Lean Management Meets Tech: Theodo Group’s Success Story with Catherine Chabiron & Fabrice Bernhard

January 4, 2024 Modified date: January 12, 2024

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My guests for Episode #495 of the Lean Blog Interviews Podcast are Catherine Chabiron and Fabrice Bernhard, who are discussing her new book Learning to Scale at Theodo Group: Growing a Fast and Resilient Company.

Catherine Chabiron is a board member for the Institut Lean France, a member of the Lean Global Network, like the Lean Enterprise Institute.

Catherine is an established expert in Lean management with a professional journey spanning over 40 years. She has experience in a range of service and support functions, including IT, Logistics, Sales, Finance, and HR, both in France and globally.

As a Lean executive coach, her expertise in Lean thinking has been largely shaped by her experiences within the automotive industry, where she has lived and breathed the Lean philosophy. This has been further enriched by her regular visits to the Toyota supply chain in Japan, an experience that has offered her unique insights and an in-depth understanding of how a learning culture operates.

So, speaking of Theodo Group, we're also again joined by their chief technology officer and co-founder, Fabrice Bernhard. He co-founded Theodo in Paris in 2009, which has grown on average 50% yearly for the last 8 years and generated 90M€ revenue in 2022. He is now based in London to help with the international expansion.

We delve into the broadened application of lean principles in our discussion with Fabrice Bernard and Catherine Chabiron. Bernard shares how Theodore Group implemented Lean as a strategic pillar in their operations, using it as a toolbox to create sustained growth and maintain competitive edges. They systematically addressed business challenges using TPS, Extreme Programming, and Scrum to conjure the “agile magic” of a small, integrated team at scale.

Don't miss out on the chance to hear about cultivating a Lean culture that goes beyond strategy and tool adoption. By fostering an environment of continuous learning, teamwork, and the relentless pursuit of excellence, Theodore Group effectively established Lean as the backbone of their company's culture. We also expound on broader societal challenges that can be addressed through Lean methodologies and the journey of A3 thinking in fostering deep understanding and collaboration. This episode takes an expansive look at Lean practices, demonstrating its adaptable, innovative, and ethically conscious nature across different industries, proving its potency in driving companies towards sustained growth.

Questions, Notes, and Highlights:

What are your Lean origin stories?
Lean as a strategy at Theodo Group?
How did the two of you come to work together? First met in Japan, right? What led to the book?
Startup vs Scale-up?
Six Planet Lean articles – LINK
Sharing Lean thinking with your CEO and other leaders?
How do you embody Lean?
A lot of virtual work now? If so what does Gemba mean?
What does continuous improvement mean to you? How do leaders foster a learning culture?
How does continuous improvement address not just the scaling challenge but societal challenges?
Why are the current ways of scaling a company broken?
Big Company Disease? Silos and process trumping customers, compliance over initiative

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Episode Summary

Embracing Lean Principles in Technology and Beyond

The Roots of Lean Management

During its inception, lean methodology was deeply entwined with the automotive industry. Early adopters and practitioners, such as Catherine Chabiron, a board member for the Lean Institute France, leveraged their experiences with lean in the manufacturing sector to drive efficiency and continuous improvement. Lean, which originates from the Toyota Production System, is not merely a set of tools but a philosophy that promotes the elimination of waste, optimization of processes, and maximization of value to the customer. Chabiron's 40-year career spans a diverse array of service and support functions, including IT, logistics, sales, finance, and HR, showcasing the versatility and broad applicability of lean principles.

These management principles, which began in manufacturing, have progressively been integrated into service industries. Chabiron's work with the French post office highlights how lean can transform traditionally non-manufacturing sectors. The pursuit of lean within support functions like finance and accounting illustrates its relevance in areas where repeatability and process flows are abundant. By focusing on continuous improvement, even processes that seem disparate from manufacturing–such as the handling of invoices in SAP–can benefit from lean thinking.

International Lean Practice and Knowledge Transfer

The international lean practice has been significantly shaped through experience and learning, with study tours to Japan playing a pivotal role. Trips to the heart of lean philosophy allow executives and managers like Chabiron to immerse themselves in the culture of continuous improvement deeply ingrained in Japanese companies. These visits offer insights into the practical applications of Kaizen–meaning change for the better or continuous improvement–and its adoption across all levels of an organization. It becomes evident that the initiative for improvement is not just the responsibility of frontline workers, but also those involved in design, engineering, supply chain management, and more. Such exposure underscores the importance of inclusive lean practice that aligns the efforts of everyone from operators to executive leadership.

Adapting Lean to Digital Enterprises: The Theodo Group Story

Approaching lean from a technological standpoint, we can examine the experiences of Fabrice Bernhard, CTO and co-founder of Theodo Group. Founded in Paris in 2009, Theodo Group demonstrates how a tech business can use lean as a strategic pillar to drive growth and resilience. Despite being a digital native company, Theodo struggled with operational efficiency until they adopted and strictly enforced Agile methods–specifically Scrum and Extreme Programming–which fundamentally shifted the way the company delivered value to clients.

This adoption led to better engagement of teams in the work process, producing outcomes closely aligned with customer needs and offering a more fulfilling experience for the team members. It also highlighted operational scale issues; Agile practices provided clear guidance for individual project management but lacked directives for corporate activities and multi-team projects. This gap led to the exploration of Lean as an overarching principle that could scale the benefits of Agile across the entire organization.

The Symbiosis of Lean and Agile Principles

The journey Theodo Group embarked on reveals a common quest for operational excellence across different industries. The quest seeks a sustainable way to deliver high-quality products while engaging employees and satisfying customers. The combination of Lean and Agile principles paved the way for Theodo to operate in a manner where the creation of customer value and the development of empowered, self-managing teams were of paramount importance.

However, the broader adoption of Lean in a tech environment was not without challenges. As with any transformative methodology, it met resistance, especially from higher-level management accustomed to traditional silos of operation. In overcoming this, it became evident that real examples of front-line improvements and team-level success stories were crucial to winning over skeptics and demonstrating Lean's universal applicability.

