Afterword - I'm Just Gerry

By Gerry Price

Throughout my life, I have undertaken new activities, have had setbacks that I learned from, and then have tried again, over and over, until I was successful. This I like to call “learning by doing.”

As a young man, I never aspired to be a businessman. I was raised by parents who themselves lived through the Great Depression of 1929 to 1932 and World War II, profoundly influencing how they would raise their family postwar.

I was raised with the gift of independence from my parents. I had chores and responsibilities from an early age, but I was largely left on my own, to live my childhood with minimal parental oversight or involvement, as were most kids after World War II. Parents lived their adult lives and kids lived their young lives, with little overlap between the two groups. I built many things on my own, including boats, docks, and furniture, and learned new skills “by doing,” building self-reliance in the process. I didn’t let lack of information stand in the way of moving forward. If I didn’t get it right on my first try, I’d learn from my mistakes and try again.

This carried through to my engineering education, focusing on mathematical modeling applied to numerical weather forecasting in my bachelor’s and master’s degrees at the University of Manitoba and PhD at Lehigh University in Bethlehem, Pennsylvania. My mathematical modeling continued into my first full-time job after my PhD at Defence Research Establishment Suffield in Alberta, modeling how the antennae on Canadian warships would respond to a blast wave from a nuclear event. I was on a scientific and research path with little oversight and considerable freedom.

In January 1977, I made a career change, leaving the security of a scientific career for the uncertainty of a business career. I was hired by Gerry Law, President of E.H. Price Ltd., to run its contracting business. At that time, E.H. Price Ltd. had been manufacturing air distribution products for the past 15 years under license to Titus, a major US HVAC manufacturer. As well, E.H. Price Ltd. had sales offices in 12 Canadian cities and $12 million in sales annually. My dad started the company that bore his name in 1949, shortly after he returned from serving in the Royal Canadian Engineers in World War II. He retired in 1972, and Gerry Law served as President of the company from 1966 to 1986. As a student, I had summer jobs working in the factory, and in the summer of 1972, I was hired to design a manufacturing software system for the Winnipeg factory, a system architecture that is still in use today.

It became clear to me early on that business was to be my true calling. I loved the challenge, excitement, and uncertainty of business. With zero business training or knowledge when I joined the company, I had to persevere through the unknowns and challenges of every new initiative. This built my most valuable life skills that have served me so well in the long term. I truly learned by doing each year in my more than four-decade business career.

On the theme of learning by doing, I would like to reflect on four key years in my business career and illustrate the many lessons learned:

1977, my first full-time year, serving as Vice President Contracting
1992, 15 years later, our highest-risk year due to massive US losses coupled with the Canadian recession
2007, 15 years later, the first year our US sales exceeded US$100 million, just prior to the Great Recession of 2008 to 2010
2022, 15 years later, the first year our personal family holding company, Anvil, had sales exceeding $1 billion, 37 years after the incorporation of Anvil in 1985

1977—Trial by fire: Learning the hard way

Not yet 30 years old, I was responsible for two fledgling Canadian ceiling and interior-finishing contracting subsidiaries of E.H. Price Ltd.—Price Acme (in the west) and Price Tri Tile (in the east). Both companies were losing money. My job was to turn them around and make them profitable. I was naive and had no idea what a challenge this would be.

In the early months, I worked hard to land contracts and track the profitability of individual contracts, increase earnings, reduce the loss, and reach breakeven. On a project we were trying to land in Saskatoon, Saskatchewan, I read in the Western Construction News that the job was being awarded to our competitor. I felt strongly that this was wrong and, not knowing better, called up the Department of Supply and Services in Regina to find out if the contract had been awarded. The assistant told me it was on her boss’s desk for signing but was not signed yet. I asked her to ask her boss not to sign and give us a chance to install our mock-up in Saskatoon, to show why our product was superior. They agreed, so we went to Saskatoon with our products, built a mock-up, and had a session with them showing our product in comparison to our competitor’s product. They agreed ours was superior and awarded us the contract. It is amazing what can be done when you have no inhibitions and do not know the protocols of whom to call and whom not to call. By reaching out one last time, we were able to turn a loss into a win.

