Virtual Summit Recap: Making Integration Successful from Both Sides of the Deal

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That was my lovely daughter Shila. If you want to keep up with the latest on M and A Science, our live streams, networking events, when we release new resources, visit mascience.com and subscribe to our newsletter. You can Also follow our LinkedIn page to catch highlights of our interviews and if you if you like our content, please tell a friend so we can keep growing our community of forward thinking M and A practitioners. Now onto the interview. I'm Kisam Patel and you're listening to M and A Science where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies and what actually happened during M and A deals. This interview is a rewind from our Virtual Summit. Hope you enjoy it. If you want to see the full version with video, visit mascience.com hey guys, thank you so much for joining me today. I have Christina Miri, Head of M and A Strategic Operations Atlassian. Christina currently leads M and A integration across Atlassian where she was the first hired employee dedicated to integration nearly two years ago. She was previously at Salesforce in various roles and other industry leading companies and consultancies. Also joining me Steve Elliott, head of Jira Align at Atlassian. Steven is an established software executive with 20 years of technology experience in a variety of industries and was the Founder and CEO of agilecraft, now called Jira Align, a software company based in Austin, Texas that that helps companies scale their agile planning and portfolio management. Today's discussion is going to focus on how to facilitate a successful integration from both sides. The acquirer inquirees perspective Steve is a serial entrepreneur who has sold companies four times through his career, most recently to lasting in April. Now he said he wouldn't talk about the first three exits, but he's happy to talk about the most recent one that actually went well and we're going to learn from Christina and Steve on how to run a successful integration. So with that, what made the acquisition and integration lasting and successful? How is it different from your past experiences?

Steve, thanks for having me. I kind of think about it in phases. In the early phases when we first Started talking to Atlassian and we were talking to 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, actually. And I'd been through, as you mentioned, I've been through some acquisitions that were tough from a cultural perspective and from an incentive perspective. And so I was very focused on can we find a culture that fits? So those early conversations and relationships were really important. And another thing, we had a 10 year BHAG and we had put so much of our energy into getting everybody lined up behind this one big goal, a 10 year goal, massive thing for us to go out and accomplish. One of the cool things I was looking for is we need to find a place where we can continue that work, somebody who embraces that work. Because it's going to be really hard to say, hey, we're five years into this journey and now we're going to do something different. I was looking for those things and maybe the third thing on the early stages for the people making sure that those people who had worked so hard over five years could have a good financial outcome, which can be a complicated part of an acquisition. But just making sure that there was a way to do it where we maximize reward for the employees for what they've done so far and also future reward for what we were going to go do in the second phase of the company. Trying to line all those things up was a big focus for me in early conversations when I met Atlassian for the first time and when I met Cameron Diet, our deal sponsor, he was the first person I talked to. That's what I had in the back of my head, like, these are the things I want to make sure that are solid. Cameron started telling me about their values and their 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 he said he had mapped the Atlassian values to our values and said, look how close these are, look how well aligned this is. Those may not sound like big things, but those are huge for making that journey continue in a strong way. I think we've only had one or two people leave on their own over a year. It's been a really positive journey from that perspective. And I think what made it work was it was open, it was transparent, very collaborative. In the early stages, Atlassian made sure that I met anybody I wanted to. So I met somewhere in the neighborhood of 70 to 80 people before the acquisition, which is a ton of access. They let me talk to CEOs who had just gone through an acquisition with Atlassian and let me ask them anything I wanted to. And that was super helpful because I have questions. As a CEO, I was a first time CEO so there's a lot I didn't know. Talking to other CEOs who had just gone through it was huge. So all that openness, that culture fit was, that was the early stage stuff I was looking for. And then when you start getting into the okay, how's this deal really going to work? What kind of that mid stage planning? One of the things that the M and A team did really was come in and take a really open role to what's going to happen to people's roles. How are these products fit in? So we were looking for product fit and roadmaps and where products overlap. And I was impressed with all of that planning. A lot of times in other acquisitions we had some idea about what would happen, but there was like, well, we'll figure the rest of it out later. Really thinking through how this affects people's careers and where things were going to go. Not just six months in, but 18 months in, 24 months in. Like we did some of that high level thinking through the vision and not not making hard plans. I think that would be an anti agile pattern. But just laying out, is this good product fit, Is this good people and culture fit? One thing that was interesting there a lot of times what's hard for an acquisition I think is what do you do with a CEO like myself? Like you bring somebody in, they've been making all the decisions. They're usually serial entrepreneurs. How do you give them a career at a company who's already got CEOs had open conversations about that. Look, we want you to run this part of the business. We want you to have a career here. At last seen was like, we want you to be here past your vesting. And I thought that was super refreshing. I was like, that's great, that's what I want. I don't want to. I think for serial entrepreneurs a lot of times I think they'll build something and sell it. One of the tips I've learned over the years is if you're building something, you need to be very prepared mentally to have three to five years after you sell it to hand it off and to get it on a growth path at a minimum. What was refreshing about this, we were talking like maybe There's a path beyond three to five years. Even that was refreshing. I was like, this is what I'm looking for. This is fantastic. And then just a couple more points, just on the late stage when you start getting into the thousands of details around how to put a deal together, term sheets and all that stuff. In prior acquisitions we had earnouts and they're like, hey, 18 months in, if you guys hit X revenue goal or some sort of goal, then you'll get more money. And we talked about that early and one of the things that I thought was impressive is they're like, hey, we're not going to do an earn out because that's not really a good agile pattern. 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. Not doing an earn out, figuring out other ways to make sure people were incentivized to get in and learn together and drive the best outcomes we can, but not try to set in stone what the world's going to look like. 18 months out is really important. So Covid is a good example. If we would have set an 18 month goal, we wouldn't have known about COVID There's a whole slew of other things and product decisions, other acquisitions we wouldn't have known about to plan for that. Plus the open transparent term sheet. I don't know how many of you are aware of this, but Atlassian actually put their term sheet out there for other entrepreneurs to see. So if you're ever going to be acquired by Atlassian, their terms are out there in the public domain, which is, I think, pretty rare. They were in the process of putting it out when we were going through our acquisition and they were like, oh, like, look, this is what we do. We're not gaming you here. This is how we operate. All of that was just fantastic. And then I know I'm going on here if you want me to talk a little bit about post acquisition and kind of an agile approach to the post acquisition. The M and A team. A lot of times in prior acquisitions, the M and A team did their job. They'd hang around for a few months, six months, whatever, and try to make sure it's transitioning and then they were off to the next one. The team here was smart enough to realize it's going to take 18 months to really get this thing integrated well and off and running. So they were in it with us. But when we decided, how are we going to do this going forward. We looked at it with a very agile approach. We're going to learn as we go, but we're going to learn together. So we've got full executive sponsorship on that steering committee. The M and A team's in the steering committee, the business teams are in the steering committee. So just looked at it month to month, looking at where problems are popping up and solving them in an agile way. So I think the best evidence that it's working is I'm still really enjoying my work and having a ball and a lot of times, 12 months into an acquisition that's not the case. So I could, I could go on, but I'll. I'll pause there. It's a long answer, but you asked me a hard question.