Each incremental step in embracing Lean, from Chabiron's roots in the automotive industry to Bernhard's experiences in fostering growth in a tech startup, illustrates a key truth about the Lean journey. It's an evolution–practiced, refined, and shared across borders and sectors. Whether it's optimizing the supply chain within Toyota's ecosystem in Japan or scaling a fast-growing tech company in Europe, Lean proves to be a transformative approach driving modern businesses towards enduring success.

Expanding Lean Philosophy in the Digital Realm

Theodo Group's application of Lean and the codification of their journey in Catherine Chabiron's book stand as a testament to the flexibility and power of Lean thinking in the contemporary business landscape. Emphasizing customer value and quality, Theodo Group meticulously integrated various Lean tools, such as TPS and Kanban, with their own tech-driven methodologies. This cross-pollination of Lean with modern tech practices serves as a blueprint for other digital enterprises aiming to sustain growth and maintain competitive edges.

By systematically addressing core business challenges and leveraging the extensive support of TPS, Theodo Group managed to maintain the “agile magic” of a small, integrated team at scale. Their evolution provides several key insights into applying Lean in the burgeoning tech industry:

Voice of the Customer: Making the customer's feedback visible and central to project management not only bolsters transparency but also roots the entire operational focus in meeting or exceeding customer expectations, reflecting a central tenet of Lean.
Employee Empowerment: Engaging and empowering front-line employees with problem-solving techniques and visual management systems ensures that every team member is invested in improving processes.
Lead Time Reduction: Tracking and reducing lead time is integral to maintaining agility, especially in the fast-paced tech environment where quick market responsiveness is vital.
Quality Focus: Adopting a radical quality approach in software development, inspired by manufacturing rigors, drives Theodo Group towards delivering exceptional products and services.

Lean Culture as a Foundation for Innovation

Beyond just Lean as a strategy, Theodo's initiative to enshrine Lean as the cultural backbone of the company has been transformative. Cultivating a Lean culture involves more than the adoption of tools and processes; it necessitates a leadership style focused on continuous learning, teamwork, and an unyielding pursuit of excellence.

Gemba Walks: Committing to regular Gemba walks, where managers actively observe and engage with the work being done at the ground level, is instrumental in maintaining a connection with the operational reality and fostering a culture of continuous improvement.
Coaching and Teaching: Leveraging Lean coaches and kaizen experts within the company fuels knowledge transfer and reinforces a shared understanding of Lean principles across all levels of the organization.
Problem Solving Culture: By prioritizing problem-solving as a shared responsibility, Theodo Group encourages a dynamic where challenges are opportunities for growth and innovation. Engaging employees in workshops and encouraging open discussions on improvements empowers teams to take ownership of process enhancements.

Leveraging Lean in a Remote Work Environment

Given the evolution of work environments and the rise of remote collaboration, Theodo Group has been adept at translating the principles of Gemba into the digital space. Despite the physical distance, maintaining the spirit of Gemba by observing workflows and encouraging in-person interactions when feasible underscores the importance of human elements in digital processes.

Digital Gemba: Adapting to remote work conditions, the company continues to perform Gemba walks leveraging technology, ensuring comprehensive engagement without compromising the collaborative aspects essential for a holistic understanding of project dynamics.

In essence, Theodo Group's story is a real-world example that provides insights into how innovative digital companies can use Lean not just as a set of practices or methods, but as a robust strategic and cultural framework. Lean thinking becomes the driving force behind technological innovation, customer satisfaction, team empowerment, and ultimately, sustainable growth in the fast-paced digital world.

Cultivating a Learning-Oriented Leadership Team with A3 Thinking

One of Fabrice Bernhard's emphasized Lean principles involves the A3 thinking process, a structured approach aimed at fostering deep understanding and collaboration between team members, especially at the leadership level. The distinct stages of identifying the problem, analyzing the current situation, and proposing countermeasures are each shared across the team, enabling collective problem-solving and informed decision-making.

Structured Collaboration: By using A3 reports, leadership teams can debate and refine strategies, fostering unity and commitment to implementing change.
Raising Standards: A3 thinking challenges leaders to clarify their expectations and regularly evaluate adherence to high standards, preventing complacency as the company scales.

Addressing Societal Issues through Lean Methodologies

While Theodo Group's focus on internal growth and efficiency prevails, there is a recognition that Lean methodologies and continuous problem-solving proficiency can transcend the company's walls and address broader societal challenges.

Eco-Conscious Coding: The conversation regarding ‘green code' reveals a growing responsibility within the tech sector to minimize energy consumption and reduce waste through more efficient coding practices, leading to a lesser environmental impact. This reflects a desire to not only improve internally but also contribute positively to global sustainability.

Scaling with a Sustainable Vision VS Extracting Value

Bernhard draws a sharp contrast between the Lean, humanistic approach to scaling with sustainable, societal contributions and the alternative strategy of monopolizing markets to extract value, often attributed to Thiel's “zero to one” strategy. The latter, in Bernhard's perspective, raises ethical concerns and lacks the collaborative essence vital for a healthy corporate culture.

Venture Ethics: Bernhard highlights the ethical implications in business strategies, advocating for scaling in a way that adds value to society rather than extracting it.
Sustainable Scaling: Raising excessive funds and rapidly hiring senior executives to execute a predefined playbook can lead to a fraught path if not aligned with cultural values and the collaborative nature of the organization.

Wise Scaling: Money versus Culture

The discussion on scaling also touches on market realities where money, once easily raised, has become a scarce resource, altering strategies of company growth.

Cost of Capital: As the cost of raising capital increases, companies must adopt more prudent and effective scaling methods, moving away from hiring numerous high-cost senior executives to execute rapid-growth playbooks.
Cultural Compatibility: Understanding the importance of integrating senior hires into an existing culture that values collaboration and transparency is crucial. Otherwise, there is a risk of creating silos and mobility issues within the company, which can impede the collective learning process and hinder innovation.

