(FORTUNE Magazine) – When Richard Teerlink climbed onto the CEO's saddle at Harley-Davidson in 1989, he inherited one of the most storied brands in the history of business. But while Harley still created feelings of freedom for loyal riders, the company had lost much of its ability to sell those vibes. Harley changed that by opening up new conversations inside the company and out. In-house, a rigorous quality-control program kick-started talk at all levels of the company. With every employee involved in some form of variable compensation, Teerlink has 5,000 people talking about how to improve the place and its products.

That's just the beginning. Conversations with customers really drive Harley's strategy. Harley's customers aren't merely buyers of its bikes; they feel like part of the company. "There's a high degree of emotion that drives our success," says Teerlink. "We symbolize the feelings of freedom and independence that people really want in this stressful world." Because of these emotional links to the brand, customers tend to be extremely loyal. Even though the company has boosted capacity, Harley's insistence on top quality means customers have to wait for bikes. Still, they rarely bolt for the nearest foreign motorcycle dealer to buy a high-speed crotch rocket. If anything, scarcity has added to the brand's mystique. To help customers quell their cravings, Harley slaps its logo on merchandise from deodorant to throw pillows.

Harley owners are a diverse bunch, from CEOs to construction workers. How could the company talk to them all? "We needed to give people a reason to use our products, and we needed to be there with them," says Teerlink. So Harley created Harley Owners Groups--HOG, for short. Their members now number 360,000, and local chapters organize frequent road rallies. Teerlink and other executives get to as many as possible, and they always carry a pad and pencil. Why? Well, a great new idea might pop up. A rider approached the company in the 1970s about some design changes, and the bikes that emerged as a result are today among Harley's most sought-after models. --R.B.L.