In the ensuing months, no matter how stringently we managed the material and labor costs of sale of each contract, the resulting gross profit added up for all contracts was never sufficient to cover our corporate overheads. We were a manufacturing company with large overheads dabbling in interior-finishing contracting, a specialized business for which we had no tribal knowledge. Many of our competitors were truck-and-ladder companies with many years of experience and low overheads, often with owners supervising major contracts or on the tools themselves. By late 1977, it was clear to me that we would never be profitable. Gerry Law agreed, and my next assignment was to do an orderly liquidation—in essence eliminating the job for which I had been hired.

We could have declared bankruptcy of our two subsidiary companies, but that would have been wrong, as it would have put the financial burden of our failure on our suppliers and customers, who had done nothing wrong. The responsible thing to do was to clean up our mess at no expense to others and be as fair as possible to exiting employees. It took a full year to complete all our contracts, which involved absorbing substantial losses on several big contracts, exiting long-term leases on a negotiated basis, and transferring as many employees as possible into new positions in the company or parting with fair severance when there was no alternative.

This was my first experience with terminating an employee. I will never forget the experience of meeting with our receptionist in the Toronto office and telling her that we had no position for her. She was in tears, and I tried my best to comfort her, including offering a generous severance. I learned the hard way of our responsibility to employees to keep the business viable, so as to “not break someone’s rice bowl,” a phrase I learned later in our Singapore start-up in 1985. Thereafter, for long-serving employees who were no longer successful in their jobs, I would keep them on for a finite period so they could look for a job while being employed, which was easier for them than being unemployed and looking for a job.

While winding down the contracting business, I began the development of a new family of architectural products—integrated ceiling, lighting, and air distribution products that we would manufacture ourselves. I began selling these systems to contractors, developers, and owners in major Canadian and American cities. I traveled extensively, learned the pros and cons of cold-calling, developed marketing materials on the fly (as we did not have a marketing person or capability), dealt with rejection, and turned naysayers into advocates. I learned that you need to truly understand your product’s strengths and weaknesses in comparison to your competitors’, and I enjoyed the uncertainty and challenge of cold calls.

I didn’t know what I didn’t know when I joined the company in 1977; however, thanks to the multitude and variety of assignments I had in the ensuing years in all facets of the company, I was well prepared nine years later, when Gerry Law appointed me President of E.H. Price Ltd. in 1986.

I’d like to share a few of the lessons I learned through this trial by fire:

There is immense value to diving into the most challenging and difficult problems the company is facing. You learn in a hurry!
Parting ways with team members or cleaning up a mess can and should be done gracefully and respectfully. Remember the Golden Rule.
Early in your career, it’s all about learning, not earning. You are building a foundation for the future.

1992—On the edge of a cliff: Into the US

Many factors contributed to 1992 being the highest-risk year in Anvil’s history: we entered the year at the top of our bank line of credit, losses from our US start-up in 1992 were far higher than expected, and Canada was deep in recession, resulting in a massive Q1 1992 loss from Canadian operations. It was a perfect storm—huge losses, at a scale comparable to our net worth (Anvil’s book value was $3.1 million at that time)—and we had no obvious access to capital. What precipitated this crisis, and how did we survive this most challenging of times?

Our US start-up was a very high-risk undertaking. We had no brand awareness in the US, no employees, and a limited and uncompetitive product offering. We were up against 10 established competitors, five of which were of scale with the other five being legacy brands in decline or small niche players. The market leader, Titus, was part of a publicly traded company that owned five air distribution brands, with consolidated manufacturing and deep pockets. In 1989, we started out as 11th in the US market and had aspirations plus a plan to become the market leader in time.

Our weak financial state in the lead-up to 1992 was in part due to US start-up losses totaling $4.2 million in the previous three years, plus share redemptions by the company totaling $6.8 million over the previous four years (with a further $2.5 million to be paid out in the next six years). I purchased Gerry Law’s shares as well as other retiring shareholders’ shares. Still other shareholders had their shares redeemed by the company because they were not comfortable with the risk of new leadership, our losing the Titus license, and the beginning of an expensive US start-up. As a result, our operating line was at the top of our line of credit.

