The Empowerment Zone
When Graniterock Company won the prestigious Malcolm Baldrige National Quality Award in 1992, a dozen people from all levels of the company were on hand to accept the award.
"It was a cross-section of real Graniterock people, not just executives," says Ricki Mancebo, who has worked as a truck driver for the Watsonville, Calif.-based construction material supplier and heavy engineering contractor for 24 years. "We had mixer truck drivers, someone from accounting, another man from technical services, and myself, a truck driver. I can't begin to tell you what that meant to me."
For Mancebo that night embodied how far Graniterock had come since turning itself "upside down" to create a more employee-focused company. Just a few years before, the organization had been like most other American companies, with power and decision making centralized in just a few hands. Two vice presidents were in charge of approving almost every action or initiative, all the way down to what kind of hubcaps to buy.
"The company was really weighted down by that structure," says Bruce Woolpert, Graniterock president and CEO. Starting in 1988, he and others began taking a hard look at how the company operated and found that not only was the centralized makeup cumbersome, it also undermined its employees at every turn. "We were consistently giving the message that the company doesn't quite trust you, that you're not ready for that kind of responsibility."
Realizing that simply decentralizing decision-making wasn't enough, Graniterock has established the principle of self-leadership/job ownership. Simply put, employees are responsible for doing plus improving their own work. Today, that principle helps employees provide the highest levels of quality and service and maintain a loyal customer base. That combination has been crucial to protecting Graniterock against the economy's downdraft. "If the economy turns down, we turn down a little less because of our close relationships with customers," Woolpert says.
Achieving an entire culture change happened gradually, taking years of refining and reinforcing the practice of self-leadership in big ways and small. "A lot of it is building trust, letting people know this is not a trick, this is real," Woolpert says. "In a lot of workplaces there's an adult-child relationship at work. We've gotten rid of that."
For example, instead of having a quality department that measures how employees are doing, individuals track their own results. To help employees measure their own progress on the job while developing their long-term careers, Graniterock provides them with metrics and training. Based on factors that customers say are most important – such as on-time delivery or ease of ordering – performance metrics are communicated frequently throughout the company. Individual employees and entire departments are responsible for identifying how to improve each measure.
"We create a composite best competitor, then we want to be 10 percent better than that," Woolpert says. "We want to be as good as Nordstrom in its returns (policy), but we want to be as on time in delivery as Federal Express."
Attesting to the collective power of 797 employees constantly looking for ways to improve work and company, Graniterock has landed on Fortune magazine's list of "100 Best Companies to Work For" the last four years in a row. The company has won multiple industry, community and national awards each year since 1990 for quality and service.
The culture overhaul has helped create bonds throughout the company. "There used to be a real differentiation between the salaried and hourly (nonunion and union) workers, like only salaried people partied for the Christmas party," Mancebo says. "Now, we celebrate together – not just company parties, but team accomplishments."
Along with enabling employees the freedom to make their own decisions – and their own mistakes – Graniterock provides the training support they need to make those decisions effectively. "All of our human resource systems are organized around helping people make their own job decisions and career decisions," Woolpert says.
Today, "Graniterock University" provides an entire curriculum of classes, from product training to building computer skills to management workshops. In 2001, the average employee put in 43 hours of optional training in addition to mandatory safety classes. Unlike years past, when the company would assign employees to certain training programs, individuals are now responsible for creating their own professional development plans and taking the classes to reach those goals.
The company pays $1,800 per employee in training costs, but it gets twice its return on investment in terms of increased productivity and reduced product rejects, Woolpert says. Customer complaint costs are less than 0.2 percent of sales, compared to an industry average of close to 2 percent, he notes. Improved safety has cut worker's compensation insurance costs to about half of the state average.
The training programs also have generated some surprises and produced interesting Graniterock responses. For example, when the company discovered that several of its employees were dyslexic, it brought in a special instructor to work with them. After going through the program, one participant was able to write out a check for the first time in his life. It was to his grandson. "When you think about loyalty to an organization, loyalty like that goes far beyond a paycheck," Mancebo says.
Company: Graniterock Company
Web site: www.graniterock.com
Industry: Construction material supplier/Heavy engineering contractor
Location: Watsonville, Calif.
Number of employees: 797
Sales: N/A
