Evolving Your M&A Integration Function

Text Version of the Interview

Going Completely Virtual

Atlassian announced last year in the summertime that we are pivoting to be a remote-first company, and that means that everyone has the option, whether or not, to go back to the office when the office is reopened. 

It changed where we work, but not how we work, because we were already a highly distributed company. Our headquarters, our official headquarters, is in Sydney, Australia, where our co-founders are. And we have a large presence in San Francisco, in New York, Austin, the Netherlands, and India. I think we are in over 13 countries now. 

Luckily, the products that we sell, which we use actively in the company, really help us and enable us to collaborate and work together already in a virtual setting. So it hasn't been a significant mindset shift for us as it is not going to the office and just being more social with each other. 

The biggest impact of this change is that we've not been asking people to relocate in the same way that we had been before.

When we had smaller teams, part of an acquisition, we would ask them to relocate, either closer to an office where Atlassian has a larger presence. And so now we're focused more on trying to make it work across the globe. 

And we're focused less on being in an office versus being just in a time zone where you can work well and collaborate well with other teams, as long as you have a few hours of overlapping time together.

But that doesn't always line up perfectly. In our most recent acquisition, the teams that are working together have no time zone overlap. So we're plotting how we can leverage teams in-between time zones to be the conduit of the two teams. 

And we're doubling down on how we use our tools and technology to help pass the information along, keep everyone informed and aligned, and make sure that we've got well-coordinated work together. 

Diligence Process

We manage our entire diligence process using four key tools. First is Confluence, our own Atlassian products.

Confluence is our internal corporate Wiki. It's the place where all of our documentation lives, like how people may use Google docs or word docs. It's a place where people just capture ideas or thoughts. We've used it for every asset in the diligence process. 

• Creating our overall list for the people that are disclosed in the deal
• We use it for our deal team to write the business case. 
• We use it to manage our diligence schedule.
• We use it for our diligence questions and analysis and all of our writeup. 

And every functional team in our Confluence space has its own kind of subsections where they can map out their diligence plans, but more importantly, share it with each other. So if someone goes into a diligence session on Monday, the team going in on Tuesday can read what the first team did, their questions, and their findings. 

That helps them get a little smarter going into their sessions, maybe finding things that they can double click into and also help not to repeat certain questions or topics they covered. 

The other thing we use is JIRA, our flagship product. Our customers typically know and use it in a software development context or by technical teams, engineers, and product managers, typically working on development projects to manage their work. 

And we're pushing the envelope of how we're using it in a business context setting. The concept is that we're planning the work, planning the milestone, capturing all the decisions that need to be made.

We're finding issues in an actual central system that everyone can use and understand how all the pieces fit together. And that makes it highly collaborative, in the way that teams can plan together. 

Then also, all of the output from our work is there for the next deal team to use. And it helps make them smarter and gives them an excellent foundation to build off of. 

Slack is our chat tool of choice. We have a different Slack channel for every area of diligence. We have one focused on sales, marketing support, and R&D. And then we have a diligence channel where everyone is invited and can see the latest news and updates and information that's being shared out. 

This helps us with our global reach and make sure that everyone feels they're part of the right conversations. They can see questions being asked amongst colleagues and then keep them informed so that they have the latest and greatest information readily available when they go into their next set of meetings.

And then Zoom. Everything we do is always pre-recorded, always shared, always well-documented so that we can pass over to other teams and have artifacts that we can go back to pretty quickly.

Are they all connected?

Yes. Our whole work plan is in JIRA. In JIRA, we have links to Confluence pages.

The Confluence page might be the long forum design or explanation or analysis or research that supports that deliverable captured in JIRA. And then there may be links to Zoom recordings in there as well. And then, as people are updating things, the conversation could be happening in Slack. 

So it can be a little daunting at first when you are learning the dance. But once you get it down, it's been pretty effective for us to just move really fast and have a very agile team. 

