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7:00pm EDT December 31, 2006

Tucked over Alan Hoover’s home mirror is an index card with the words “You Gotta Believe” written on it.

The phrase, made famous by the late baseball pitcher Tug McGraw, inspires Hoover, president and CEO of Kahiki Foods Inc., an Asian frozen foods manufacturer and distributor.

In 1999, Hoover joined the then-$2.6 million company as senior vice president of sales and marketing, working with founder Michael Tsao to expand the company’s brand.

The company moved to a much larger facility in the summer of 2005. There were cost overruns with the move, and Kahiki was short on cash. Then, almost 60 days after the move, Tsao passed away, and Hoover was named president and CEO in November 2005.

Today, Kahiki Foods has 210 employees, and the company posted 2005 revenue of $23 million, with sales up more than 62 percent since 2003.

Smart Business spoke with Hoover about how he grows his company.

Q: How can other executives grow their company the way you’ve grown yours?

We had big dreams. We didn’t have any plans to stay small. Our goal was to grow and become a much bigger company. Those were really the founding things that we really started out with.

One of the things that started us along that line was embracing lean manufacturing. Every two weeks, the senior and middle managers would meet, and we started with the book ‘Lean Thinking.’ Then we went to the book ‘The Toyota Way.’ We made visits to other plants that had embraced lean manufacturing principles. Over the course, we did also bring in a consulting group to help us in that journey.

We put out scoreboards at each process to see exactly what’s going on. If you walk into a baseball game in the third inning, you might see the scoreboard ... so you know a little bit about what’s going on. I wanted to be able to do the same type of thing in our facility at each key process.

It really provided us some rather dramatic results. We dramatically reduced our inventory, freeing up lots of cash for the business. We gained incredible discipline out in our manufacturing operations, really just streamlined so many of the operations and made things easier for people to add value.

We wanted to eliminate all the wasteful things that we were doing in the facility.

Q: How can companies stay on top of trends?

You have to talk to your customers, see what’s going on in their business and really understand where they’re headed. You’re looking at what the consumers are buying and where they are going to shop.

Distill it down and (say), ‘This is where we think things are headed. Let’s create the future for ourselves by understanding where these trends are taking the consumers and our customers. Let’s be ready to go.’

There’s a (phrase) in ‘The Toyota Way’ that we use a lot. It’s called ‘genchi genbutsu’ — going out and standing in the circle. When you stand there long enough, you start seeing things from a different perspective and getting new ideas.

Q: What advice would you give other CEOs trying to grow their companies?

You’ve got to love what you’re doing and be passionate about it. It really starts with you.

There’s another Japanese word we’ve incorporated here called ‘hansei.’ It means reflection. We want to make it safe for people to reflect and (say), ‘I really messed up. I made a mistake, but here’s what I want to share with the group on what I’ve learned from it. Here’s why I made that decision, and here’s how I would do it differently now.’ They’re not going to lose their job over that.

I encourage people to overcommunicate because we have to deal in three languages here every day: English, Spanish and Mandarin. When I do a meeting with our hourly team members, I’ve got interpreters on both sides of me. We also use lots of graphs and charts. People can see the trends and things that are going on.

I’ve borrowed a term from Les Wexner [chairman and CEO of The Limited Brands Inc.]: ‘Doing the right things right.’ We preach that all the time. Don’t compromise on anything in regards to quality. Treat the customer with the greatest level of respect, and do everything you can to make that customer a fanatic of your company.

If you do the right things right, and you do that consistently, you’re going to be successful. It’s not rocket science; it’s basic fundamentals.

HOW TO REACH: Kahiki Foods Inc., (614) 322-3180 or www.kahiki.com