In conclusion, Theodo Group's examples, underpinned by TPS, A3 reports, and Gemba visits, denote a well-rounded Lean approach, not only in scaling business operations but also in fostering a culture rich in continuous learning and societal responsibility. The experiences shared illustrate the potency of Lean thinking in creating adaptable, innovative, and ethically conscious companies in the modern digital landscape.

Avoiding the Big Company Disease

In the face of rapid growth, many organizations succumb to the “big company disease,” where rigid processes begin to overshadow the customer-centric approach that initially spurred success. Fabrice Bernhard's and Catherine Chabiron's insights lead us to understand that this common pitfall can be mitigated through the implementation of Lean philosophies.

Expertise Versus Teamwork: Although necessary, specialized departments or “silos” of expertise must not disrupt the seamless integration of teamwork. These silos often contribute to bureaucracy, which can impede agile decision-making and collaborative efforts.
Initiative Over Compliance: Organizations should emphasize the importance of individual initiative rather than strict adherence to predefined playbooks. This encourages employees to engage with their work creatively and thoughtfully, fostering a culture where problem-solving thrives.

Lean as an Antidote to Complexity

Scaling results in an unavoidable increase in complexity. Catherine Chabiron notes that, as a company grows, so do the difficulties of maintaining simplicity and clarity in operations. Lean thinking, with its emphasis on daily interactions, discussions, and questioning, can serve as an antidote to this complexity.

Daily Team Collaboration: Ensuring that communication between team members remains consistent and proactive is vital. It's through these regular interactions that teams can remain aligned and quickly address emerging challenges.
Transparency and Continuous Improvement: By fostering an environment where questions are encouraged and transparency is the norm, organizations can consistently fine-tune their processes and address inefficiencies without succumbing to the inertia that often accompanies growth.

Learning to Scale at Theodo Group

Theodo Group's adoption of Lean practices is a testament to their commitment to sustainable growth. They've shown that fast-growing technology companies can indeed benefit from Lean methods. This moves beyond the usual focus on production and manufacturing industries, showcasing the versatility of Lean in various business contexts.

Lean in Tech: Adopting Lean in tech involves, among other things, incorporating efficient coding practices, simplifying processes, and enhancing collaboration, always with a keen eye on creating value for both the company and society at large.
Book Insights: Bernhard's and Chabiron's exploration in their book, “Learning to Scale”, delves into these practices and principles, offering readers a vision of how Lean can help technology companies navigate the challenges of rapid growth while maintaining a firm grasp on their core values.

Catherine Chabiron's and Fabrice Bernhard's reflections serve as a reminder that growth should not come at the expense of an organization's soul. Their emphasis on collaboration and avoiding “the big company disease” is a vital message for companies aspiring to scale thoughtfully and sustainably. Their narrative is a compelling argument for the power of a Lean mindset to contribute meaningfully to a company's evolution without losing sight of the importance of customer focus, teamwork, and innovation.

Automated Transcript (Not Guaranteed to be Defect Free)

Mark Graban:
And my guests today are Catherine Chabiron and Fabrice Bernhard. So I'll say hello, and because they're both French, I don't speak any French, I'll say bonjour to everybody. But Catherine is a board member for the institute Lean France, which is a member of the Lean Global Network. Like the Lean Enterprise Institute here in the US, Catherine is an expert in lean management with a professional journey that spans over 40 years with experience in a range of service and support functions, including IT, logistics, sales, finance and HR, both in France and globally. We'll learn about her origin story, but she has roots in the automotive industry, where she's lived and breathed the lean philosophy.

Mark Graban:
This includes many trips to the Toyota supply chain in Japan. So Catherine is not only a lean executive coach, but also an author. Her book is titled Learning to Scale at Theodo Group, growing a fast and resilient company. So I'll say bonjour, Catherine. Welcome.

Mark Graban:
How are you?

Catherine Chabiron:
I'm fine, thank you. And here is the book, by the way.

Mark Graban:
Yes, we have the book possibly to discuss today, learning to scale at Theodo Group. And so speaking of Theodo Group, we're joined by their chief technology officer and co founder, Fabrice Bernhard. He founded Theodo in Paris in 2009. The company has grown, on average, 50% a year over the last eight years and generated €90 million in revenue in 2022. He's now based in London to help with the international expansion.

Mark Graban:
So, Fabrice, bonjour.

Fabrice Bernhard:
Good day.

Mark Graban:
Welcome. How are you?

Fabrice Bernhard:
Good day. Thank you for inviting us.

Catherine Chabiron:
Yes.

Mark Graban:
Of all the words to stumble over, I don't know why the word technology tripped me up there, but.

Fabrice Bernhard:
We'Re going.

Mark Graban:
To start, maybe with Catherine. I like to ask people how you started your lean journey. It sounds like it was with the Toyota production system. But let me turn over to you to hear more about your background and origin here.

Catherine Chabiron:
Well, when you join automotive, you cannot not do lean. I was working not directly in a car maker industry, but in a supplier in rank, one supplier of car makers all over the world. And it was quite obvious we had to do lean. And my particular experience is that lean was quite developed in manufacturing. It was starting in the lean engineering part in developing products.

Catherine Chabiron:
And my job at that time was to develop lean in offices, in support functions, which I did quite extensively in the domain of finance, which sounds curious, but that was in accounting, for example, where you have a lot of recurrent tasks and there's a lot of flows and a lot of documents, systems and data to take care of. But most of the lean experience I have derived from our TVT in it where we were providing production systems. And I really helped it in that automotive company to propose a lean approach to bugs, problems, quality releases and so on. This is where my experience steps or stems from. And then I moved out of the automotive industry, continued lean with different industries, progressively moved out to services like the post office.

Catherine Chabiron:
I have extensively worked with the french post office to help them do lean. And I heard about Theodo and they were in the tech business, the digital writing apps for the web or mobile phones. And I thought, oh my God. And they were saying that they were using lean practically as a strategy to run the business. And this what brought me to them because I wanted to see what they were doing.

