“With Digital, Lean finally reaches the CEOs” – An Interview with Cesar Gon, CEO of CI&T

cesar gon CI and T

Cesar and CI&T have been a regular speaker at the Lean IT Summit. It has been a stunning experience to witness the incredible growth of the company he has co-founded. CI&T is a digital services company born in 1995. With more than 2500 digital business strategists, designers,  and engineers in the USA, Brazil, UK, Australia, Japan, and China. Cesar has led his company to some spectacular results with essentially one vision in mind: the translation of the lean principles to Digital.

His talk at the Lean Digital Summit Lisbon 2018 has been no short of sensational. There were many ideas to take away, but the most impressive is this one: with digital, we are not only talking to CIOs and CTOs, but also with CEOs and business leaders

Cesar has been kind enough to allow us some time for an interview.

How did it all start?

I’m a computer engineer. When I finished my masters, I created my company. Initially, the goal was to finance my Ph.D. It was back in 1995, the start of the internet. I had this vision that we were in a fantastic time of opportunity in the IT world. My first motivation was to create a long lasting company. So when the business started to take off, I gave up the Ph.D. idea to focus on CI&T.

How lean came to your mind as a strategy for your company?

In 2006 we expanded CI&T to the USA. We were still a good old waterfall CMMI company. We had processes and dedicated functions. Back then we were about 350 people, and we were doing very well. However, Yahoo!, one of our first clients in the USA, pushed us in a different direction.  After a visit to our offices for Gemba walks, they fell in love with our energy and know-how, but they weren’t thrilled about our CMMI-compliant process. I think they felt that would slow them down considerably. They offered us to experiment with Agile. The said, “We’ll take 20 of your guys, train them and do an Agile experiment.” Six months later all of us were impressed with the results: productivity, quality, team satisfaction and, more importantly, customer satisfaction. We were familiar with Agile, but we thought that it was not for us. At this point, after the experiment, we wondered: why did it work for so well?

As always in our history, we don’t like to have unanswered questions, so I went on to find an answer on why Agile worked better than our highly predictable processes. That led me to speak with Embraer, the airplane manufacturer. A person there told me to take a big look into Lean.

So in 2007, we built the CI&T production system inspired by the Toyota Production System. As we moved more and more teams to the new way of working, we started to see results like the Yahoo! experiment across the board.

However, contradicting the lean principles, my leadership team and I were still pretty much in the command and control approach. There was a disconnect between leadership and the agile teams. I had an epiphany during an informal drink while discussing with an agile coach. He said to me: “if you remove the managers, we will be able to scale the offering. Managers ask the wrong questions and are looking at the wrong metrics.” That was when we started wondering how lean could become our management system.

A pivotal moment for me was when I met John Shook. We started to do some training with him. I loved it and kept on coming back for more. So in 2010, John asked me: “Why are you doing this training for the third time ?” I said: “John, I still haven’t figured out how to use Lean to solve my problem.” Then John told me the most important thing I’ve ever been told: “Cesar, you have to stop learning and start doing.” He gave some advice about Hoshin Kanri, (Refer to Cesar’s talk from Lean IT Summit 2012 where he discusses this Lean strategic planning approach) and he said: “Maybe you should also start to do some A3 thinking.”

In 2010, the Lean Institute Brasil started to help us to practice lean thinking, and that was it: we were on our way to implementing Lean as the strategy for the company. Fast forward to 2016, and we had dozens of CEOs visiting us in our campus to learn more about our way to deal with Digital.

How can you tell they understood what Lean was all about?

They came to us to understand how we managed to scale Agile. Most of those companies had tried to some extent and failed. So Agile and Lean weren’t necessarily new to them, but the way we put everything together, especially with the leadership mindset shift, was very unique. They saw how we worked with the visual management, the problem solving, the discipline to think deeply about issues before jumping to solutions.

For those CEOs willing to experiment, we did joint Hoshin sessions. They were astonished by the level of engagement of their executive teams. We achieved in two weeks what would’ve taken them six months. We have infused Hoshin with Design techniques, which remove a lot of the burden of traditional strategic planning and boots collaboration across hierarchies.

For me, it was particularly rewarding to hear from the CEOs that coming to us was a turning point for them.

How did lean digital become a CI&T service offer?

We are value oriented; it’s just part of our culture. The first engagement took 300 people from CI&T to help a big bank to change the way they manage initiatives, deliver 10x faster, and develop leaders. We saw this as a new service we could offer to other companies to help them leverage Digital. It resonated so well that led to this change I mentioned before: now we are talking to CEOs. In the last two years, we had 86 CEOs coming to us to ask for help with Digital.

During your talk, you presented the funny “digital transformation playbook” with activities like ‘Silicon Valley visits,’ training teams in Design Thinking and Agile, revamping office coolness, running innovation challenges, etc. How would you explain that these still get traction while not delivering much value?

The truth is: digital transformation is not a consultant-led journey, it’s an executive journey. The easiest way is to try recipes, because having your executives embark on a transformation journey may be painful. Back to John Shook and NUMMI learnings, you have to change the way people work so that you change the way they behave. Shook’s pyramid is a universal truth that explains why those gimmicks will never work.

How do managers in these companies you help, take it that there are so many people from another company coming to implement the change?

There can be much unsafety. We will propose changes to the organization with Squads and Value Streams to help multi-disciplinary teams focus on the value they deliver to customers. We can minimize the negative feeling by starting with one or two value streams. Then when everyone acknowledges results and feel safer, we expand and introduce more changes. We call it camp by camp strategy.

In the talk, you mention that rather than looking at Toyota, lean digital companies should be looking at Amazon instead. This was an interesting point of view, and I have a question about it. First, the core problem Toyota was solving that spawned their production system was that they had no cash. As Scott Galloway explains clearly in his book “The Four: the Hidden DNA of Amazon, Facebook, Google and Apple”, Amazon is loaded with cheap cash. Second, Werner Vogels, Amazon CTO himself, recommends in in this article to look into Toyota kaizen approach to build software factory. How would you explain that you recommend looking at Amazon while Amazon CTO still recommends looking at Toyota instead?

Well, that’s exactly my point: if you really want to transition a big corporation to the digital century, it’s better to pay more attention to Jeff Bezos, Amazon’s founder and CEO than his CTO. Of course now Amazon is loaded with cash. But look back and compare the journey of these four big digital powerhouses (Amazon, Facebook, Google and Apple) and you are probably going to conclude that Amazon had, by far, the most scarcity and implausible journey of them all. And they succeeded against the odds because Bezos is a fantastic lean digital leader. The CTO of Amazon is mentioning Kaizen because he knows the power of the lean tools. I don’t see a contradiction, as all the lean tools are directly applicable to any software development entity. My point is that the inner workings of the digital natives, like Amazon, offer us a unique perspective about the ingredients that were missing in the Toyota Production System. Traditional companies will need to change their cultures to act more like the Amazon’s of life. Our translation of the TPS to Digital is one of the possible paths.

You and your company have been in your own transformation for twelve years now. Why would you think that Lean is so relevant in the digital transformation?

Lean is a very powerful framework for changing a culture. Digital transformation is ultimately a cultural issue. I see Lean connecting in such a powerful way to culture changes thanks to its practices. It is a game changer.

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