I appreciate you just outlined the whole interview for me. This is great. I heard a lot of good themes too around culture and values, how it was aligned, how the company Atlassian was very open and transparent from the get go. They actually let you talk to other CEOs of companies they acquired. Bhog of those of you not familiar with it. Bear carry auditious goal. I forgot what book that came out of. But thinking about this real long term vision you had for the company and how you saw that vision still able to continue to thrive even post transaction, obviously post close transparency in terms of this is what's going to happen after the deal. Seems like those are some really key factors into making this happen. The earnout point is actually a really good one because there's gotta be a lot of feuds going on about earnouts going right now. What would you say Atlassian specifically did to make the integration process as smooth as possible? You can pretend Christina's not here.

Yeah, I would never pretend that Christina's not here. I think there was quite a bit in there. One was we took a really realistic look at resourcing when you're looking for triple digit growth from a business. We did a nice job of thinking through what do we really need to scale the business in terms of human capital. I think that's another area where in other acquisitions we've tripped up. So the integration team was actually, they were the champions for us to get the right amount of headcount, to get extra resources, at least in the first 12 months to make sure that we were scaling in a healthy way. Not trying to just say, hey, we're going to do double the amount of business, but we're going to keep the headcount slowly growing. They did a good job of recognizing too that as a Startup. We were running really thin thinking, hey, we're going to help you put an extra layer in there of people to make sure that not only can you handle the integration, but you can also keep growing the business. There was just a lot of recognition of that. And I think it was an experienced M and A team between the folks that we have who had done a lot of acquisitions. So they just realized those things. So part of what they did was just they took the long view and said, look, if we're going to get to this goal in three years, we got to really overinvest in the first year. That was one thing we did that I thought really helped us get off to a good start. And then the rest of it was just we used the Atlassian tool set internally, which was really good for just making sure that we had really transparent communication. So a lot of what our tool sets focus on is just ultra communicative. So, like, at first it was actually overwhelming how much information was coming our way. And then after a few weeks of working in that kind of an environment, you're like, okay. It's just the flow of consciousness of all the things going on, all the things people need, and anybody can jump into those streams and talk. I think just keeping it open and having a long view are some of the key things I think made the integration get off to a good start. Also, like I said, we just kept the cadence. Like, we didn't get six months in and say all good things were going good six months in, but we didn't stop. We know there'll be new growth challenges as this thing scales, so we're going to stay on it longer than most in my experience.