Catherine Chabiron:
And since I was doing a lot of visits, Gemba visits to french companies, and I was telling the tale in Planet lean magazine just rang the bell and said, hello, can I come and visit you? And this is the story, how it started.

Mark Graban:
And then speaking of visits, as it said in your bio, you had trips to Japan. How would you describe the impact of visiting there?

Catherine Chabiron:
Well, every time I go back, know it's those TPS study tours, nothing specific. A lot of people, a lot of other people have done it. We actually met in Japan with fame in such a tour that every time we go there, every time we take a new step back. For example, our last visit in May, we had a really deep thinking about what Kaizen actually meant. Is Kaizen so much the initiative of frontline people?

Catherine Chabiron:
No, actually frontline people have very limited opportunities to do Kaizen because they can only impact the gesture, the technical, the workstation and the gestures they make. But actually, there is a lot more Kaizen that is very key in the company. Any waste produced when you launch a new product. So do the engineers who design new products come and see and do the Kaizen with the frontline people on whatever they create. Every time you change the line, manufacturing engineering people, they have to come to the frontline people and also check the impact of the decision they took.

Catherine Chabiron:
Supply chain. Every time the supply chain brings in a new supplier, a new material, a new way of a new lead time, they are going to impact the production. So that was really thinking about it again. Kaizen is not just a frontline operator business, it's everybody's business.

Mark Graban:
One other question for you, Catherine, before we'll turn to fabrice for a bit. When you were doing some of that work in office and support functions, I'm curious to hear if you have any stories about trying to get people engaged with lean. They might say, well, we're not the factory, we're not the shop floor. We're different. You mentioned repeatable processes.

Mark Graban:
Sometimes people have trouble seeing that. Do you have any recollections of some of the ways you got people to cooperate with you?

Catherine Chabiron:
I would say the big bosses were the most reluctant. Just get out of my silo. I know what I'm doing. Don't bother me. But every time I went to the frontline operators and we were doing some what I remember one day where we were watching an accountant trying to enter invoices, supply invoices in SAP.

Catherine Chabiron:
And then we took a step aside and watched another more experienced one. And the other one was taking three times less time to do the same job. And when the local boss saw that, he thought, my God, I haven't helped the people understand all the tips and tricks. I'm just putting them in front of a machine and assuming that they know. So usually when we were with front line of operators and local management, providing they were willing to open their eyes and change things, it usually worked.

Catherine Chabiron:
The big bosses were more reluctant, so I had to go around them sometimes.

Mark Graban:
So, Fabrice, maybe I'm wondering if it's better for you to tell some of the story of Theodo Group about the company and the founding and what you do, or your lean origin story. I don't know how those are intertwined.

Fabrice Bernhard:
Perhaps I can completely intertwine them both together because they're very much linked. Yeah, if you start. I co founded the first company before Theodo called anomalatch.com. So that was a typical web startup. We were the website to find sports bars and cafes and restaurants, were to find these places where you couldn't watch sports games.

Fabrice Bernhard:
And that was an amazing adventure. Straight out of uni, the product became very popular. We reached break even, but at the same time, it wasn't generating that much revenue. It was enough as a student or straight out of university person. But clearly it wasn't enough for our future ambitions.

Fabrice Bernhard:
And that's when we started Fyodor. And I'm mentioning that because at the early stages really is product DNA. We wanted to create a product that generated value to users, and we managed to generate value for users. Not enough for the business, but one asset we have is this technical team. So we start servicing other small businesses that at the time we're in 2008, 2009.

Fabrice Bernhard:
Digital transformation is big, and so every small business has this low hanging fruit of thing you could digitize. And so we start doing it for one of our roommates, like a business that was in the same building as us, and it creates tremendous value for them. The software we built together was actually used for ten years, generated tens of millions of revenue over the years, and we really love building it. So that's the beginning of Theodo trying to build the kind of useful products that we know how to build for others. But there's two key moments in the journey.

Fabrice Bernhard:
That's where we come to lean. The first key moment is even though we're digital native, so we do stuff that looks agile, we're not expert enough in agility at the time, and so we're doing some kind of weird mix of everything with clearly mixed results. And there's this moment where we're starting to be very frustrated by how things work and to make it very simple in the usual way of working, you agree, you sign a contract on what you're supposed to do, for what price, and this applies to a lot of industries. Software is one of them, and there's a lot of complexity. And as soon as you sign a contract, the issue is there's so much complexity in what you're building that it starts becoming like a constant battle between a business or customer that wants more features within the scope, and of course, the delivery team trying to maintain the margins and sanity and so trying to cut some corners.

Fabrice Bernhard:
So we reached a stage where like, okay, we need a different way of working. This is not good enough. And we decide to go really strict on agile, really scrum by the book extreme programming, and kind of impose it on the clients and say, look, this is a way we believe things can be done better, we can build better products this way. So that's the only way we want to offer. And we were very lucky because actually the first project was an amazing success, and the second and third, and it was really day and night.

Fabrice Bernhard:
All of a sudden the clients were very happy because we were building exactly what they needed or things that they needed but didn't know they needed. At the beginning, the teams were much happier because they got engaged in the problem solving, like trying to actually create value for the business. And for us as a business, it was very scalable. Like all of a sudden a new client was a new agile team around them. The client was in the team.

Fabrice Bernhard:
And therefore, before that, I was the chief firefighter going around trying to solve problems. And all of a sudden the teams were so empowered around the client, they managed to solve almost every problem they faced. And that's very important because I think for us that was the eye opening moment where we thought, oh, wow, there are different ways of working and they can really change everything, both for the customer creating more value, but also for the people really enjoying it more. Right. And when we realized that Agile was good for structuring how a team works with a client on a project, but quite limited in telling us what to do at a corporate level, like, what do you do with recruitment, what do you do with sales, what do you do with strategy, with financing?

Fabrice Bernhard:
What do you do with projects that need more than one team? And luckily for us, this was before safe became popular.

