This century-old quarry has learned something about dealing with change

On a squally Sunday night in mid-February, some 1,600 people hurtle in from the rain, settling themselves down for dinner in the echoey, hangarlike Esplanade Ballroom in San Francisco's Moscone Center. Round tables that seat 10 are elegantly laid with white linen, heavy silverware, tapered candles, and delicate orchid centerpieces. And the crowd's standard workaday wardrobe -- hard hats, scuffed boots, well-worn jeans, and chambray shirts -- has metamorphosed for this one night into the classic accoutrements of formal dress: black tuxes and bow ties, sparkling earrings and sequined gowns. It's a big night, after all: the 100th-anniversary gala thrown by Graniterock. The company has been in the ancient and unimaginably gritty business of quarrying and crushing rock ever since Valentine's Day, 1900.

CEO Bruce Woolpert, grandson of the company's founder, takes the stage to extend his personal welcome. He speaks of the special importance of this centennial, singling out for special attention the woman who led the company during the 1950s and 1960s and again in the 1980s: his mother, Betsy Woolpert. Then, as the Monterey County Symphony Orchestra floods the room with the national anthem, everybody stands and sings, hands over hearts.

Over the past hundred years Graniterock has learned a little something about dealing with radical change, especially the kind that's driven by new technologies. You think we're in a business revolution now, thanks to digital technology? Imagine what it was like to deal with the lightning-fast adoption of such technologies as the horseless carriage, radio, television, air travel, and the steel-framed skyscraper. Not to mention vast social changes, from the labor crises of the early 20th century to universal suffrage and the increasing role of women in the workforce. Through innovation and ambition, Graniterock has seen and absorbed it all without changing its basic function: digging rock from the ground. It is also a company with institutional memory, with a lore of its own, so it has a special perspective on what really changes when revolutions occur.

At the turn of the last century, a young engineer and MIT graduate named Arthur R. Wilson, together with several partners, bought a granite-rich 27-acre parcel. Logan Quarry was in central California's Rancho Las Aromitas y Agua Caliente, one of many land grants made by the Spanish government during its rule. (In 1988, Logan would be renamed the Arthur R. Wilson Quarry, in honor of its founder.) The purchase price was $10,000 in gold coins, a sum Wilson borrowed from his cousin, using a life-insurance policy as collateral. On February 14, 1900, Granite Rock Co. was born. "Under California law," Bruce Woolpert explains, "you had to declare how long your company would last when you incorporated, and Wilson thought, 'Fifty years.' Nobody said stuff like that then. Fifty years was longer than the average person's life expectancy in 1900. Men died at 46 and women at 48. So Wilson saw beyond a lifetime."

Wilson was a hands-on kind of guy. As company superintendent, he hitched up a two-mule team for his daily trek from the office in downtown Watsonville to the quarry. A.R., as he was called, had a thing for applying scientific principles to practical problems. His timing was excellent: there he stood, at the dawn of the industrial era, in good old California, the gold-rush state, a state on the make. The Southern Pacific Railroad had already relentlessly tentacled its way south, an expansion that sparked insatiable demand for rail-bed ballast and, a year or two later, for high-quality building materials for roads and structures. Wilson and his new company would produce a lot of those materials, construct buildings, and lay granite-enriched concrete to make roads, literally paving the way for the boom times to come.

Advances in technology and materials over the past couple of decades have spectacularly altered Graniterock's business but never its primary business focus. The company has confronted all manner of upheavals and catastrophes, some of them real Old Testament­level disasters: wars, depressions, earthquakes, newfangled machinery, stock-market plunges, and bigger competitors bent on stealing its market. Survival has done wonders for the company's confidence. Who's afraid of a little economic upheaval when your quarry sits adjacent to the fabled San Andreas Fault, the most active quake zone in California? But there's a bright side: the ground shakes enough to prefracture rock, saving Graniterock 50¢ a ton in excavation costs.