Is Onboarding Faster?

When we bring people along, they're very appreciative that there is so much information that they can sit there and learn everything quickly. But it's almost an information overload that can overwhelm them. So we're trying to get better at synthesizing it into something in more bite-sized chunks. 

But I'd say the pivot to having a more systematic approach and using tools and technology is not easy. We've tried this in previous deals and just have fallen flat. Often, we were trying to fit our process to the technology and what we realized is, you can't fit M&A into a software development life cycle.

And so the only reason why we've been successful is that we really started from scratch. We hand configured our own JIRA to fit the deal flow, the integration flow, and how we sequence and structure our work.

So once we started doing that and spoke our language, we began to see the light bulbs go off. Especially people on the business side are very easily overwhelmed with these technologies, but once we explained it to them, they were very happy with it and started using it.

The biggest unlock for us is when this mindset shifts to open and real-time collaboration. We think about how quickly we've built this integration muscle at Atlassian because the culture was already open and collaborative. 

Engagement with the Acquired Company

At first, we thought it was easy and that all we had to do was zoom call, and then that's it. We didn't understand the impacts of not having people come together, showing their support, feeling that energy, starting to build those relationships and connections live.

We didn't understand the impact until we saw some of our earlier acquisitions; people still felt a bit disconnected from the rest of the organization even after a few months. 

So now we're trying a better way of engaging with them. We've opened up our tools more, like our Slack channels. 

We have a couple of Slack channels that we'll have with them as part of the diligence process to get that communication going since we don't have days or weeks that we're spending together in diligence. 

We will also open up our Confluence pages to them like Confluence and Google docs pages.

And we will start to cope or collaborate on things like their customer announcements, their employee announcements, all of the things that we might've typically just thrown over the wall to them. We try to do that now together and in real-time. 

Alongside that, we also have daily check-in calls with them over zoom where we're making sure things are flowing the right way, they're feeling good about the process. And that for us has been helpful to build that relationship with them early on.

On our latest acquisition, we announced to their employees about a week before the deal closed. The CEO led by thanking the employees for their hard work, and then we led into a pre-recorded video by one of our co-founders and CEO.

He couldn't be there, so we recorded a video for him to welcome them and really acknowledge the two companies' shared kind of culture, passions, and missions. And this makes the people feel great that the co-founder CEO took the time to welcome us.

And then he handed over to another product executive that we had, the executive sponsor of the deal. Luckily she was in the time zone, so she could join live welcoming people. And then we had two more speakers after that. 

But what we really wanted to do is make them feel excited about the possibility of joining Atlassian and see why we were two compatible companies and employees, groups that were compatible and could do great work together.

And we left it at that and gave them a day. Typically, it would have been buzzing in the office, but they didn't have that, and we wanted to give them space. This is where all kinds of reactions will come out; some people are disappointed, some people are very excited. 

And then, we came back and asked them when they wanted us to plug them in and share the high-level integration plan with them. We realized that people don't care about the integration plan. They just want to know if they still have a job. 

So we gave them a little more time when their ears have stopped ringing, and they will be able to digest more. And that's where we shared a little bit more of what the org chart will look like on day one. And the high-level goals that we're working towards. 

That way, it sets us up for building trust. They know Atlassian has a plan, but they're going to be part of those conversations to really help map out that plan together. We don't want to show up with a fully baked plan on day one. We want them to feel we're sharing as much as we can. 

And then the actual deal is closed. This whole time, no one in Atlassian knew about the deal except for the deal team and whoever was part of diligence.

And we announce by sending out a company-wide blog welcoming the acquired company. We post to our website to let our customers know they're sharing with their customers.

And then the following day is Day One. The official day one with Atlassian. And so we have our other members of our executive team joined like our chief revenue officer and our chief administrative officer who's head of legal and HR, 

And that was just a way to say congrats, not having any slides, not having an agenda. All it was a virtual toast. And it's a great way to sprinkle in more executive engagement. They got to know our chief revenue officer and what they do, also our chief people officer. 