Mark Graban:
And for those who don't know, sorry, not everyone knows agile. Can you say what safe stands for?

Fabrice Bernhard:
Yes. So agile is most known for one methodology called scrum. And when you talk about agile, you often refer to the agile manifesto, agilemanifesto.org. And safe, which is the acronym for Scaled Agile for Enterprise, I think is a framework that was built over time to address exactly the issue I had at time and that most organization have, which is, I'd love to be agile. I can see the benefits of being agile, but I'm not a one team of software developer.

Fabrice Bernhard:
So how do I get these benefits at the size of my large company or my large project that involves many teams? And safe is a framework. Trying to answer that, and at the time it didn't exist. So we went for a different option. And now, in hindsight, I'm quite assertive on the fact that safe does scale, but it doesn't scale agile.

Fabrice Bernhard:
To come back to us, at the time, what we wanted was really scale these agile principles. And we met with someone who said, yeah, I had the same issue. I was like, I tried Agile, it was amazing, but I was in this large telco, and as soon as I tried to apply it at a bigger scale, it just didn't work. And I could feel that it was profoundly not thoughtful, like larger scale. So I looked for something else and I found something, and it's called lean.

Fabrice Bernhard:
And if you want, I can actually help you on your journey because I've been on this journey for a while and I've actually quit the telco and I'm now a lean coach. So do you want me to help you on that? And of course, what he said resonated so much with our experience. They were like, okay, yeah, of course, let's try it. And the rest is history.

Mark Graban:
Yeah. And that's where things evolved. Catherine earlier mentioned the idea of lean as a strategy. Is that how you would describe things now at Theodo group?

Fabrice Bernhard:
Yeah, I think at the time what I'm talking is about 2012, 2013. So we're a bit more than a dozen, so we're quite small. So I'm not saying we had a very structured strategy at the time, but I think we had a deep vision and desire to maintain that agile magic that we had experienced. That was the strategy, that was the desire. And when we started understanding lean and getting into that journey, it clearly became the strategy to achieve that.

Fabrice Bernhard:
So how can we keep the ingenuity of a small team of technologists and business experts working together, coming up with better solution, creating more value? How can we keep that in every function and everywhere in the company? And clearly the best framework we've come up with, it's not a silver bullet, but the best framework we've encountered is lean thinking and TPS.

Mark Graban:
So, Catherine, from your perspective as an observer, and then as a collaborator for the book and bringing that story to market, what are some of your observations and thoughts on what Fabrice has said?

Catherine Chabiron:
Well, when I went to see them, I said, can I come for a few visits? Because I was a bit ambitious on the book. By the way, we're three authors, but the initial articles that I wrote are the core of the book, and I'm talking about those articles when I came to see them, I was ambitious because I had done Gamba visits with french companies before, but just telling the very limited story about lean engineering or Kaizen or CEO behavior. But this time I wanted to really try and describe the whole company. So we were really trying to check what the big challenges can be in any company, by the way, not only a scale up, and each of the visits was an opportunity to check how they managed the relation with the customers, how they were transforming deals into sales, sorry, leads into sales, into actual products, into after sales, into cash.

Catherine Chabiron:
How did they recruit, retain talent, how did they keep on the technical, how did they manage to survive in a very fast changing technical world, not to mention the latest chat, GPT and so on. How do you keep on edge on this technical world? And generally speaking, how do they build their strategy based on all those challenges? So every visit was trying to address one of those business challenges, and it was very clear from visit one or two that they were using TPS extensively. Like, for example, the relationship with the customer, the customer obsession, was very much in line with the roof of the TPF that we all know with the customer satisfaction.

Catherine Chabiron:
They were very much working the engagement of people. They were very aware that you cannot satisfy a customer if you're not taking care of the people that are in the front line. So they were working on systems that could enable the work, the daily work of people they were working on and on the possibility to call for help. They had also this lead time obsession like the Kanban. So Kanban is something that Agile has adopted, but very often Kanban is just making a product through a funnel of activities.

Catherine Chabiron:
And it's more like looking at the output. What they were really trying to do is understand what was happening in each and every step of the activity and leading great conversations when they were stuck. And also they were working on quality because I discovered that they had read the book of San Numura don Totsu, and some of the people in theater were very much on radical quality and they were really trying to use know how and knowledge from manufacturing into production of tech apps. So the TPS was absolutely extensively the support of their daily work. And that was amazing, because again, it's the digital world, it's a tech company, it's growing fast.

Catherine Chabiron:
The people are like families may be wrong, but the average age of the people is around 30 ish. Most of them have never known anything about Toyota. None of them has been in industry. And still they're trying. They're trying because they see the benefit from it.

Catherine Chabiron:
Yes. I was very impressed by the fact that they were relying on TPS. Yeah.

Mark Graban:
And then we can talk more about a Theodo Group, but can you tell us a little bit more about the story of how the book came to be? You said you started with some articles and decided there was kind of a more complete story to tell as a book.

Catherine Chabiron:
Yeah, well, actually the fabric fame, and you will certainly add, we had those six articles that I had done for Planet Lean, the six visits with the six business challenges. It was very interesting. We were thinking, how can we help the tech world with this story? Unfortunately, most of my articles were actually referring to tps and to lean concepts that most people in the tech world don't know anything about. So we decided to add some explanations about what I had commented on the field and we did that with one of the co author is the author of Learning to scale, a book that was written already before this book, just learning to scale on how lean can help people scale up.

Catherine Chabiron:
And the book learning to scale was actually also very much inspired by the lean strategy by Mike Buddy. So that's the story. It's the lean strategy. Can we actually use lean as a strategy to grow and sustain our growth? Second, learning to refocus on tech scale ups and learning to scale at theatre group, the idea of a case study, a real case study, because there's a lot of backstage stories in the book to tell how it works.

Catherine Chabiron:
It actually works. Fabrice, you may want to add on this.