Christina, when you go through an integration of a growth company, I feel like there's a big challenge because obviously the company already is enduring growing pains. But then you're also trying to integrate the company and manage that big order of change management. How did you create an environment that fostered success for both sides?

Yeah, there's a lot of great things that Steve mentioned. One of the ones that he just started to talk about was around having the long view. I think being the first person in Atlassian focused on integration, there's a reason why M and A integration is not my title. It is strategic operations. Because we really want to look at these acquisitions in more of a partnership mode and helping them to stand up their operations and grow roots in the company. Long term, that just requires a different strategy around not thinking of it as just integration, but building that right foundational layer for them to be able to flourish in the company. So one is having that agile and adaptable integration approach for agile craft, which Steve didn't really show. What was behind the scenes was agilecraft was meant to be a much more difficult acquisition than it actually was. We're headquartered in Australia, we have presence in 13 countries, our products are around project and work management. So Jira, Trello, Confluence are some of the key ones in Jira line now. But we have traditionally been a completely flywheel based or self service based set of tools. So no sales team. Jrline came with a full sales led motion team. They were primarily remote, we were primarily kind of office and center of excellence based. They were focused on enterprise customers, we were focused more on individuals and selling teams and they were a Microsoft shop. And we're like the complete opposite of that and all these key pillars. We were going to wow, this is going to be some interesting mix of things and how are we going to do it? But we put it on what I call the compatibility matrix. And I don't know if Steve I've ever showed you this, but it was like these bars where we said what are the things that we think are part of our secret sauce of Atlassian and where is JIRA aligned, Where are we and where do we hope to be together? We just put that on the table for even orienting Atlassian to welcoming agilecraft. And we put a lot of focus first on getting the mindset right of Atlassian, of this is going to be a different type of company with a different type of sales motion, different type of focus. Once we got that set in our mind, we were ourselves more open to change. They're going to help us establish new processes we've never had. They're probably going to contradict or create some friction maybe of how we do the deal process or how we kind of work through some of our business or product practices. But because we were ready for that, we were more okay and we were able to adapt and be more agile in our integration approach. That was one of the key things that we did first. The second, as Steve mentioned, was being part of the team, being part of agilecraft for a longer period of time and myself specifically, I consider myself as like the cousin of the team where I come in. I've gotten to know a lot of them, I've been to their off sites, go to the office and I really tried to immerse myself in the culture as well as my boss or head of corp that we really tried to learn the people understand the challenges of the business help them navigate and even advocate maybe behind the scenes. Steve may not even know a lot of the side conversations we're having trying to help champion some of the resources or alignment and things that need to to clear the path for him and his team to be successful. I think by immersing yourself in the culture and not being bound to a fixed timeline of when you're gonna get in and out of integration really helped us adapt to what the needs were and what the team needed from us. I hear a lot about, oh, the first hundred days, and that's what our integration plan covers. And then it starts to taper off. And I believe the complete opposite, which is as long as I can stay with the deal and continue to add value, that's how long I'll stay. So I think it's been about a year now, and I just started to slowly morphe to the background because I feel like they've been solid and good and they have roots now that can help them thrive. And part of that is also, as Steve mentioned, our product set. So Atlassian's product set is about managing work and information. And our mission for the company is to unlock the potential of teams when they come in and they're using our products that we sell to the market and we're able to share information freely and we're able to make decisions quickly. That has helped build a lot of transparency and trust, where I think typically there's a lot of that information not being readily available to everyone. Especially for a team that's coming off of Microsoft email, Microsoft Teams, a whole new stack and into this world, just feeling like, oh, wow, we're starting to learn all these new things. I think for them it was too much information at the beginning. But then once they got their initial hurdle, just learning how to use things, it really helped accelerate their onboarding. And knowing who do I contact for what purpose, what are the different processes and how do we help navigate the organization with that focus on tools also came to focus on people. And that's, I think, the most important part. We started out first. Steve mentioned that even before the deal closed, he met somewhere between 75 and 80 people. And what we did also as an integration team was we had a leadership kickoff or summit in San Francisco a couple weeks before the deal even closed. We brought all of our functional leaders together with their counterpart in Jera Line and just started to get to know each other for a week. And we just said, we've gone through the diligence phase where we fired you with 100 questions and now's your turn to learn about us. So we're going to share what Atlassian is about and how we run our teams and you're going to share a little bit more about who you are. We're going to bring everyone together so that you can start to formulate that joint view of how you're going to be successful together and start to formulate what those goals and OKRs are so that objectives and key results. From the start, even before the deal closed, people knew who they were going to be partnering with, what their teams were like, what goals they were focused on, and started to define together what that joint success was. And even to this day, Steve has commented that he's still really surprised by how much tight partnering there is just across the company, people willing to reach even outside of their team and help each other. And I think a lot of that was just set from the start of defining the vision together, even at the team level, and then building those goals and targets together.

