Dantotsu: "Agile" tech startups weather crises better

Julie's question

Whether we like it or not, crises have the power to make things happen. Recently, we have witnessed a succession of more or less catastrophic phenomena (pandemics, wars, environmental concerns...) which clearly show us where the problem lies, undermining most supply chains and questioning the survival of the established system!

We must certainly learn from this and reshuffle the deck. Why would Nomura-San's Dantotsu be the way forward? How could it help us in the current situation?

Sandrine Olivencia's answer

Crises don't only benefit tech startups: the Covid crisis indeed benefited those who were able to ride the wave of telecommuting and successive lockdowns. But many of them also suffered from the fallout: a much higher employee turnover and thus a loss of knowledge and productivity, difficulty to get people back to the office once the lockdowns were over, a war for talent to rehire after the crisis... and this was coupled with a generalized drop in demand typical of big crises. They have had to tighten their belts and rethink their priorities: the race for rapid growth supported by huge amounts of funding seems to be a thing of the past. Investors are slowly changing their tune and are asking for much more than just a good story before investing: they want guarantees that the companies can make money in the long term without spending too much.

Some of these companies have taken the opportunity to think about growth strategies that are not only focused on speed but also on efficiency, to satisfy these new constraints and to better face crises. The managers of these companies have understood four things:

1. non-quality is the most important factor in slowing down and it was necessary to have a real clear strategy at the level of the whole company
2. that quality was not an end-of-the-pipe activity to be delegated to an external entity, that it had to be integrated into the entire process
3. that it works better if people themselves are able and willing to identify their own defects and resolve them immediately
4. and that all this was only possible if the bosses themselves were fully committed to this initiative and if they took the managers with them

The CTOs and founders of tech startups that had already embraced Lean, such as Sipios, Hokla, or Ocus, found Nomura-San's Dantotsu radical quality approach to be a convincing way to get technical teams on board with continuous quality improvement, accelerate deliveries, and support growth. Which is a small revolution in the world of tech startups! I recommend the article by Woody Rousseau, CTO, and co-founder of Sipios published on the American website of the Lean Enterprise Institute. I also recently published an article on Dantotsu in Tech where I describe the total quality approaches started at Hokla and Ocus.

But this Dantotsu radical quality approach is not always so easy to implement in tech startups, and for good reason. In the software development world, there is a belief that there is no such thing as a bug-free product, and that "zero bugs" is a utopia. That it's better to go fast and then fix it. This is not true, and these CTOs/founders have understood this very well. Fixing costs more and takes more time. Non-quality is present everywhere in the company and considerably slows down its growth: every time a customer complains, a piece of code crashes, a test doesn't pass, I have to redo a task, a spec is incomplete, etc... it has an impact on the deadlines and the teams' productivity. Ultimately, this impacts customer satisfaction and therefore sales. It also has a strong impact on operational costs and therefore on the company's profitability.

Many startups break their teeth on this misconception every year. By neglecting quality, they get into a vicious circle where they don't have enough cash to cover all the development costs because they are stuck in non-quality. In times of crisis, these startups run out of steam and lose ground faster because more "agile" companies quickly overtake them. Here I'm talking about agility and not Agile invented by IT developers 20 years ago. It's about the agility of the whole company and its ability to deliver products and services quickly and efficiently, no matter what quality issues employees have to face every day. True agility is based on a solid culture of visualizing and solving quality problems throughout the company. Problems are visualized through the implementation of company-wide Kanban systems. Problems are solved by setting up support and mentoring chains at all levels. It's all organized and driven by the bosses and managers. That's really what we're looking for to make rapid and sustainable growth with Lean and to better weather the many crises throughout the life of a company.

This story was originally published in French by Sandrine on leblogdulean.