The enormous expense of preparing our company to be successful in the US, plus the losses we had from our fledgling US plant, proved to be far greater than expected. In 1987 and 1988, we went to market in the US with our Canadian-built HVAC products until such a time that we could commission a US manufacturing facility, which we knew would be essential if we were to give our customers the superior service that they deserved. We planned to sell through independent representatives (reps), who we initially met by attending industry conferences (ASHRAE shows). Over time, we made connections and appointed 25 reps in our first two years. Most were small to mid-sized rep firms, hungry and motivated to grow, with fire in their bellies, rather than the large, successful rep firms that did not need the income and had no financial incentive to do pioneer work for our Price brand. We learned early on that our high-quality Canadian products were not competitive in the US, and we would never be of scale until we systematically reengineered and retooled all our commodity products. Also, the importance of having a US manufacturing facility to properly serve our customers grew greater every day—we desperately needed a US manufacturing facility.

Putting down roots: A home for Price

Our site-selection study to determine the location of our first US factory began in 1987. We knew from our Southeast Asia start-up in the early 1980s that the best way to enter a new market is with rented premises, so as to learn the tribal knowledge needed to get the factory exactly right before designing our own facility. It took us two years to complete this study, and by late 1988, we had three candidate cities for our factory: Atlanta, Georgia; Lincoln, Nebraska; and Sioux Falls, South Dakota. Late in 1988, we learned that United Airflow, an HVAC manufacturer in Atlanta, was failing. In January 1989, we were fortunate to be able to acquire its used assets and rent manufacturing premises at a discount, including an operational paint line. Prior to United Airflow, Trox USA had a two-year run in this same facility and also failed. We were the third HVAC manufacturer to attempt to penetrate the US market at these premises in Atlanta, and I was determined not to strike out!

The reengineering and retooling of all our commodity HVAC products proved to be a far more expensive and time-consuming process than we ever expected. We knew that to be successful and a major player in the US market, we had to be competitive in the small and mid-sized job market, as we learned from our start-up in Singapore that you can’t support a factory on only large jobs. This is because there will always be a gap between large jobs with the factory underutilized, losing money at a furious pace. It is better to have a steady flow of small and medium-sized jobs that enables a factory to be efficient and viable and to occasionally overlay the odd large job as a bonus.

Our Canadian products were both high quality and expensive. However, there is no reason why a product can’t be both competitive and of first-class quality. With literally hundreds of product families to be reengineered, our challenge was to decide where to draw the line in our value analysis and reengineering efforts and which products to reengineer first. Prior to 1992, we had successfully reengineered 18 major product families, and we had eight additional product-development projects scheduled for completion in 1992. We addressed the game-changing products first—those with the greatest chance of having top-line sales growth coupled with gross profit improvement. In other words, the priority was products that would best drive incremental earnings greater than incremental overhead so as to reduce our loss and get us to breakeven faster, before we ran out of money to cover our losses.

It was essential that we also grow our sales as rapidly as possible to reduce our loss run rate and get to breakeven sooner rather than later. To this end, we studied our competitors and identified their strengths and weaknesses so we could focus our efforts where they were most vulnerable. We focused on the “hinterland”—small to mid-sized markets where our competitors were less likely to notice our presence and drive pricing down to keep us out of the market. We didn’t compete seriously in the large US cities until we were entrenched in the hinterland. We focused our efforts where our chances were best, below the radar of our big competitors, as the goal was to win, not to be noticed.

We also put a big effort into communicating with our customers, to learn their highest priorities and needs and to enable their growth and success. We felt that if we could help them succeed to the highest level, we as their supplier would in turn prosper. Our focus was on their prosperity, not on our own. In addition to meeting with customers at conferences and in their offices, we met with a small group of our best customers, which we called our Rep Council, once each year, during which we presented our plans for the next year and asked them to critique our plan and present their own major priorities, action items, and needs as they saw them, to enable them to prosper and grow. Each year, their top action items became our top goals to achieve. Our record of doing this was excellent right from the outset, as in our November 1991 Rep Council, the reps’ number-one ask was for us to entirely redo our catalog, a three-inch-thick binder filled with brochures on our various product families, and instead make it a concise “phone book” type of catalog. We agreed and promised to complete this in one year. At our November 1992 Rep Council, we presented our new catalog in draft form, ready to go to the printers.

Start-up tribulations: Powering through

Start-ups are expensive and start-up losses are nearly impossible to predict, both in scale and in the length of time to reach breakeven. In 1989, I predicted our total US start-up losses over two years (1989 and 1990) would be $1.3 million and we would break even in 1991. Instead, our losses were over seven years (1989 to 1995) and added up to $8 million, and we had a small profit in 1996, our eighth year in the US. In 1992, our US start-up loss alone was $1.6 million, down from the loss in 1991 of $1.9 million, but still an enormous amount given it was about one-half of Anvil’s $3.1 million book value at that time. Start-ups are not for the faint of heart.

