Making Integration Successful from Both Sides of the Deal

‍Text Version of the Interview

What Made Atlassian's Acquisition Successful

S.E: I think about it in phases, and the early stages when we first started talking to Atlassian and other companies as well; some of the things that we most valued were our culture, we had won awards for culture. 

Our people were really happy. We won the Fortune Best Small Company To Work For in America. And I've been through some tough acquisitions from a cultural perspective and an incentive perspective. So I was very focused on finding a culture that fits. Those early conversations and relationships were really important. 

And another thing, we put so much of our energy into getting everybody lined up behind this one big 10-year goal. So I was looking for a place where we can continue that work. 

And the third thing is the people. I want to make sure that my people who worked so hard for over five years could have an excellent financial outcome which can be a complicated part of an acquisition. 

Trying to line all those things up was a big focus for me in early conversations. When I met Atlassian for the first time, they told me about their values and culture and really good alignment to what we were doing and our values.

And one thing that was interesting on the first day we announced the acquisition, the president of the company came in and showed us how he mapped the Atlassian values to our values how close it was. 

Those may not sound like big things, but those are huge for making that journey continue in a strong way. And I think what made it work is because it was open, transparent, and collaborative.

In the early stages, Atlassian made sure that I met anybody I wanted to. They gave me a lot of access to their people, and they even let me talk to CEOs who had just gone through an acquisition with them. They let me ask him anything I wanted, and that was super helpful.

One of the things that the M&A team did was map out where the people and the products would go post-close. And I was impressed with all of that planning. We had some idea about what would happen in other acquisitions, but they'll figure the rest out later. 

Another thing that they handled well was the CEO, like myself. CEOs have been making all the decisions. How do you bring them into a company that already has a CEO? And they were very open and transparent about their plans. 

They wanted me to have a career in their organization, and they wanted me to run a part of their business. And that I thought was super refreshing. That's exactly what I was looking for. 

And then, at the late stage, when you start getting into the thousands of details around how to put a deal together, they refuse to do an earn-out because it wasn't very agile. And I fully agree because the business will shift, we'll learn, and we don't want to be fixed on a goal that may not be best for the business. 

Plus, the open and transparent term sheet. Atlassian publishes their terms sheet for another entrepreneur to see. That's how they operate.  

On the post-acquisition side, I love the way we married. Most M&A team hangs around for a few months and try to make sure it's transitioned, and then they're off to the next one. 

The team here was smart enough to realize it would take 18 months to get this thing integrated well and off and running. So they were in it with us, we're going to learn as we go, but we're going to learn together. 

So just looked at it month to month, looking at where problems are popping up and solving them in an agile way. And the best evidence that it's working is, I'm still really enjoying my work and having a ball here. 

Making Integration Successful

S.E: We took a realistic look at resourcing, and we did an excellent job of thinking about what we need in terms of human capital. The integration team made sure that we got the right amount of headcounts and extra resources, especially in the first 12 months, to make sure that we were scaling healthy. 

They took the long-term view and over-invested in the first year to ensure success in the third year. That helped us get off to a good start. And then the rest of it was Atlassian's toolset, which was good for making sure that we had transparent communication.  

So keeping it very open and having a long view were some of the key things that made the integration get off to a good start. And also, we kept the cadence. We didn't stop at six months because we know there'll be new growth challenges as this thing scales. We stayed longer than most, in my experience. 

Creating an environment that fosters success for both sides

C.A: I think it all starts with that long-term view that we have. There is a reason why M&A integration is not my title. It is Strategic Operations because we want to look at these acquisitions in more of a partnership mode and help them stand up their operations and grow roots in the company long term. 

So the first is having that agile and adaptable integration approach. When we acquired AgileCraft, it was meant to be a more difficult acquisition than it was. There were a lot of complexities and differences in the deal, so what we did was fix our mindset. 

But once we were more open to change and accepted that they're going to help us establish new processes we've never had, we were more okay, and we were able to adapt and be more agile in our integration approach. 

The second is, we try and immerse ourselves in their culture. We try to learn the people, understand the challenges of the business. Help them navigate and even advocate resources or alignment and things that need to clear the path for him and his team to succeed.

Immersing yourself in their culture and not being bombed to a fixed timeline helped us adapt to their needs and what they needed from us. As long as I believe I can continue to add value to the deal, I'll stay.  