Fabrice Bernhard:
No, I think it's been incredible for us to have. It was incredibly full of learnings. To have somebody with Catherine experience observing us, then writing about us, then it was even better to have that as a book. And that's why we're here, because.

Catherine Chabiron:
I.

Fabrice Bernhard:
Think what Catherine and her co authors, but I do credit her a lot have done, is I think it's a really practical example of what Lean can look like in the tech industry. And I'm not sure there's any other. I think it's the first kind example of that kind. Learning to scale is an amazing book, but it's still slightly theoretical, whereas Catherine's book is much more example based. Yeah.

Mark Graban:
And I will put a link in the show notes to those planet lean articles. The deep dive into a tech company series. Fabrice, one question for you, because I think this term has been used once in a previous episode, but I don't know if everyone listening is familiar. The difference between a startup and a scale.

Fabrice Bernhard:
Look, this is all like trendy wordings, but I think a scale up is often used for a startup that has gained traction. So usually post series a, series b, which in startup jargon means once you have a theoretically profitable business model, once you've hit product market fit, and the reason you're raising money is really to accelerate the expansion of your market. And that's usually when you call it scale up and there's post product market.

Mark Graban:
Yeah, yeah. Well, thank you for, you know, Fabrice, I was also going to ask, when you talk about lean as a strategy, we can also talk about lean as a culture and a leadership style. In what ways do you share lean thinking with your CEO and other leaders within Theodo Group?

Fabrice Bernhard:
Actually, you know what? It's a really good question. How do we embody lean? Apart from saying we like it? Yeah, so first, we like it seriously, which means we've been reading books, we've been attending conferences, we've kind of launched a community of practice of other tech companies interested in lean, and there's actually a few of them.

Fabrice Bernhard:
That's how we managed to study a bit more and then we try to implement it in our own company and starts probably with Gembas. So both my co founder Benoit and I do Gembas every week. So we look at how work is being done on the ground and we have this regular discipline of observing, asking questions, learning, sometimes trying to help, but definitely not micromanaging. That's not the for micromanagement. So Genbas is probably number one.

Fabrice Bernhard:
So we do that on a weekly basis. We do leverage the help of quite a few lean coaches across the group, often in an approach which consists in having, for example, Bono and I have a monthly gamba with Michael Valley. So we'll be walking around the office with him in these occasions. He'll be doing the observing, thinking out loud, helping us see things that we don't see, helping shake things up slightly. And then there's a lot more things I could mention.

Fabrice Bernhard:
But I think what was very interesting is you could also see it in a chronological point of view. So we first started with a lean coach and what we adopted was stuff that we found completely mind blowing, but like visual management, vision management on customer value. So for example, one of the first things we did is put the voice of the customer. We would actually ask the customer, we would send a survey every week to ask them how they felt about the project. And that voice was then stored in some database.

Fabrice Bernhard:
And we start with the lean coach. One of the first things we did is actually print that and put it on the project board that the team was using to manage a project. So all of a sudden, the voice of the customer was one shared with the team, made extremely visible. And we made it even more visible because we decided that a good standard was eight out of ten. So we would put a green smiley if it was above and a red smiley, like a red sad smiley if it was below eight.

Fabrice Bernhard:
Second thing we did, I mean, very connected to that. As soon as you show the problem in a very visual way and empower the team, ensure it to the team, the next step is clearly to empower the team. So we trained them on problem solving, we trained them on problem solving and then started really encouraging a culture of problem solving with a five column paper for daily problem solving, but also dojos every week where a team would like, show their latest problem solving and the rest of the company would look at it, ask questions, make changes, and then, so we looked also at a three s. So that was a bit like the first steps in lean. And then we had this encounter with Michael Ballet, who was his amazing tact, said, this is not lean, right?

Fabrice Bernhard:
Lean is Kanban, it's Kaizen. It's much more than that. It's the whole of TPS. You're just scratching the surface. And luckily for us, we don't have stupid egos.

Fabrice Bernhard:
So what we heard was, wow, you're just scratching the surface. There's so much more you can get out of diving into lean. And so with the help of Michael Valley and other people, we've been indeed starting to spread Kanban. And what is very interesting, typically, Catherine did mention it. There's a way to understand it in the tech world, which has a few misconceptions, but they're very widespread.

Fabrice Bernhard:
So having somebody with Michael Bany's understanding of the industry and the context in which it was created, it's very easy for him to point at the misconception and say, yes, okay, you don't have cardboards like a manufacturing company, okay, this is not the issue. The misconception is the whole point of these cardboards in a factory will be to highlight inventory and lead time. And here on your digital version, I don't see lead time. I don't see. So typically, these kind of challenges will be like, okay, how can we make inventory visible on digital?

Fabrice Bernhard:
How can we make lead time visible in digital? And basically get back the benefit of what Kanban could be. Kanban is meant to solve. We also started doing Kaizen. We've tried different format.

Fabrice Bernhard:
The format that we've kind of converged to, which is very interesting, is a one day workshop. So we'll bring one of our internal Kaizen experts and take the team out of their project for a day and work on an improvement opportunity that either tackles working condition issue or sometimes even better, a deep customer value issue. Like something that is not part of the backlog, but something that typically performance, or a lot of things about performance could be accessibility, your quality in terms of making it more like making the user interface more inclusive, things like that.

Mark Graban:
One quick follow up question for you. Fabric. So you talk about going to Gemba, and you're there in the office being a tech company, is there a lot of virtual work being done? People working from home, people working remotely? And if so, what does going to Gemba mean in that context?

Fabrice Bernhard:
I mean, we continue to do gembas during lockdowns, and the fact that we're a tech company really helps. We do strongly encourage everyone to be in the same office when we're planning for a gemba. So even though the product is digital, and indeed, we all gather around the big screen and look at what the product looks like on the screen, there's a lot of stuff you see in the interactions between people, probably better when face to face. There's so many different types of gambas. I mean, we're trying to do gambas on everything now.