We planned to offset our 1992 US start-up loss of $1.6 million with earnings from Canadian operations. However, in Canada, non-residential construction starts were in serious decline, from a peak of 170 million square feet in 1987 to 60 million square feet in 1993, a 60-year low. As a result, our Canadian sales declined from $43 million in 1989 to $39 million in 1991. Although 1991 sales were down by 10%, market-share gains along with various belt-tightening measures kept our overhead in step with reduced sales, resulting in a reduced but acceptable bottom line for the year as it came to a close.

Early in 1992, we were surprised at the rapidity of the decline in our Canadian sales, dropping a further 26% below our 1991 pace. We learned from our Singapore start-up how important it was to get timely monthly financial reports, within 10 days of month end, so as to get an early read on changing fortunes and be able to respond decisively in a crisis. By early February 1992, we knew our January loss was $225,000 and felt we needed one more month of results to confirm this trend. By early March, our two-month loss was $460,000, which at that run rate would result in a $2.5 million loss for the year, game-changing and possibly career ending given the magnitude of our US losses. Things had gone from bad to worse.

Radical belt-tightening measures were launched. We scaled back our Winnipeg hourly workforce from the 190 workers a year earlier to 104 workers at the end of Q1 1992. As you would expect, there was great distress and concern for the future within both our hourly and salaried workforces, and this concern precipitated a strike by our hourly workers. After the strike, we reduced salaried and hourly wages, encouraged early retirements, postponed fringe benefits and company pension contributions, had layoffs and work share, and merged staff departments with operating departments to reduce the number of managerial layers. Many engineers were relocated back to the shop floor to work alongside those that they supported (rather than residing at head office), and there was no discretionary spending. The end result was that we posted a substantial $633,000 loss in Q1 1992, followed by a much-reduced loss of $71,000 in Q2 1992, and profits in Q3 1992 and Q4 1992 that were sufficient to cover losses in the first half of the year. We ended the year slightly above breakeven, thanks to a timely intervention in March 1992 and the support of our employees and customers (who delivered some much-appreciated growth in sales late in the year).

We still needed $1.6 million to cover our 1992 US losses. To this end, in July 1992, I submitted an R&D tax credit application to Revenue Canada for our R&D qualifying expenses from the calendar years 1988 to 1991. We applied in July 1992, and to my great delight, our application was approved. We received $1,035,000 late in 1992, in time to save the year. This result, plus an income tax recovery of $453,000 and Alcan-Price earnings of $339,000, was sufficient to cover our 1992 US start-up losses, so we made it through a most challenging year relatively intact and ready to begin the fifth year in our US start-up.

Leaders, take note: Lessons for start-ups

From our manufacturing start-ups in Singapore and Malaysia in the 1980s, our US start-up in the late 1980s and 1990s, and countless product launches over the past 40 years in industries that were entirely new to us, we learned that a start-up can be “predictive” or “deterministic,” meaning there are well-defined steps and actions that, if done at a fast enough pace, can achieve success (breakeven) before you run out of steam (either “will” or “money”). In summary, these steps include the following:

