From Agile to Lean Tech: Theodo's journey toward learning at scale
Scaling a software company without sacrificing agility, quality and a learning culture is rare. Theodo's experience represents one of the most consistent attempts to do so through lean thinking. Over the past 14 years, the company has been deepening and structuring the debate about what it means to apply lean in the technology industry, well beyond the simple adoption of agile methods.
In its early years, Theodo operated like most technology companies on the market: it delivered exactly what customers asked for, following rigid plans and fixed scopes, while silently absorbing the frustration caused by delays and rework. The company's lean journey began when an unsuccessful project made them realize something fundamental: their role was to help define the best way of working to solve the customer's problem, not merely to carry out instructions. Theodo came to see digital delivery not as the execution of predefined solutions, but as a learning process that requires visibility, feedback and shared responsibility for results.
What began as a move toward agile methods quickly evolved into a lean journey, focused on building trust, making problems visible and developing teams' ability to learn, adapt and continuously improve together.
Theodo grew from a two-person company into an organization with 700 employees (and from US$ 1 million to US$ 100 million in revenue) by connecting agile practices to lean thinking. As described in the book The Lean Tech Manifesto, the company sees lean as the only way to turn the IT function into a system that generates value, autonomy, quality and continuous learning. Moreover, Theodo considers lean the only path to capturing the benefits of agile at scale.
According to Fabrice Bernhard, Theodo's CTO, the company's approach to lean tech is structured around five pillars: value for the customer; a tech-enabled network of teams; right first time; just-in-time; and building a learning organization. This kind of language is still uncommon in technology companies, and that is precisely what makes Theodo's trajectory so relevant: the company represents a bridge between lean thinking and the technology industry.
As organizations grow, teams often lose clarity about who their customers really are. When engineers no longer understand why they are building something, the opportunity to create creative, high-value solutions disappears. According to Fabrice, part of the answer lies in reducing complexity by defining clear end-to-end value streams, organized into a tech-enabled network of teams. In addition, it is essential to make customer value visible and shared across the whole organization through strong visual management, using practices such as the obeya (collaborative visual management room) to expose and frequently review critical indicators related to the value delivered to the customer.
“Or you can cling to the bureaucratic alternative that traditional SAFe [Scaled Agile Framework] programs execute so well: create multiple layers of product management to translate leadership's intentions into roadmaps of features to be implemented by disengaged software engineers — and hope your competitors are doing an equally bad job”, Fabrice wrote here.
In this Planet Lean article, JR Beaudoin, CTO of Theodo Inc. in New York, explains how the team went beyond agile by introducing lean problem-solving tools, such as a simple andon system and the PISCAR method (Problem, Impact, Current situation/Standard, Causes, Actions, Results), a seven-step structured problem-solving framework that combines the 5 Whys and the 7 Wheres.
“Lean problem solving changed our mindset: we stopped trying to maximize the team's velocity and started seeking to maximize the value we deliver to the customer.”
When it comes to the pursuit of quality, the Theodo team is meticulous. At the beginning of its lean journey, for example, it applied to code development work the "red bins" system (red bins) — widely used on the shop floor. "This system ensures that no defect goes unnoticed or remains uncorrected. No error can move beyond the process step in which it was generated”, explained Marek Kalnik, CTO and co-founder of Theodo Apps.
More recently, after the publication of the book The Toyota Way of Dantotsu Radical Quality Improvement, the team even began experimenting with this much deeper and more radical approach to quality. Woody Rousseau, CTO and co-founder of Theodo Fintech, stated:
“There is no shortcut to achieving high levels of quality. As a CTO, it makes me want to raise the quality bar of the entire tech industry, where bugs are seen as an inevitable waste of time. ‘Zero bugs’ is the true way forward!"
To truly become a learning organization, Theodo seeks to build learning into the work itself. Teams are trained to treat real problems as study material, using structured problem solving in concrete day-to-day situations, instead of relying on theoretical classroom training or abstract best practices. Dojos create regular rituals of shared learning: teams bring current problems, jointly analyze the causes and are challenged by other colleagues. As the organization grows, learning no longer remains isolated within each team: groups facing similar challenges connect through communities of practice (guilds), using kaizen as a common language to refine their capabilities, improve practices and share solutions across different areas and geographies. Even more importantly, at Theodo learning is considered a leadership responsibility. Managers are expected to create the conditions for problems to surface, support teams in solving these problems and ensure that learnings are captured, disseminated and built into the work system.
In this article, Ben Ellerby, a partner at Theodo, stated: “The companies that will succeed in an increasingly uncertain and fast-changing landscape will be those that invest in empowering their developers to work in a lean way. Applying a framework such as scrum and saying your company is agile is no longer enough. Bringing lean to software development means taking the transformation to the gemba, changing the way developers think, write code and build features, as well as establishing a learning culture that sustains continuous improvement.”
Even with the rapid advance of AI in the world, the organization has not lost sight of what it considers its true competitive advantage: a system for developing people. In fact, Fabrice believes that artificial intelligence is widening the gap between organizations that have this kind of system and those that do not.
A key concept for Theodo is jidoka (automation with a human touch). For the company, scaling the use of AI only works when quality is already built into the process from the start. Reaching 80% accuracy may take only a few minutes, but achieving levels between 95% and 97% requires real effort, discipline and investment of time — especially when systems scale to hundreds of similar components.
In his presentation at Lean Global Connection 2025, Fabrice said:
“Lean is an extraordinary compass for navigating a technological revolution. Instead of thinking of AI as a way to eliminate jobs, organizations should use lean to identify and tackle the big problems that can be solved with the support of artificial intelligence.”
For Theodo, the big problem today is that software is everywhere, but it is supported by increasingly fragile and obsolete legacy IT systems. In recent years, the company has come to specialize in using Artificial Intelligence solutions to modernize these systems. Thanks to its lean approach applied to AI, Theodo can do this work three times faster than before and with better-quality architecture. This is how the company seeks to fulfill the promise of technology without giving up its lean principles.