Fabrice Bernhard:
But I think there's like the product Gembas, typically the ones bono does, which will be about looking at the product and asking the questions, asking questions about the value, where's the value? Why are we trying to create more value? Truly understanding product and this, the fact that the product is digital. As long as you have a big screen around which you can gather as a team, it's good enough. I do gambas and code, so that's even more virtual.

Fabrice Bernhard:
And I've tried different things, but I usually start by looking at an architecture schema, which is probably the best you can get in terms of tech, of big picture point of view. And then I usually dive in a recent commit. So what has become the really widespread practice in tech is you write code and every chunk of work, typically a few hours or some people are very extreme and do every few minutes, you will package it as a commit and then push it to the shared repository of code. And so it's interesting to look at recent commit. One rule I use sometimes, I often use is I will look at the last commit that has like the word fix or bug fix in the title.

Fabrice Bernhard:
So I'll be like, oh, interesting. Let's look at the last time you encountered a bug and you did something about it. So then you can look the 1020, 30, 50 lines of code that have been written and really dive into some quality issue that the team has encountered.

Mark Graban:
Catherine, I want to turn back to you on maybe some broader themes that you touch on in the book, and I think you brought up a little bit earlier around continuous improvement and Kaizen, what does that mean to you? And how do leaders foster a culture of learning and continuous improvement?

Catherine Chabiron:
It's the key. It's the key of the thing of the matter, because the whole point of when you grow, this is why we started with the idea of scala. The risk when you grow is to run into a bureaucracy that gets very easily stuck. So continuous improvement is the way out of the bureaucracy. Not that we don't need a bureaucracy, of course.

Catherine Chabiron:
We need some finance reports, some reporting, a number of rules about how to purchase and who is supposed to purchase and what have you, or how to recruit and who is supposed to recruit and how. But the continuous improvement is the key matter, and this is where people start learning. We have a part in the book that discusses what fabric just mentioned earlier, the one day workshop on Kaizen. They have a kaizen expert, Mr. Kaizen, that comes and help teams to undergo one or several kaizens, depending on the topics that they have selected.

Catherine Chabiron:
And at the end, it's really a learning process, because he's asking people, number one, to think about alternative ways of doing things, and second, to test one, two or three of those alternative ways, depending on the time they have. And every time, it's an individual learning that comes out of it. So the point is, problem solving and continuous improvement are the activities, the daily activities that will create learning. And learning you need to be able to scale fast. Remember, this is a company that you mentioned that they're growing very fast by double digit every year.

Catherine Chabiron:
So that means they are recruiting extensively every year. Not to mention that they have, like every other company, a number of people leaving for other opportunities. So they have a permanent need to get to onboard people. And at the same time, the technology is moving extremely fast. They have no other way than learn faster than their competitors.

Catherine Chabiron:
This is the survival game. How do they learn faster? To be more effective, more competitive, to design more value, to identify new trends and so on. This is through problem solving and continuous improvement. And this is what they try to do with and on with the lead time, with the Kanban conversations with the visual management, with the discussions with the customer.

Catherine Chabiron:
By the way, Fabrice mentioned this discussion with the customer. It's not a net promoter score, that questionnaire. It's really a discussion on a weekly basis with the customer where they're going to ask the customer, is there a problem, Mr. Customer, in the way we support you? Are we going in the right direction?

Catherine Chabiron:
Are we going fast enough with the right quality? And this discussion is not always fun. It's not fun because the customer will probably tell them, this is not what I wanted, or you were late here, or you're stuck there. And sometimes it's the customer's fault as well, because we're waiting for some validation and so on, whatever. It's not fun, but they're learning through that.

Mark Graban:
And Fabrice, what have you learned around creating that culture of learning and the way it helps you scale more effectively? At Theodo Group?

Fabrice Bernhard:
Well, I think there's a consensus. I mean, every leader that has a somehow long term vision wants to create a culture of learning that's quite consensual. And the question is, how do you implement it in the most effective way? And I think TPS is a great framework for that because it's really like, there's a lot of things, there's one thing, which is you need to raise the standards. And so that's what Gemba brings you of visual know, you clarify what the game is and you clarify how demanding it is, and you walk around to check that people are not getting slightly lazier as the company scales.

Fabrice Bernhard:
So really trying to push their thinking as hard as you can, because that's the amazing thing I find about lean, is it's really this humanistic approach of saying, good thinking will create good products, and thinking is what we have as humans that is very unique. So developing our thinking as much as we can is an amazing thing. Keep connection of what really happens, but also maintain high standards. Problem solving as the constant workout that everyone in your organization practices to exactly keep the brain muscle fit, and then Kaizen to keep the creative brain muscle fit, not just solving issues, but really like, looking beyond issues, what is doable. The lean tools have been very helpful.

Fabrice Bernhard:
A three. I love a three as a way to, typically, I love it at the leadership team level, because I think it's a great way for the leadership team to get engaged together in change that is needed. It's not just a CMO who's buying a marketing software, but it's really a CMO saying, okay, this is the problem I'm trying to solve. This is the current situation, the analysis I've made and the countermeasures I propose. And then you have the whole leadership team that can be.

Fabrice Bernhard:
That can challenge stuff, but also understand better why the problem is there. Then everyone's committed with the change. That's amazing. And then more generally, I find super interesting lean concepts. I mean, Jidoka.

Fabrice Bernhard:
And just in time, but let's say Jidoka, the idea that the best way to learn is to learn from problems, but to learn from small problems, of course. So the earlier you detect the problem, the easier it is to empower the team on solving it. You don't need 20 years of experience to solve small problems. So creating the system that will detect problems very early, when they're small enough for the team to be fully autonomous on addressing them. The Andon chain, Catherine loves it because we use and on as a verb in the company, have you and have you, and early enough, but really this idea that the management structure is a chain of help, and therefore, if you had a problem, no issue.

Fabrice Bernhard:
If you had a problem and didn't end on your manager, ask for help, well, then that's more annoying. If the manager didn't know and didn't end on his own manager, his or her own manager, that's another issue. These are all these parts of the TPS system that, combined together create this learning culture in a way that I've not seen anyone offer a way to get there in a way that is as articulate as TPS has brought me.