Learn from and profile the competition. We started many of our US product redesigns from our competitors’ best products and made as many incremental improvements as we could from there. Respect and learn from your competitors.
Listen to and learn from your customers. We served them to the best of our ability, and when they won, so did we; their greatest needs were our top goals each year.
Know your key drivers for success. This begins with quantifying your current reality without false ego and then identifying the key metrics for success. In our US start-up, driving top-line sales growth and incremental GP in key product lines, greater than the incremental overhead to achieve this, were two of our key drivers for success.
Trend is everything. It is the trend of your key metrics that counts, not the absolute value of the metrics. For example, in our US start-up, a key product, PDF, had sales increasing at 30% per year from 1990 to 1996, with GP percent increasing from −15% in 1990 to +30% by 1996.
Win where your chances are best. Our hinterland strategy was to focus on smaller, underserved markets, below the radar of our big competitors. The goal is to win, not to be noticed.
Focus: break an enormous task into bite-sized pieces. When we entered the US in the early 1990s, we were nonexistent in every market, and the scope of the task ahead looked immense. In order to break it down to one step at a time, we chose three cities that we wanted to launch a solid Price rep in and focused on each city, one by one, until all three cities were secured. We then chose another three cities and dealt with them one by one. By breaking the enormous US market down to three cities at a time, we reduced an immense task into bite-sized pieces that we could get our head around and deal with systematically.
Fire, correct your aim, fire again. We did not let lack of information stand in the way of our moving forward. Lacking perfect information, we made an educated guess and moved forward rather than delaying action.
Operate in real time. Short lead times were essential to give our US customers the extremely good service they deserved. Fulfilling urgent customer needs instantly required the plant to be “current” at worst and “ahead” at the best of times. This meant the backlog had to be kept at a minimum all the time. We operated on the premise that “backlog is bad.” It’s not the big that eat the small; rather, it’s the fast that eat the slow! A sense of urgency and immediacy is key.
Review financials in real time. We reviewed financials within 10 days of month end so that a crisis or sudden turn for the worse in sales, overhead, or earnings was detected as early as possible. We could then implement a recovery plan before the damage built to a level that would sink the company. Know your reality, and deal with the cold hard facts.
Communication is key. Through our US start-up period of great and rapid change, from being a Canadian-only company to entering the massive US market, with weak financials and great risk, communication to employees and stakeholders, like the banks, was key to keeping our team and backers onside. Each year, from 1987 on, I documented our current reality in writing, without bias or embellishment (straight goods only). From this, I created a presentation, using slides in the early days and PowerPoints in later years, and took the time to perfect the message before delivering it to employees, customers, bankers, auditors, lawyers, and other outside interested parties. This process of putting in writing our current reality and plans going forward each year, in great detail, served me well as a planning tool. It also served to keep everyone in the loop on our current reality and plan for the coming year through a much-extended perilous time in our company’s history. We do this to this day.

2007—When visions comes true: Service wins

We were excited to see our US sales in 2007 come in at $109 million, significantly up from $50 million in 2003, positioning us as number two in the US HVAC air distribution market, not too far behind Titus, who was number one at that time (and number one since the mid-1980s). Remarkably, we delivered this significant growth while maintaining our extreme focus on customer service—very short lead times, most products available on two-day or one-week quick ship, and on-times greater than 95%, often at 99%.

How did we more than double our sales in only four years, with no deterioration in service metrics? The answer is threefold: (1) we invested in the factory in advance of demand so as to be able to increase sales without undue strain; (2) we significantly strengthened our US rep force, which increased our market share in our legacy air distribution products; and (3) we launched countless new engineered products, which provided additional sales growth.

In the 1990s, our sales grew at 30% per year compounded, and we invested in production capacity ahead of demand as best we could to maintain our service metrics while we grew. We had a batch-and-queue old-school shop, making it difficult to support significant sales growth without impacting our customer service. This all changed when Marv DeHart, a world-class expert on lean manufacturing, joined our company in 1999. He brought to us his wisdom and experience in lean manufacturing, continuous improvement, root cause analysis, and single-piece flow lines, which when properly tooled and configured can support very high growth rates without any deterioration in service. In the years 2000 to 2003, under Marv’s leadership, our shop was completely reconfigured using lean manufacturing and flow lines, a significant investment that enabled the more than doubling of our sales to over $100 million in four years.

The significant strengthening of our US rep force was led by Chuck Fraley, an accomplished and proven senior sales executive who joined our company in 1997. Chuck had an excellent reputation in our industry and good relationships with many rep firms, and under his leadership, we managed to significantly strengthen our rep force. Many of our long-standing reps grew their way to number one in their markets, and we made changes where necessary to new reps that were or became number one in due course. This strengthening of our rep force, coupled with our factories delivering quality products and excellent service, resulted in a significant increase in the market share of our legacy products, resulting in sales over $100 million in 2007.

The final factor contributing to our rapid increase in sales was incremental sales from our launch of countless new engineered products. Since our US start-up was now profitable, we could shift our focus from survival in the 1990s to growth in the 2000s. We began a massive and relentless product-development effort that, from 1997 to 2007, produced over 140 entirely new products or reengineered legacy products, including products redesigned for manufacturability.