Part of that is also our product set. So Atlassian's product set is about managing work in information, and our mission for the company is to unlock the potential of teams. 

When they come in, and they're using the products that we sell to the market, we can share information freely and make decisions quickly, which has helped build a lot of transparency and trust. 

I think it was too much information for them initially, but once they got through the initial hurdle of learning how to use things, it really helped accelerate their onboarding.

And with that focus on tools came with a focus on people, which is the most important part. So we, as an integration team, had a leadership kickoff weeks before the deal even closed. We brought all of our functional leaders together with their counterparts in JIRA Line and just started to get to know each other for a week. 

Now is their time to get to know Atlassian a little better so that they can start formulating a vision of how they will be successful together and start formulating the OKRs, even before the deal closes. 

S.E: One thing that impressed me is their commitment to learning the new products. You would expect the M&A team to learn about the product they're acquiring, but then we had two-week boot camps after the acquisition. 

We book partners through, which literally trained them to fully configure, implement, run, and train on the product. Just that level of immersion into what we were doing was impressive to me. 

Driving a collaborative environment

C.A: At Atlassian, our operating model is by default open. We designed our products that way. So Confluence, which is our information content offering management system, is by default open. 

Any page you create is open for anyone to see. So that helps me pave the way for how I design our integration strategy overall. 

Two, we're very much an open and sharing culture, so that helps. But I think also we got a little bit lucky with JIRA Line because being an agile company, they were pretty oriented to be agile and transparent and open.

They were open to us partnering together to develop the actual plan and the details around that.

Steve was also a part of the steering committee with all of the functional heads of sales support, the deal sponsor, etc., which was great because I found out that helped clear the way for a lot of quick decision making, which is also an agile pattern and very quick alignments. 

Getting Alignment Between Acquirer and Acquiree

C.A: One thing that we did new with JIRA Line is a tight handoff between our deal team and the integration side. So it's almost like translating the deal model into an operating plan. 

• What are the revenue targets we need to hit?
• How much are our partners going to contribute to bookings?
• How many quota-carrying sales reps are we going to have?
• How much is the headcount going to grow? 
  

All of these things in the deal model were translated into an operating plan. This became a set of OKRs metrics, and then also walked Steve and his team through it. Setting very clear measures of success for the integration team really forced alignment because people knew what the goalposts were.

Enabling an Iterative Live Plan?

C.A: We have playbooks composed of Gameplans and Plays. 

So we have Plays for any given process. Whether it is integration or systems integration, that would tell us how we're going to get from A to Z. And then, based on the Agile Craft acquisition, we had pulled together a series of plays to become that game plan. 

With Agile Craft, it was a little different than some of our other acquisitions. They were creating almost like a net new part of our business model, so we defined a lot of that for the first time.

So we just had a lot of a tight collaboration with them, and they were helping to define our future vision together. We had a good governance structure at the functional team level that then rolled up to our overall integration leadership team. 

Tools to Improve Communication

C.A:

• JIRA to capture our OKRs and some of our technical work. We're in the process of transitioning to JIRA Align for our company-wide OKR management, and we'll eventually move there to our whole portfolio management.
• Confluence is for creating all of our documentation and dashboards for company and project progress.
• Trello is for the lightweight teams that are tracking less complex projects. 
  

Agile Craft for Managing Integration

S.E: It takes all the work happening across the organization and tries to map it to the outcomes you want to achieve. So taking your OKRs or your goals and making sure that the work that's happening is lined up towards one of those goals. 

The idea is, if we can understand the correlation between the work we're doing and the goals we have, we can halt, pivot, or persevere on that work much faster. Its enterprise agility is what we're trying to help companies get to with the aligned product. 

Does Culture Change During Integration?

S.E: We were already in an agile way of thinking, and the whole planning process was never set in stone. We're going to learn. We're going to go out, take every hypothesis we have, and validate it as fast as possible. And then the work will fill in from there. But It became a lot more powerful as a construct as a large public software company.

As a start-up, some things are just much easier. Moving into that matrix organization, those Agile practices of how we think about planning became a lot more powerful because we needed them to survive with that level of information flow. 

Agile Techniques Improving Integration

S.E: So those techniques are looking at everything with a hypothesis and a learning approach. It's perfect for integration because integrations never go exactly the way you think. When you acquire something, there are many moving parts, so it's a prime candidate for agile thinking. 