Granite is a particularly adamantine igneous rock composed mostly of feldspar and quartz. The infamously stubborn strength of the stuff makes it a superlative building material, nearly impossible for anything other than Mother Nature to fracture. Yet through the beginning of the 20th century, it was muscle and muscle alone that dislodged 175 tons of rock every day at Wilson's quarry. Working in 10-hour shifts, tough men pummeled the craggy quarry face with 20-pound sledgehammers, then shoveled the shattered rock onto pitchforks, and finally dumped it into flat railcars. Quarrymen could produce rock in only two sizes, known as six-inch-plus (bigger than six inches) and six-inch-minus (smaller than six inches).

In 1903, seeking to offer high-quality rock in a wider range of sizes, Wilson bought a new steam-powered No. 3 McCully crusher, a move that had the transforming power of fire. The device eased exhausting physical labor, produced higher-quality rock in a greater variety of sizes, and boosted output to 20 tons an hour. A No. 5 McCully followed the next year, and production shot up to 55 tons an hour. The machine's output was efficient, uniform, and reliable, just as it should be.

As a tool that shaped a company's destiny, the McCully was supremely important because it took over tedious, punishing work. It was a technological revolution in the best sense, in that it freed workers to use a new tool -- their brains -- to solve problems and imagine new ways to deliver what customers wanted. Wilson had no patience with a company filled with rock-pounding drones. He wanted his workers to participate in improving their work. The crusher authorized them to think on company time, a genuinely revolutionary idea at the time.

Machines, as Wilson knew, are really good when it comes to production efficiencies, but there's no way a machine is going to possess the flexibility or tactical imagination that people provide. That technology should support people, not replace them, is one lesson Graniterock is able to apply even now, as it transitions into the new economy.

Graniterock has undergone several major changes during the past 15 years. The first was a shift in leadership, from parents to sons, in 1987. A new generation took the helm and began to build an infrastructure to support changes yet to come. The second was extensive computerization; the third, a $16-million overhaul of the quarry, completed in 1990; and the fourth, a new commitment to quality.

Those management shifts occurred over a background of decades of rapid operational changes. In 1963, Graniterock bought its very first computer, a giant IBM System 3. It had some problems that were particular to that stage of computer technology. Termites chowed down on the punch cards, grossing out the office workers and thwarting data processing for a little while.

Later, when a faraway asphalt plant failed, Graniterock decided to keep new plants close to major construction sites, a big competitive advantage. Nearness facilitated speed, better quality (blacktop goes bad faster than a fresh croissant), and customized service, everything the company was aiming for. By now it was understood that the rock itself was only part of what the company sold.

By 1980 the active face of the quarry had receded so far from the primary crusher that transporting the now larger volumes to the processing plant became a big problem. So the company bought the world's largest mobile crusher, a colossal contraption designed by Krupp of West Germany and Graniterock's own engineering team. Try to conjure a coffee-bean grinder on steroids mounted on 10-foot Goodyears -- tires so humongous, and yet familiar looking, that the sight of them is totally disorienting -- and you'll come close to what the locals liked to call "La Machine."

It was a long way from that McCully No. 3. The crusher could roll to any spot on the quarry face and chomp up to 3,000 tons every hour. At the face a ghastly sounding gizmo known as a "scalping grizzly" automatically separated larger rocks from small ones, and then La Machine took over, churning the rock into useful sizes and ferrying it down conveyor belts. The innovation gave Graniterock the one competitive advantage it really needed at the time: speed.

In the years to come, as the world grew increasingly connected, customers everywhere expected focused, convenient service -- and self-service, whenever possible. At Graniterock that meant that customers wanted constant access to the quarry. They wanted to pick up their truckloads early or late, even in the middle of the night.

So Graniterock developed a one-of-a-kind automatic-loading system called GraniteXpress. Based on ATM technology, it provided truck drivers with wallet-sized cards that they would swipe through a machine. The drivers would then pull into an overhead-bin lane and tug on a rope, which would trigger the system to load a precise amount of rock directly into the trucks. The company has recently replaced the sleek smart cards with SmartPass-like radio-frequency tags mounted on the driver's side door of customers' rigs -- the same technology that's rubbing out the need for tollbooth stops on California's clogged roads and bridges. You just whoosh on through. The whole shebang is a perfect example of how a century-old company pursuing a centuries-old trade can adopt technological innovations to improve processes.

