The New Fabric of Success

Build the People, Build the Company

The verdant hills outside the city limits of Santiago de los Treinta Caballeros (Santiago of the Thirty Gentlemen) are lush with tropical growth and coffee plants. Closer to the city, and to Grupo M's headquarters, greenery gives way to dusty streets that are lined with squat, concrete buildings painted in garish pastels. Most buildings in the Dominican Republic are constructed from cement block in order to withstand hurricanes -- a practice that gives the city the hunkered-down look of a military bunker.

The Dominican Republic's economy is in an awkward stage between its fading agricultural history and its evolving industrialized future. The transition -- and the country's prosperity -- depends on education, but because the country is so poor, there's little of that to go around. "A big role that this company is playing in this country is that of a massive school. This company teaches people about punctuality, about following procedures, about teamwork. That's the way I see it," Capellán says. "Remember, this country comes from an agricultural base. If it's raining, nobody works. If it's windy, nobody works. If it's a cloudy or a dark day, that's the day you have to put the seed in the ground -- that's the day when people work. The other days, work is over by 10 AM, because the sun is too hot. We're going through a big change of that mentality, and that's what I consider this company -- a big school."

About four years ago, ??ngela Ogando, 30, an industrial engineer for Grupo M, spent six months in Israel with a half dozen other employees taking textile classes at the renowned Shenkar School of Engineering & Design. After that, they spent three months in a textile factory in China. Grupo M, which until that time had worked with garments made solely of woven fabric, had plans to develop a factory that would produce knit material. But the company needed to train a group of experts to understand the intricacies of the new fabric -- how it withstood washing and how it held dye -- as well as how factory workers should handle it during the sewing process.

Ogando and her colleagues returned from their travels and laid down the groundwork for Grupo M's Dominican Knits business. Today, that unit is thriving, and Capellán expects it eventually to account for 60% of the company's revenue. Ogando, an industrial engineer, was 26 at the time; the most senior person in the group was just 35. "For us to be sent abroad for such a period of time, and then to be given the responsibility to help lead such an important effort, would be unheard of at other companies," Ogando says. "This is a company that believes in investing in its young people. It believes in its workers and what we can do."

That dedication to training and to educational opportunities would be impressive enough in a place like Santiago, if it were limited to professional workers. But Grupo M aims to develop everyone. It offers free English classes and a six-month training program for all new sewing-machine operators that focuses on basic writing skills, and on personal health, safety, and community awareness, as well as on-the-job skills. A literacy program initiated in 1987 is no longer necessary for most Grupo M employees, since most of them can read now. So the company turned it over to a trade organization to which it belongs. The program serves 50,000 of that trade group's employees.

And the company's benefits extend well beyond education: Since most Dominicans don't own cars and lack public transportation, a fleet of buses shuttles many employees to and from work each day. Four day-care centers, one owned by Grupo M and another built on company-owned land, are available to employees' children at subsidized rates. The company runs two health clinics offering employees and their families free services, including dental and eye care. The company also sponsors a club that teaches prenatal care.

In a country where many communities are too poor to have organized sports, Grupo M sponsors several sports leagues, as well as children's clinics. Uniforms and equipment are purchased by Grupo M, and its teams play at a recreational facility built by the company that features a gargantuan, thatched-roof outdoor pavilion (available for employee weddings and family functions), full-size sports fields, and a scoreboard. The company spent almost a half-million pesos ($31,250 USD) on its sports program alone in 1999 and an additional half-million on training programs.

Arguably more important, Grupo M pays its sewing-machine operators roughly 1,000 Dominican pesos ($62.50 USD) a week -- well above the country's minimum wage of 555.5 pesos a week. Apparel makers operating elsewhere have lower labor costs: In Honduras, manufacturers often pay their workers as little as $66.86 a month; in China, manufacturers pay as little as $32.50 a month. As a result, Capellán says, his garments cost his customers about 9 cents per minute (including benefits and overhead), which compares with 7 cents per minute in Haiti or 5 cents per minute in some Asian countries.