Alf Dyck, our chief engineer and a world-class expert on air distribution, and I went to Germany in 2002 to attend the ISH conference, a major event held every two years. This visit, plus tours of some European HVAC manufacturers, brought to our attention the many quality air distribution products popular there. We created our own version of these products, modified to suit the unique needs and practices in the US. As well, we expanded Price Research Center North, from three research chambers in 1999 to eight chambers in 2007, to get the science right for our new families of products. We developed high-speed R&D techniques by applying lean manufacturing principles to R&D, and we automated our new labs so that testing could be done 24 hours a day, seven days a week. By so doing, lab data was converted to catalog pages in record time.

Joe Cyr, an accomplished and senior operations executive, joined our company in 2004 and played a strategic role thereafter in leading many of our growth initiatives. I remember our decision in late 2004 to go into the noise control and silencer business. We needed a sound lab, and not knowing the cost, Joe and I gave our senior engineers a one-page authorization to design and build a sound lab for $1 million. They did so, and three years later, we had a world-class sound lab at a cost greater than $4 million, complete with high-speed R&D protocols that delivered an entire family of sound attenuators and silencers, that allowed us to go to market with a complete family of products. It cost us far more than we expected, but as always, we learned by doing and became experts in this industry that was new for us. Today we are a market leader in the noise control industry.

Completing critical tasks: Rapid completion for rapid growth

This first decade of the 2000s was a period of rapid completion of critical tasks, whether it be production challenges in the factories, new-product development, customer-facing software, or other strategic start-ups and projects. Some techniques we used to proceed at a rapid pace were the following:

Annual operational plan. Each year, we worked to a detailed annual plan complete with concrete action items, champions, and quarterly reviews. At year-end, we would do a post mortem to document accomplishments and lessons learned. We would repeat the process the next year and prepare an even better operational plan. We were not fussed about three- and five-year plans because circumstances change so fast and we didn’t find they were of value. We still feel this way.
Thrive on detail. All our leaders thoroughly understood every detail that could influence a successful outcome. It’s said that “the devil is in the details.” I think that’s where the gold is!
Build an ever-stronger team. When we could afford it, and as opportunities to upgrade our leadership came our way, we built an ever-stronger team. We continue to do so.
Home Run meetings. We found that game-changing objectives can be best achieved in a team environment that we call Home Run meetings. Key team members, including senior management, met weekly, monthly, or quarterly to track performance and deal with roadblocks in real time to ensure completion on schedule. Everyone had an equal say in these meetings; there was no hierarchy. At our peak, I was but one of many on 15 concurrent Home Run meetings, some meeting weekly but most meeting on a monthly or quarterly schedule.
Do the most difficult first. I strive to do the most strategic, difficult, or distasteful tasks first, leaving the more enjoyable tasks for later, as time allows (many of which never get addressed, because they probably weren’t that important).

2022—Following the Price Way: Reaching $1 billion

To everyone’s surprise, including mine, our sales in 2022 increased 40% in one year and passed through $1 billion. This was not a goal, as our focus each year was solely on building foundation for growth to maintain our history of doubling our sales every seven to eight years. Suddenly, we found ourselves passing through a huge milestone in sales, so it’s worth reflecting on how this came to pass.

The significant growth in our HVAC business over the past 15 years since 2008 was fueled by our legacy (pre-2000) products gaining another 10% or more in market share, plus our HVAC start-ups from the early 2000s being now well past their incubation stage and in their high-growth stage. In addition, we continued our relentless product-development effort from the early 2000s and produced over 520 entirely new or reengineered products in the 15 years from 2008 to 2022. In support of this massive product-development effort, we added eight new research chambers to Price Research Center North, increasing from eight chambers and 12,000 square feet in 2007 to 16 chambers and 25,000 square feet in 2015.

APEL, our aluminum-extrusion business, also grew massively in the last 15 years. APEL expanded from a one press extrusion operation in the 1990s to a two-press operation in 2001. The decade of 2001 to 2010 was the period during which APEL solidified its foundation, upgrading both extrusion presses as well as its paint and anodizing lines. By 2010, APEL was ready to grow. APEL commissioned a new manufacturing facility with a third press in Oregon in 2010, followed by a fourth press in 2014 and a fifth press in 2018. As a five-press operation in 2022 complete with state-of-the-art finishing and anodizing, sales increased sevenfold in the 15 years since 2007. Three years ago, APEL began a major expansion, building a 330,000-square-foot factory in Phoenix, Arizona, to house three additional extrusion presses plus anodizing and a vertical paint line. This added capacity is expected to double APEL’s business by 2028.

