the digital world and in the corporate one.

Brad, a social, curious kid, was less sure of his path after high school. The world was a big, interesting place and the options were endless. He asked his father if he could work in the foundry while he considered. Brian agreed, cautiously. Although he would have been happy for his kids to work with the family company, and enjoyed the hard work of the foundry, he was sensing the headwinds rising against manufacturing in BC. He was happy to see Brent moving successfully into a tech career that seemed to have a future before it. Maybe Brad’s best path was elsewhere, too. Yet the foundry had provided him a good life, and he began a foundryman’s training with Brad the same way his father had trained him. Brad was sent out to work on the floor, to experience the trial-by-fire in the heart of the factory.

The first few months challenged Brad to his core. Often up at 3:30 am, he’d get to the shop by 5. He worked at first as a “grunt,” a helper dispatched everywhere on the factory floor. Sometimes he helped with molding, lifting patterns and packing sand; sometimes he poured molten metal in punishing heat; other times he helped with the shake-out of cooling castings from the mold. He wheeled scrap with muscles unprepared for the task, and ground kiln wheels until his fingers were so stiff he needed to soak them in warm water to get them working again. Maintenance tasks were also part of his duty. Cleaning, moving sand, fetching and carrying. The day he cleaned the furnace bag-house (the scrubber inside the melting furnace flue), he came home coated in metal soot and dust, a black powder that stuck to the skin and made him stink of the factory and look like a chimney sweep. It wasn’t long before he started planning his own escape to university.

A group of men stand around a foundry pouring ladle, the glow lighting their heat-shielded faces
Brad (left, plaid shirt) spent time in most of the roles on the foundry floor.

Yet one moment of that year still sticks with him. One morning around 6am he was out in the scrap yard, wheeling metal to charge the melting furnace. The morning was wide and open, and the day about to start; as Brad moved pieces from heap to wheelbarrow—with muscles stronger than they’d been at the start of the summer—a thought struck him with a lifetime’s worth of force. ““I’m contributing here” he realized.

**

On Brad’s last day before university, there was a goodbye party at the foundry. One of the company’s longest-serving, largest, most intimidating employees stood up. The older foundryman was generally taciturn, but he cleared his throat and surprised everyone by raising a toast.

“I worked for Fred Done, and I worked for Brian Done. They knew how to work and were both fair. I’ve been watching this guy since he got here, and he knows how to work hard too.”

Brad was surprised by how moved he felt by those words.

Then September came, and Brad stepped onto the UBC campus. Trying a variety of courses, he eventually decided on a career in health sciences. He was swept up in the youthful energy of the place, feeling both part of the fun and distant from it, simultaneously. So many of his peers were just out of high school. They hadn’t spent a year in a foundry, sucking hot fumes and putting callouses on their hands. Drinking and partying was the culture of kids newly giddy on adulthood. Brad wasn’t immune, but he also felt something was missing. Was it just the paycheck? It wasn’t much fun to go from a bi-weekly check to genteel student poverty.

Later, Brad would learn that struggling for cash-flow didn’t put him off when he was engaged with something. What dulled his interest was the feeling that he wasn’t contributing. He still didn’t have a clear vision for where he could make a difference in the world.

And at home, the foundry was calling.

An aerial photo captures a busy port with cranes and shipping containers ready for overseas trade
Globalization changed the nature of work in North America and challenged many manufacturing jobs.

A struggling industry

In the 1980s and 90s, manufacturing in North America was rapidly changing. Foundry work was increasingly being sourced overseas, and unionized local shops were trying to compete with cheaper labor and scrap in foreign markets. Barry and the foundry sales staff, used to competing on reputation and relationship with local competitors, now had to fight a new dynamic in play. Supply chains were being sourced by brokers who made bottom-line deals for Chinese castings. These brokers often did not have a clear understanding of metallurgy, and local foundries could still compete on quality. Yet this was a shrinking client pool. Quality was important in some applications, but in others, the cheapest price would win the day. Very few purchasers were buying a product they wanted to last a century.

Reliance Foundry was not the only foundry that struggled to keep afloat in the shifting waters of globalized trade. At the height of the industrial age, there were more than 140 foundries throughout the province of British Columbia. Today there are likely less than 10. This decline was picking up speed throughout the 80s and 90s.

Reliance also had a traditional management structure challenged by the changing times. Union workers did their jobs: management sat almost exclusively with the owner-operators. Brian Done had the final say in almost all operations at Reliance Foundry, meaning that sometimes work would stop until he could place his signature on a document. Barry worked on the accounts. This division of labor had been working, but it wasn’t scalable to a larger plant—and in a shifting work environment it meant a decision-making bottleneck.

Brad saw these issues affecting the family business and wanted to be part of the solution. Adaptation and exploration were necessary to keep the business alive, but the industry was fluctuating. It wasn’t clear where survival would be found. Flexibility in managerial style seemed one helpful innovation. In 1986, Brad left school and returned to the foundry, and after a few years of learning the ropes, he started trying to help operations by getting ahead of problems, delegating decisions from his father to himself.