Catherine Chabiron:
By the way, if I may add, all those gamba visits that the leaders of Theodo Group do and the problem solving, all those and ons and problem solving are actually opportunities to understand where the company is stuck. If you have to develop a strategy in terms of products, of markets, of where we're going to aim at next and so on, they need to know where they stand. They need to know the capability of the company. So each problem solving that they are looking at, each gamba visits, and each conversations that they have, tell them exactly where they stand. You cannot ask more than what people can do at a certain time.

Catherine Chabiron:
And if you're stuck at a certain level, their job is to try and develop this weakness. If I may. So all those gamba and discussions on problem solving and Kaizen and the discussions with a three that enables collaboration between different teams, all those help the founders define a better strategy because they understand better where they start from.

Mark Graban:
Catherine, I wanted to ask you about continuous improvement and how it addresses not just the scale up challenge, the scaling or growth challenge in different companies, but societal challenges.

Catherine Chabiron:
Do you mean generally speaking or in theater?

Mark Graban:
Well, either way.

Catherine Chabiron:
It'S. Know how I would say it's not so easy. Everybody thinks that they can do problem solving and continuous improvement, but it's like cycling. If you don't cycle every day. It's like sport.

Catherine Chabiron:
If you don't practice every day, you're not very proficient at it. And very quickly, you will usually try the first solution that comes to your mind. Actually, you think problems in terms of solutions, very rarely in terms of causes or conditions. So problem solving and continuous improvement kinds and whatever, all those forms of sitting back and thinking are helping people to develop proficiency and confidence and trust in their capability to change their work environment and their product, their value, and makes them far more adapted to changes so societal. Of course, once you're proficient in that, you can use them for any societal change.

Catherine Chabiron:
Clearly. For example, I know some people, this is not something we have discussed with families, but I know some teams in Theodo are discussing green code, know, reducing waste on code, that kind of thing. Because code can be very expensive in terms of energy consumption as well. So, yes, of course, proficiency can help you address any kind of challenge.

Mark Graban:
And as we start to wrap up here, Fabrice, maybe one question back to you. Why are some of the current ways of scaling a company broken? What lessons would you have for others about what they should stop doing? In addition to what they should do.

Fabrice Bernhard:
More of what they should stop doing. That's a very interesting one. If you look at the scaling playbook of the tech industry, there's, I mean, it's, it's very interesting because that's where we're getting into kind of like ethical territory, you know, because basically there's the lean strategy. The lean strategy is saying, okay, let's scale, but let's scale in a way that is sustainable, that is long term and is sustainable in terms of long term vision, but also sustainable for society. And you have a different playbook, which is the kind of zero to one Peter Thiel playbook, which is to say you identify a market where you can actually build a monopoly, and then you take that position and then you extract value out of it.

Fabrice Bernhard:
I don't like that approach because I think first that approach is like, there's something ethically wrong in saying, okay, I'm not creating value. I'm extracting value from society. And I think that's what the younger generations have been very up against, which is to say, oh, we're not confident. And when we're joining a company, that company actually has a vision of contributing positively to society. And I think that's really important and clearly not trying to extract value from a monopoly.

Fabrice Bernhard:
And then it is interesting because once you have, depending on the two visions you can have, if we decide that the world is black and white between these two, I guess when you want to extract, what you do is you raise a lot of money, a lot of money to go faster than others. You hire super senior people, and then you ask these super senior people and experienced people who've already done it before to just execute the playbook. Yeah. And I would say that there's a lot of reasons why it doesn't work. The first one is money has become expensive again, so raising billions is much less easy nowadays.

Fabrice Bernhard:
And also what we've experienced is when you hire a lot of senior people and ask them to execute super fast on playbook, you don't get the collaboration. It becomes super hard to go into what these people are doing because they're very senior. You've hired them to do the job. And so they're really asking you to not look at what they're doing. And I think that's something that, of course, you need to hire senior people.

Fabrice Bernhard:
You need that experience, but you need to be careful that you do it in a way where it's compatible with the culture, where you could still collaborate with these people, understand they will have to work with others, look into what others are doing, let others look into what they're doing and work together.

Mark Graban:
All right, well, I want to thank you both. Catherine, maybe let me just turn to you one last time. If there's anything else that you would like to share with the listeners about the book or any kind of closing thoughts?

Catherine Chabiron:
No, I think basically I'll bounce back on Fabric's word. The collaboration in a scaling company is really important. You know, the story about what we usually qualify as the big company disease is that process will win over customer number one. We didn't discuss that too much, but this is what those super experts will bring in the processes. The silos will win over the teamwork because of the bureaucracy of the silos.

Catherine Chabiron:
And again, we need those silos of expertise, as permission said. And eventually, the compliance will win over the initiative, like do the playbook and don't bother me. Right. So all those tricks are easily there when you start growing. When you grow, you grow complexity, you grow difficulty.

Catherine Chabiron:
And lean is a way to organize teamwork. Again, collaboration, daily discussion, conversations, raising questions, opening up. And this is what we need to aim at. It's not comfortable, it's not easy every day, but wow, it pays. It pays off.

Catherine Chabiron:
That's what we try to explain in the book. Yeah.

Mark Graban:
Well, I hope people will check out the book learning to scale at Theodo Group. And I want to thank our guests here today, Catherine Chabiron and Fabrice Bernhard. Thank you for sharing some perspectives. Know, I think what's becoming more common, but I think it's noteworthy when it's done well, when lean and other practices are helpful in a fast growing technology company. So great to hear your stories and perspectives here today.

Mark Graban:
Thank you very much.

Catherine Chabiron:
Thank you.

Fabrice Bernhard:
Thank you, Mark, for having us.

Mark Graban:
Yes, I should say merci beaucoup. And I'm quickly exhausting the amount of French that I speak badly. But thanks to you both.

Catherine Chabiron:
Thanks. Bye.

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