Overcoming Knowledge Chasm Between Diligence and Integration

One is we dedicated more M&A roles across the company. People that are purely dedicated to M&A one hundred percent. We've got 13 people in the company who have an M&A in their title. So as a company, we've embraced and invested in it. 

So now we have IT,  finance, and legal, so we've got a lot of key roles in the functions across the company. Every deal, regardless of whether it's a product tuck-in or a whole new business we're acquiring, these are commonly the teams that we partner with on every deal. 

So I think that has been big, having people deal with deals and building that knowledge, they recognize the plays they need to do. 

And then the other thing that we've done is going back to our products and tools using that to be very open and collaborative; it's hard to have a knowledge chasm when all of the work is out there. It's more about finding it and knowing what's relevant.

Any other approaches?

Other approaches that we've used are that we've pivoted from focusing on the functional integration to focusing on the cross-functional workstreams that support the goals of that acquisition. 

For example, I don't want to know what's happening in the integration of payroll or facilities. Still, I do want to know how the whole integrated employee experience and integration are going. 

And that experience has to be in support of the acquisition goals. In some cases, it's building a new product; in some cases, it's just growing their business to more revenue. So it depends. 

How Early Do You Implement That?

We start forming that in integration. And I suspect that we will begin to pull that up a little more into the diligence process. 

We have not because we want to do a deep dive in each of those areas. And sometimes, with the cross-functional pieces, you focus more on the top layer, which is not suitable for diligence.

So we typically kick off the cross-functional workstreams as part of integration planning and integration planning, we usually kickoff before the deal closes. 

Diligence and Integration Overlap

Definitely! The 13 folks that I mentioned are dedicated to M&A; they're typically in diligence as well as integration. 

And they will have maybe some specific subject matter experts that are supporting them in diligence, but maybe a different set that are supporting them in integration, 

There's some continuity. I don't think we have any cases now where there aren't at least two or three people providing continuity. 

Integration Process 

Aside from doing a cross-functional kickoff before the deal closes, we'll also do a kickoff with the acquired leadership team. We'll talk with them about what happens in integration at Atlassian. Walk them through at a very simple level because at that time, they're still really overwhelmed with their day job going through an acquisition and also trying to onboard. 

So we typically do a light kickoff with them and then start to pair people up. So we'll begin to publish 

• The teams
• The leads of each of these cross-functional workstreams
• All the sub-teams that are part of that the workstreams

We start to develop a roster and the time frame within the week. You're going to meet with each other and just get to know each other.

So we've also tried to carve out the integration planning as an introduction and get to know your space. Like we've learned time and time again, don't dive directly into planning work. Get to know each other and help to understand each other's side. 

And once we've started building that into the integration kickoff process, we've gotten much better feedback from the acquired teams and felt like they were cared for. They know it's a partnership, and we're open to ideas, and it feels collaborative. 

How early is integration planning?

We start during the development of the business case, but a lot of it comes later. As they're working with the business on, what is this acquisition? How would it fit in? How does it align with our overall goals and strategy? Those are a key part of how the integration thesis is formed. 

So I typically get brought in very early on, normally pre letter of intent. I usually have a briefing on the rationale behind this deal and a short write-up on what the integration thesis is, on a high level, based on these assumptions. 

And part of what happens in diligence is that we, the integration team, are doing a little bit of integration diligence. And we're looking for the things that maybe help support that integration thesis. This is actually what's going to be our integration strategy and our operating model on day one. 

We try to remove surprises for the acquired company. We try our best to preview for them the experience of transitioning.  The more we can prepare them and set expectations up front, the smoother the process will be, rather than introducing something later, right before they need to do it.