Brian wasn’t so sure. When purchase orders and work requests started landing on Brian’s desk, father and son had quite a few heated conversations. It took steady self-confidence and several years’ work before Brian felt confident in Brad’s judgment.

Then, in 1991, the controller of the company retired.

**

A grainy black and white photo captures a 1960s office at Reliance Foundry
Automation of once manual work was a key to business success.

In 1991, Brent Done was a senior analyst, still working at the grocery company that had hired him out of school. He managed a team, which meant spending a lot of the day in meetings and paperwork. Moreover, from his position in such a large organization, there was not a lot of big change he could affect. Like Brad had also done, Brent was considering how and where he could make his mark. He liked to build systems, and he liked to take risks—but taking risk was only rewarding when he had some control over it.

From working summers in the office, Brent remembered his grandfather had attempted to innovate against standard foundry pricing, which was generally set as a price per ton. Different types of alloys could make or lose money as scrap metal prices fluctuated, but seeing what outperformed cost was challenging without accurate aggregation. Scrap prices, electricity, capital costs, labor: their proper accounting could make a powerful tool for management. Yet, in Fred’s day, the log-books and paper spreadsheets made number-crunching to that level impossible. It would take weeks, after which the numbers were already out of date.

Brent knew he could program something that might give Reliance a better shot. By coming back to the foundry, he could make more of a difference; like his brother, he too was interested in the wide-open possibility that an entrepreneurial path might allow.

So Brent left his day job behind, and stepped into the retired controller’s shoes. He walked into a company that still operated all accounting and administrative functions manually, but understood that automation was the wave of the future.

In the years after he joined the company, he revolutionized the office systems, getting a real handle on the cost-aggregation system that his grandfather had always wanted to do. It made all future development and analysis possible. For the enjoyment of digital tinkering, he built a website for Reliance in 1996, one of the first manufacturing companies to think of creating an internet presence. He was surprised when the website soon after fielded a query from Little Rock, Arkansas. Foundries had always been a local business.

Brad, meanwhile, was considering what he was learning about scalable management: he wanted to surround himself with people he knew could take care of the business as well (or better than) he could. He remembered that moment wheeling scrap, the feeling of satisfaction that came from contributing. When they talked it over, he and Brent agreed in creating a more flexible management structure. They saw that harnessing the energy of everyone’s best contribution would allow a business to be more flexible and scalable than a top-down management style.

Yet it was clear the business was failing, regardless of these new ideas. When Brad attended a government-run conference to learn about corporate adaptability in an era of globalization, he was told by a government representative he should let the company go. Reliance was part of a “sunset industry.”

A hundred dollar American bill is on fire on a black background
Before restructuring, there were times that working meant more money was burned than earned.

It wasn’t easy to deny this statement. One afternoon, they got a re-order from a customer who required specialized work in an expensive molding. Brent’s cost system showed exactly how much money they lost every time they did such a job. “We should just attach a two-thousand dollar cheque to the purchase order, and then send it back,” they joked with one another. “It’d be cheaper than doing the work.”

Yet neither would easily walk away, even though sometimes they were making ends meet by taking on personal debt. Brad’s hesitance around university for lack of a paycheck was small beans compared to the financial risk both brothers were taking. Reliance was heading for bankruptcy. The older Dones were soon to retire. It was time to decide: should they let Reliance go and walk away? Or was there something to salvage out of its old bones?

A possibility: Reliance Foundry #3

There might be many liabilities to Reliance, but there were also personal assets for the younger Done brothers: knowledge hard won over generations.

Brad and Brent knew industrial metal. They had a lifetime of stories about the needs and demands of clients, and a lifetime’s worth of observations about the management of industrial supply. They could see an opportunity for meaningful leadership in staying with Reliance. There were new avenues for possibility. With the website drawing customers from the United States, they could be an international company. And with the way the wind was blowing, they knew they had to consider non-local manufacturing.

Common castings could be made overseas to the same and better quality—but only with sufficient oversight. Rather than leaving clients to broker through non-expert purchasers, Brad and Brent explored the possibility of providing metallurgical analysis and supervision of overseas vendors. Further, they realized the power of creating stock lines for an international market, rather than focusing only on local custom projects. As an overseas contract manufacturer, Reliance could do the process and specifications to maintain quality. Industry knowledge meant clients could trust them.

Brent looked after the website and continued to update the systems at home, and Brad began travelling overseas to look at foundries and inspect quality and manufacturing processes. Taking the leap meant being comfortable with international travel before it was common. Brad travelled to places where the Reliance delegation were remarkable oddities. He leaned into confidence that he knew ferrous sand casting, even if he did not yet know how to find global business success. As per Brent’s requirements, this was a risk, but one they had control of.