It's the morning after the centennial celebration, and everybody's back in the Esplanade. Graniterock has put together an all-day educational program, a smorgasbord of 29 seminars with titles like "The Future of Road Building in Northern California," "Steel: The New Stud," "Building Your Business with E-Commerce," and "Selling Techniques for the Next 100 Years." Last night was for looking back and cutting loose. Today is for talking about this new economy of ours and Graniterock's place in it.

The company's whole approach to dealing with change is to examine it thoughtfully before taking any action. Woolpert explains that concept by illustrating his Rubber-Band Theory of Leadership. Holding out his hands with the palms facing each other, he loops a rubber band around his index fingers. As he pulls one hand forward, the elastic prevents the other hand from falling too far behind. "When it comes to changing something," he explains, "always concentrate on the people who'll advance. Don't waste your energy on the ones who don't buy in, because they'll only move forward when the front-runners do. Don't worry about the gap. Coach the top, and the bottom will spring up."

One of the biggest challenges Graniterock has faced has been dealing with the influx of female workers. Women have worked at the quarry since 1922 -- the first, Pearl Sallows, was weighmaster on the truck scales -- but a scant few drove rigs during the rest of the century. Toward the end of the 1970s, the company hired its first two women drivers. One was Ricki Mancebo, who says she started driving a truck "because my dad said I couldn't." She's been driving ever since.

In 1996 a companywide survey revealed that 80% of the employees favored hiring more female drivers at Graniterock. Driving-school tuition was about $3,000 a student, so the company designed its own eight-week course called the Women's Driving Program. Neophytes learn how to operate the mixer and line trucks that the company uses and, if they complete the program successfully, apply for a commercial license. "Some of our current drivers volunteered to act as mentor-trainers, and they managed the whole experience for the trainees," Woolpert says. "We paid each trainee $8 an hour to learn. Then they became candidates for jobs with Graniterock."

So far some 20 women have completed the program. One of the mentors, Bill Russell, a loose-jointed, quiet cowboy of a guy, plays down his part in the program but seems proud of it. "You just get on the horse, slap its butt, and you learn to ride," he says.

Ever since Wilson's day, the company has relied on the expertise of its workers. "This whole business revolves around talented people," says John Franich, vice-president at Graniterock and general manager of one of the company's fastest-growing divisions, called Pavex Construction Co. Pavex is based in Redwood City, right in the shadow of San Francisco International Airport, which, not coincidentally, is a big customer. The division Franich leads started out in 1988 as a two-person paving contractor that shared parking space with its neighbor, Divine Love, a church-music publisher. Pavex has since morphed into a full-fledged general-engineering contractor with more than 200 employees.

"As the world turns," Franich says, "new opportunities come up in other industries, so there's more competition for talent. There's not enough skilled labor, so we do a lot of training. We differentiate ourselves from other construction companies by offering more."

Terry Tuggey, head of Pavex's mammoth runway-construction project at the airport, says that "it's so easy to just collect a paycheck in this industry. That's why we're trying to get away from the free-agency thing. We want people to move with us to the next project, not just take off."

People in the construction business call those on-again, off-again types "boomers," fickle workers who sign on to one job and end up on another. Industry veterans say that the worst thing about hiring boomers is that it creates safety concerns. Transient workers often haven't had the training that permanent employees receive. To deal with the problem, at Pavex "every morning, every crew on every job huddles for 10 or 15 minutes," Franich says -- Hazard Awareness Meetings, they're called. "In other companies the superintendent shows you where to dig and tells you when to stop. Here you get the full picture, so you can think about it during the day. It's a much safer environment when everybody's informed." As an extra safety measure, new hires wear bright red hard hats, making it easier for supervisors to keep an eye on them.

"The tradespeople, the ones who go out and do the work, they're not going to be the ones who reap the benefits of the new economy," says Franich. "There are some people who were in our business and have migrated to be a part of a dot-com somewhere, so it's more of a challenge for us to keep really good people. At the same time, the dot-com mentality has created more business for us, because they're all building new buildings and demanding better roads."

Not that different from how it was a century ago.

Nancy K. Austin, a contributor to Inc., is the coauthor with Tom Peters of A Passion for Excellence.

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