Handling Common Challenges

The one area we haven't tackled well is burnout. I think because we're so open and collaborative, it has its pitfalls. People feel like they need to be on all the time or feel the pressure, whether it's real or not, to be responsive because anytime, someone is always online worldwide. 

So we've had to work a lot on things like Slack etiquette, how to manage calendars effectively, manage schedules effectively, things like that.

Invoking Change

The common theme there is around building trust and building relationships. That's the most important thing because it's so foundational to everything. And we've tried to unpack what we've been doing, especially in this more virtual or remote world where we have to try and unpack the layers of building that Trust and how we're making those relationships.

So they can understand the vision, why these strategic initiatives are important, and how they fit in. So the way that we've been managing changes is through intentional interactions and engagements. 

We are making sure that we're trying to time it appropriately for where they are in their journey, like not trying to cram too much information all at once because we want them to know so that they can do the work. 

IT roles on your M&A Team

We have an IT lead who serves as the conduit for the other areas of excellence within IT. 

Depending on how your company is structured, ours is structured based on a functional area or department. So there's marketing technology. There's support; there's employee success, or what we call HR and the people team.

So we've got different areas of technology and the roles that we have are in IT, the kind of executive that reports to our CIO. So there's always a big picture kind of understanding of how any systems integration or new technologies coming in will impact the overall IT roadmap.

Because for us, that's super critical and they're always really constrained in terms of resources and timing. And as we all know, M&A has never been well-planned out or thought or scheduled.

So for them, any change or diversion into their roadmap that they worked so carefully to craft is disruptive.

So that's why it's been helpful to have not only that senior leadership kind of view of things but also someone excellent at partnering cross-functionally internally. 

So it's like an IT manager, but a generalist who understands whose job it is to understand the business goals of the acquisition.

And then how all of the supporting teams are going to rally or pivot and integrate. They might have a downstream impact on their requirements. 

So they're responsible for driving the IT integration roadmap, working and pulling in their peers in IT to help get them ramped up. 

And then after that, once they've got their integration, their IT integration projects going, he's more of making sure everyone's coordinated reporting on status collectively and just providing visibility across the board.

So I'd say it's him, an executive. And then I think we've got two folks that are helping him that are based in India. Because we see the majority of the crazy work that can't be planned out is around the HR technology piece. It's more of those teams that are driving the execution. 

Cross-Functional Teams?

We've got employee experience. Everything in our people team, payroll, benefits comp, the workplace or facilities, legal, communications, change management, recruiting talent development.

We've got customer experience. So that's our sales, anybody that's customer-facing, that can be support, sales, and all other customer-facing teams. 

We've got Trust, so that's risk compliance, security, legal, privacy, product launch, product design, engineering, and infrastructure.

Systems integration. That's typically IT with all of their business process counterparts. And then we've got procure-to-pay. So that's everything from the treasury, procurement, accounts payable. I think privacy is part of that too and compliance and then record to report. So everything tax, finance, accounting, integration related. 

Best Tools to Start with

Start with Zoom and Slack, if you can.  Those are the easy things that I feel are lighter weight than if it's part of just a normal interaction, even outside of the deal that you can get up and running. 

I'd say something like open document collaboration, whether it's G-Suite, Google docs, something online, that you can use to start sharing your work with other teams and co-author in real-time.

Characteristics of an M&A Integration Team Member

They have to have a pretty high EQ. Just reading people, reading a room, and reading a situation really well is one of the top things that I look for. 

Second, having that cross-functional mindset is probably as important, like someone who loves understanding how to connect the dots or seeing relationships or patterns or connections between things because M&A is so cross-functional. 

I think the people that thrive are the ones that can understand how the pieces fit and then keep those gears turning. So definitely a strong understanding of like relationships and how things fit together. 

And then someone that also has a consultative approach to things ask good questions. A good listener knows when to advise versus when just to help and support. 

So say those are three of the top ones. I'm sure there's a lot more, but those are the first ones that just jumped to mind. 

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