Brad spent a lot of time negotiating and evaluating products made in China and became confident in the castings he was ordering. As they arrived at the Canadian factory, they went through final machining and heat treating stages that allowed for the local metallurgists to do quality control.

Attractive bollards stand outside a historic ballpark
Snatching business success from failure meant stock lines, offshore manufacturing, and economies of scale.

The younger Dones had another asset: their strong working relationship and mutual vision. Brad recalls: “Brent and I didn’t have conflict. Perhaps we’ve had one argument over the years, but if so, I don’t actually remember it.” Instead, they both “enjoyed running things in a new way.”

Not that running things in a new way was easy. There were a lot of changes happening in a short amount of time. Employees felt the pinch of the industry’s misfortune. Lay-offs were necessary. In a family business, that in some cases saw multiple generations of workers, this is not always easy.

Still, Brad and Brent decided to buy the bankrupted manufacturing firm from their father and uncle. But they agreed on one iron-clad rule. “We decided we’d never lose money again: that mortgaging the house and putting payroll on credit cards wasn’t working, and we weren’t going to do it once the business was ours.”

Innovation: change as a constant

As the new century rolled over, Brent and Brad embarked on the process of making a dying foundry into a global supplier. Brian and Barry watched, without saying much: there was neither pushback nor greenlight. The business was changing, and the older generation was letting go. What it could become was hard to predict.

Custom castings were still being done in the plant at home, but costs became harder to justify. In 2003, there was a final accounting: old machines, which had been running since 1966, would need replacing. Would a capital expenditure of $5-6 million dollars make any long term sense? Brent’s clear accounting said no.

It was the end of an era, but Brad and Brent decided contract manufacturing would replace all local casting work. The Dones did what they could to relocate employees, but it was still painful for those who’d spent a lifetime in a career at Reliance. One employee watched the plant closing and said bitterly to Brent: “Your grandfather would be rolling in his grave.”

Brent hoped that wasn’t true, but wasn’t sure there was any other way to make the business work. He chewed on the comment for quite some time before sharing it one evening with his father.

Brian was pragmatic. “No,” he said. “We’ve had to adapt any number of times through the history of Reliance. You’re just adapting.”

Still, when the dust settled, Reliance had only five employees. Brent and Brad, of course, but also Len, Dave, and Rick (himself a second-generation Reliance employee)—the most senior, knowledgeable foundrymen. Everyone wore many hats during those first couple of years, filling orders, sourcing vendors, hiring, accounting, and managing workflow. Technologically, Brent was still innovating, bringing all the company’s functions into a single program, so that sales, purchase orders, and inventory all came through the same system. This responsive integrated system was a revolution in the same vein as Fred’s early cost-aggregation, but on a level unimaginable 70 years previous. This system also provided a real-time back end for the website, which evolved from brochure into storefront and growing client resource over the intervening years.

Four entrepreneurs stand in front of a pink building marked Reliance Foundry
Three generations of Dones, from L to R: Brian, Conner, Brent, and Brad.

A familial culture

Reliance no longer has ladles and arc furnaces on site, but the cultural legacy of that time still runs deep. A sense of employees as belonging to families and tradition is not ever far away in the minds of those in a family company. Many members of the Done family made Reliance what it is. Brad and Brent’s sister, Cherie, spent time in the office, the first of the Done women to work in the family business. Chris, another cousin, spent 10 years working in the foundry itself.

Long-term employment was common until the disruption of the 90s: it was not odd for those in Fred’s generation to spend a lifetime at the same company. Nowadays, people change not just companies, but careers, multiple times in their lives. HR representatives don’t blink at shifting employment histories.

Reliance’s innovation has meant that those that stayed often had to grow, changing career focus during their lifetimes. Len Cranmore is now the longest-serving current employee, at 43 years full time with the company: he came to see what foundry-work was like one summer and never left. (He is still a few years short of Brian Done’s tenure, at 46 years!) Len now works in sales, although he likes to keep abreast of purchasing, and is a constant resource for his long-term foundry expertise. Keeping with the family tradition, Len’s grandson came for a co-op placement one summer.

Rick Pasternack was a second-generation employee who worked his career at Reliance. Brent’s kids have also made their mark in the company, with Conner Done making the fourth generation of Dones to take full-time employment with Reliance, and Olivia and Ryan filling summer roles and gaining work experience. Two of Brad’s children, Jackson and Josh, have also spent summers in the family trade.

The long-term engagements for Reliance are not just with employees. Relationships with clients, vendors, and suppliers that span decades—throughout the times of retrenching and innovation—have been vital to the corporate culture. One top client today has been with the foundry since the early 1970s.

Innovation has been an indispensable part of Reliance’s business success story, but it comes hand in hand with respect for long legacy and the impact and contribution of its people. From this solid history the company looks toward a creative future for the next hundred years—a future in which each person at Reliance can make their own best contribution.

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