Our window business, AROW Global, also grew massively in the past 15 years by significantly increasing its market share in the bus-window market, plus by adding driver-protection products and new window systems for off-highway vehicles and service vehicles. As a result, its sales increased fourfold in the 15 years since 2007. To better serve its customers, AROW vertically integrated in glass fabrication, adding tempering to its in-house manufacturing capabilities, to give customers the shortest possible lead time.

Investing in service has driven our growth—this is what we call building foundation. We invest in people, new products, laboratories, factories, manufacturing, automation, software, marketing, and teaching aids that help us to serve our customers to a level far better than that of any of our competitors. We do not invest for our own self-interest or to increase our annual earnings; rather, we invest in the customers’ self-interest, which we call “return on service,” or ROS. If we get the foundation right in delivering good customer service, our earnings on a long-term basis tend to take care of themselves, even if they are occasionally low or nonexistent as we grind through expensive start-ups.

We are builders by nature. “Greenfield” is our preferred method of growth. Labs are built to get the science right, new products are designed, manufacturing facilities are commissioned, and production lines are tuned to increase capacity and margin to be sustainable. Service fuels our growth and takes us to market dominance in time. We develop new products in any industry or area we think we are capable of mastering. New products are nurtured through the high-loss incubation stage until they go through an inflection point and enter the most enjoyable high-growth stage, at some point becoming self-funding. Our decision to proceed is based not on whether the economics of the industry are healthy or not, but only on how the investment will help us to better serve our customers. We keep the bulk of our earnings in the company, to cover start-up losses, and do not invest any faster than our ability to secure funds from banks at best-customer rates.

Over the past 20 years, we have vertically integrated our manufacturing to build for ourselves products that might be otherwise available from a third-party supplier. By vertically integrating our manufacturing, we can guarantee the quality of our end product and provide very short lead times. We have become a virtual one-stop shop for the products we supply and, in fact, are our own supply chain. Examples include electronic circuit boards, hydronic coils, aluminum extrusions, metal 199 Afterword

fabrication, finishing, anodizing, specialized machines, tools and dies, glass fabrication and tempering, software, and marketing, to name a few.

We are taught that failure is the best teacher, but you learn a lot through success as well. During this period of remarkable growth and success, we learned several lessons:

Growth is fundamental to success, and to grow you need to keep investing ahead of the curve and keep ratcheting up the scale and pace of investment.
Growth creates opportunity and is the best way to attract and keep top people.
Doing new things and forging new ground is inherently risky—but necessary. Be prepared for things to take longer and take more investment than you thought at the outset.
Giving back is the morally right thing to do. I’ve always known this, and Barb and I have always followed this motto. Fortunately, the more success you have, the more you grow and the more you can give back.

Final thoughts: Legacy is all that matters

In 1987, shortly after I was appointed President, I developed eight corporate goals, complete with cartoons illustrating the intent of each goal, and communicated them in multiple sessions to all salaried and hourly employees using transparencies that year and slideshows in 1988 and later. The eight goals described how we would operate and what we hoped to achieve. The headings were market share, delivery, quality, customer focus, product innovation, maximum value at minimum cost, financial health, and participative management.

To keep these goals front of mind, we had T-shirts made for employees with key goals imprinted along with our current status. Over time, these original goals evolved into the 13 Tenets of the Price Way, a guiding document of how we conduct our business. This may not work for everyone, but it surely has worked for us. The Tenets and stories that precede this chapter emerged from the road I followed and what we learned as a team along the way.

Our business can be described as a “meritocracy with heart.” Yes, we focus on extreme customer service and not on our own self-interest; however, we always act in a gentle and principled way, treating others as we would like to be treated ourselves. By so doing, we will leave a legacy we can be proud of, no matter the outcome, and we will celebrate because we did it the right way. How we conduct ourselves is more important than whether we win or lose. A life well lived is one in which those touched by your actions are better off for having known you. We choose to have our business be a positive force in the community, achieving a “greater good” outcome favorable to employees, customers, suppliers, and the community at large.

The power to fulfill our dream is within each of us. We alone have the responsibility to shape our lives. We are the ones pushing ourselves forward, and we are optimistic that the future will be better than the past. We believe in the motto “Go big or go home.”