"We would never think of trying to replace the design function for the companies we serve," Capellán de Lama says. "Still, wouldn't it be nice if you were a designer and a company that you trusted showed up with some ideas and some samples of the newest colors or the latest fabrics for inspiration? With every line that we make, we talk to sewing-machine operators about the style of that line's brand. What makes a pair of pants more 'Tommy' than 'Liz'? This is one way for us to show our customers that we understand their brands. Right now, we're doing small runs for a boutique design company that we're losing money on. But we wanted that particular customer so that we could learn from the fabric and from the style of its line."

Grupo M is moving steadily up the fashion-industry value chain. Each step promises to offer the company a greater share of profits, and better work for its well-trained employees. The progression is true to Capellán's thinking: Stick workers with repetitive, uninspiring tasks, and they'll become repetitive and uninspired. Give them something more challenging to do, something meaningful, and they'll blossom -- even in the garment trade.

For decades, the apparel industry has made clothes essentially the same way. It's a classic assembly line: Each person repeats only one task, then passes a garment to the next worker along the line. In 1994, Capellán shifted all of his production lines to a modular model. Now, teams are responsible for finished garments, and individual workers trade off tasks that are necessary to get a job done. Capellán's change increased production by 40% and also made it easier to catch errors: No longer could 400 pairs of pants be made before someone realized that a cut was wrong.

"With the old way, an operator could work for days and still never see a completed garment," Capellán says. "With the modular way, each team is responsible for the quality of every product that it makes. I'm asking them to use their judgment as well as their experience to help figure out whether a garment is up to Grupo M standards."

Though the modular model of production is common in many types of heavier assembly, no more than 10% of Liz Claiborne's garment-manufacturing suppliers use it, Zane says. Many of the suppliers that have moved to that method of production are in the Dominican Republic. Why? Because Grupo M was one of its earliest adopters. To compete, rivals had to match Grupo M's system.

This is Fernando Capellán's legacy: Cheap labor doesn't necessarily yield competitive advantage. Productivity matters, but so does human dignity. Training and education, employee morale, retention -- these issues determine success in the global marketplace.

As rivals rush to catch up with Grupo M, Capellán pushes further ahead of them. Recently, the company started a reforestation project that will cost millions of pesos annually, and it has built a $12 million (USD) plant to purify detergent- and dye-laden water that its finishing factory pumps out. Capellán sees these projects as actions of a company that wishes to be a role model to the rest of the country. That's why he has turned down political opportunity: For now, for him, business represents a more potent vehicle for change. "I think that my contribution is where I am right now," Capellán explains. "I think that I can do more for my country as a businessman than as a politician."

So Grupo M is where he will remain -- knitting the future of his country. Puntada a puntada.

Cheryl Dahle (cdahle@fastcompany.com) is a Fast Company senior writer. Contact Fernando Capellán by email (fcapellan@grupom.com.do), or visit Grupo MSA on the Web (www.grupom.com.do).

Sidebar: Fernando's Code of Conduct

Most clothing companies that use manufacturers located outside the United States now have codes of conduct that prescribe working conditions for factory workers. Fernando Capellán, founder and president of Grupo M, has his own code of conduct for how he thinks a leader should behave."

Listen -- then act.

"You can't understand what's happening at a company unless you hear it from workers themselves. I spend at least three hours a week on factory floors, speaking with people -- asking them about our process, about what's working and about what isn't. My people know that I care about them and their needs because I listen to them, and then I do something about their concerns."

Let people know that they matter.

"Even though we have thousands of employees, I want them all to know that, individually, they matter to Grupo M. We show that by doing little things like posting each worker's birthday on the factory walls. Then, each month, we have cake and we celebrate the birthdays in that month."

The best ideas come from the front lines.