THE BOTTOM LINE: For over 14 years, Theodo has explored what it truly means to apply lean thinking to software development — beyond agile frameworks. Its journey began with a failure that revealed the limits of blindly delivering what clients asked for. From there, digital delivery was reframed as a learning system built on visibility, problem-solving, and shared responsibility. By bridging agile with lean, Theodo scaled from two people to 700 while preserving autonomy, quality, and customer focus. Learning is embedded in daily work through kaizen, dojos, and strong visual management. As AI accelerates change, Theodo continues to rely on lean to scale quality without losing its human core.
Scaling a software company without sacrificing agility, quality, and a learning culture is rare; Theodo’s experience offers one of the clearest attempts to do so using lean thinking. Over the past 14 years, the company has been exploring and framing the debate around what it takes to apply lean in the tech industry, well beyond the adoption of agile methods.
In its early years, Theodo worked like most tech companies out there: delivering exactly what clients asked for, through rigid plans and fixed requirements, and quietly absorbing the frustration generated by delays and rework. Their lean journey began when a failed project made them realize that their job was to prescribe the right way of working, not simply executing instructions. Theodo began to see digital delivery not as the execution of predefined solutions, but as a learning process that demanded visibility, feedback, and shared responsibility for outcomes. What started as a turn toward agile methods soon evolved into a lean journey, focused on building trust, making problems visible, and developing the capability of teams to learn, adapt, and improve together.
Theodo has scaled from a company of two people to a company of 700 (and from $1 million to $100 million) by bridging agile with lean thinking. As outlined in The Lean Tech Manifesto,i they see lean as the only way to turn IT into a system for value creation, autonomy, quality, and continuous learning — and the only way to leverage the benefits of agile at scale.
According to Fabrice Bernhard, CTO of Theodo, there are five pillars to the company’s approach to lean tech: value for customer, tech-enabled network of teams, right first time, just-in-time, and building a learning organization. This kind of language is not commonly used in tech firms, and that’s precisely what makes Theodo’s story so powerful: the company represents a bridge between lean thinking and the tech industry.
As organizations scale, teams often lose sight of who their customers really are. When engineers no longer understand why they are building something, the opportunity for creative, high-value solutions disappears. Part of the answer, according to Fabrice, is to reduce complexity by defining clear end-to-end value streams (tech-enabled network of teams), and to make customer value visible and shared across the organization through strong visual management, such as using an obeya to post and frenquently review critical measures like value for the customer.
Or you can stick to the bureaucratic alternative that typical SAFe [scaled agile framework] programs do very well: create multiple layers of product management to translate leadership intent into feature roadmaps for disengaged software engineers to execute — and pray your competitors are doing just as badly,” he wrote here.
In this Planet Lean article, JR Beaudoin, CTO at 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 PISCAR [“Problem, Impact, Standard, Causes, Actions, Results”—a seven-step problem-solving framework that combines 5 Whys and 7 Wheres].
Lean problem solving shifted our mindset from trying to maximize the team’s speed to trying to maximize the value it brings to the customer.
When it comes to the pursuit of quality, the Theodo team is meticulous. Earlier in their lean journey, for example, they applied the “red bins” system — commonly used on the factory floor — to their coding work. This system ensures that no defect is left undetected and unfixed. No error is allowed to make it past the part of the process that generated it,” explained Marek Kalnik, CTO and cofounder of Theodo Apps.
More recently, after the publication of the book The Toyota Way of Dantotsu Radical Quality Improvement,ii the team even experimented with this much more elaborate and radical approach to quality. Woody Rousseau, CTO and cofounder of Theodo Fintech, said:
There is no shortcut to reach high levels of quality. As a CTO, this makes me want to raise the quality bar in the whole tech industry, where bugs are viewed as unavoidable time wasters. ‘Zero bugs’ is the true way to go!
To truly become a learning organization, Theodo strives to build learning into the work itself. Teams are trained to treat real problems as learning material, using structured problem solving on live issues instead of classroom training or abstract best practices. Regular dojos create a shared learning ritual: teams bring current problems, analyze them together, and are challenged by peers. As the organization scales, learning doesn’t stay local: teams working on similar challenges connect through communities of practice (guilds), using kaizen as a common language to refine their capabilities and share solutions across areas or geographies. Most importantly, learning is considered a leadership responsibility at Theodo: managers are expected to create the conditions for problems to surface, coach teams through them, and ensure insights are captured and spread.
In this article, Ben Ellerby, Partner at Theodo, said: “The companies that will succeed in the uncertain and fast-changing times ahead are those who invest in empowering their developers to work in a lean way. Applying a framework like scrum and saying you’re agile is no longer enough. Bringing lean to software development means to take the transformation to the gemba, changing the way developers think, write code and build features, and establishing a learning culture that enables continuous improvement.”
Even as AI takes the world by storm, the organization has not lost sight of what it considers its real competitive advantage: a system for developing people. In fact, Fabrice believes artificial intelligence is widening the gap between organizations that have such a system and those that do not.
A key concept for them is jidoka (automation with a human touch): scaling AI only works if quality is built in from the start. Getting to 80% accuracy can take minutes, but reaching 95–97% requires real effort, discipline, and time investment — especially when systems scale to hundreds of similar components.
In his presentation at the Lean Global Connection 2025, Fabrice said:
Lean is an amazing compass when navigating a tech revolution. Instead of thinking about AI to eliminate jobs, organizations should leverage lean to find and tackle the big problem they can solve using AI.
For Theodo, the big problem is that software is now everywhere but that it sits on crumbling legacy IT systems. In recent years, the company has specialized in leveraging AI solutions to modernize such systems. Thanks to its lean approach to AI, they can do so three times faster than before and with better quality architecture. This is how Theodo is fulfilling the promise of tech while staying true to its lean ethos.
Fabrice Bernhard will deliver a Learning Session at the Lean Summit in Houston on March 12-13.
2026 Lean Summit
The premier leadership conference shaping the future of lean management for every business.