It's tough to just set in stone because you will always learn something new in the process. 

And having an agile mindset and that way of planning gives you enough flexibility for those things that don't become showstoppers that frustrate the team because they can't get anything done. 

All those ways of thinking that we brought helped us integrate.

Mindset over Techniques

C.A:  Whatever tool you have, if you don't have willing participants and people that are open to that type of working model, it's not going to work. 

Other acquisitions that I've been a part of where they're not used to open feedback, open discussing, where they don't see the value in trying to bring openness and alignment amongst teams, those acquisitions do not go as well on the integration side. 

People need to get into the mindset that they need to care about their function and understand what they affect around their world and how other teams are affecting them. 

M&A Gameplans and Plays

C.A:  The one that helped JIRA Align is the standing up of our whole go-to-market process. 

So we needed to build a game plan because we're acquiring a company and a sales-led company whose largely targeted enterprise customers.

And so we created a play, a series of things, set teams in motion for standing up a deal desk. Making sure we got accounting lined up with sales, operations lined up with legal, made sure we're ready to take orders, and started pumping them into kind of our back office. 

And then at the same time, the team that is focused on sales in that fiscal quarter going forward is already starting to build the enablement plans, aligning all the target customer accounts, and starting to work with the channel of what partners we could have. Start working on getting them trained on JIRA Line.

All of that was happening in motion, but those are things that we have created as individual plays and strung them together because of the situation that JIRA Line was in and the specific goals we have for the integration.

Another Play that we used was the leadership Kickoff play that we also developed with JIRA align. 

It's not always possible, but if we have some buffer between sign and close. We had a couple of weeks there to bring the leadership teams together and bring more people into the tent than what we have.

So it was only Steve and maybe two or three people while we were going through diligence that was involved on his side. But as soon as we signed, we could bring in the rest of his leadership team and start to meet with their counterparts. 

That is a play that we now deem as best practice. If you have the time, you should start to build those relationships early because that just pays dividends down the road and that feeling of trust and relationship building. 

How does Plays Improve Integration?

C.A: We're getting faster, and we are building more trust. Also, the plays have been a good way for integration to identify other parts of the company that we can help improve. And then that feeds into those team's roadmaps and then future plans or enhancements and evolution.  

Adaptation of New Plays

C.A: We're not as formal in that process. It's just fluid; it just happens. My team knows that acquisitions are a key growth strategy of Atlassian, so they know there need to be investments.

They've seen the benefits that having these things predefined can help accelerate team success and smooth out some parts of the integration.

Biggest Lessons Learned

S.E:  I think we probably underestimated a bit how challenging it would be to come into a flywheel-type business with an enterprise piece of software and do business. 

I thought business model-wise, I thought we would be able to make the changes we needed to make to go faster than we were going. And probably for the first six months, it was harder to do business than it was before. 

Because there's just a lot of details, just compliance and legal and security, there's a lot of things that were just different. I underestimated it. I knew it'd be a process.I wasn't completely naive, but it was a bigger process than I thought. 

But it was a good learning experience going forward. I think most of those changes on both sides are healthy changes. That's probably the biggest one that comes to mind for me.

C.A: One that we're still wrestling with a little bit is the broader strategy alignment across the company. We talked about how being an agile company sets in motion different teams to go chase after and accomplish the goals and what's right for their customer set. 

And I think because we've been so inquisitive and we're constantly changing conditions, I didn't fully appreciate how challenging that would be in the midst of integration, while other teams are still running a hundred miles an hour. 

So I think that's something that we will probably build more plays around and a new set of game plans around. 

Traditional vs. Agile Framework

S.E: It's more on the mindset. On my other prior acquisitions, there is always a list of things we will do. Whether it's during diligence, after diligence, and after closing. In an agile mindset, we were fluid. 

Even before the deal was done, we talked about branding and what we name this product. It was very less structured, and I was getting to work with many marketing and product leaders. We felt like we were already together even before the deal was signed. 

It's a mindset. The tools or practices are just the enablers of the mindset. We spend less time thinking through the process and more about how to achieve results. 

C.A:  I think transparency and then also just having those clear goals upfront. 

So we took the top-level deal goals and broke that down into the major release and then broke that down into work. In an Agile approach, we don't work in silos. Our cross-functional groups meet daily; we're meeting weekly and just starting to break down that work.