I was going to add one little bit of color just to put a cherry on top of that. One thing that was impressed me is like you would expect the M and A team to learn about the product that they're acquiring and they absolutely did that. But then after the acquisition, we had these two week boot camps that we put partners through and that literally trained them to fully configure, implement, run, train on the product. So this is two weeks of crazy training, like deep training all day. Christina signed up for it and sat through it. She was in it, learning the product, learning the customer pain, learning challenges the partners were going to have with rolling this out, just that level of immersion into what we were doing was. That was impressive to me because then it's not just superficial integration stuff. Hey, how are we going to get you off this system? Onto this system? It was, they were in there to understand the business as well. It was a good partnering. I hadn't seen that level of understanding what we were doing before.

Christina, how do you drive an open and collaborative work environment? And two, are you like the fun cousin or are you the one that really straightens people out when you come around?

For sure, for sure. The Georgetown office. Yeah, the fun cousin's coming corporate card. She's got an immigration budget with her. That helps. But no, it's hard to talk to your line because they just come with such energy and such passion about what they do that it's infectious. So it's easy to be that way. How we drive it One, I think as Atlassian, our operating mode is default open. Our products are designed that way. So Confluence, which is like our information content authoring management system, it's default open. And so when you come into the company, any page you create is open for anyone to see. And that seems like a thing, but it's just such a different mind shift to know you're writing something, you save it, you close it, someone will get a ping or start commenting on your page. Hey, where'd you get that data? Or can you share this with me? And you're like, wow, oh my God, this is really open. This person's from Australia, I don't even know them, but they're interested in this topic that helped me pave the way for how I design our integration strategy overall. Prior to that last year I was at Salesforce Entrust was their number one value and they were very open. But this level of openness was just on a different level. It seemed like we were part of the fabric of the company. So one is just our products lend itself that way. Two, we're very much an open and sharing culture, so that really helps. But I think also we got a little bit lucky with Tier Align because being an agile company, they were already pretty oriented to be agile and transparent and open. When we came with, hey, here's our product strategy and the vision. But part of this maybe 20, 30% we're going to have to define together. They were open to us partnering together to come up with the actual plan and the details around that. We used a couple ways of our product, like I said, partnering people up to together with their partners and having shared goals amongst them. To say your defined success is what you're going to achieve together from this customer support side, from sales, from services and enablements, all the way down to the technology integration and security compliance all the way down the road. And then we have just a lot of the typical integration program kind of governance checkpoints that we do. We have a weekly integration leads meeting. Steve was part of a steering committee with all of the functional heads of sales, support, the deal sponsor, et cetera, which was really great because I found that that helped clear the way for a lot of quick decision making, which is also an agile pattern and very quick alignment. A lot of things that the downsides of having products and tools where you can create a lot of information and disseminate it to the masses is that sometimes that slows down decision making because there's so much consensus building and commentary that you feel like you have a Need to respond to this, just accelerated it to a strong, really tight knit leadership team that could just kind of work through things very quickly.

Was there anything else specific to get alignment between the acquirer and acquiree?

One thing we did that was new with your align. Steve alluded to it a little bit, was we did a really tight handoff between the deal model, our deal team and integration. So we did almost like translating the deal model into an operating plan. What are our revenue targets we need to hit, what are our key that we need to bake into this integration strategy in terms of how much our partners are going to contribute to bookings, how many quota carrying sales reps are we going to have, how much is headcount going to grow? All of these things in the deal model we translated into an operating plan which became a set of okrs metrics and then also walk Steve and his team through it, all of us together on both sides. And we found in the past that that has been a bit of a black box when the integration team goes, I know the vision, but I don't actually know what we're being measured on in terms of success. And we were being very transparent about that. And that I think forced a lot of alignment because people knew where the goal posts were and then it was up to them to just figure out that plan together, how they were going to get there.

I know one thing we talked about previously around Agile, having that level of agility, being highly responsive and iterative. In terms of the way you plan things, how did you enable an iterative live plan?

We started at the same time that we were acquiring agilecraft. This concept that you and I talked about, which is our playbooks, our game plans in place. So we have plays for any given functional, whether it be process integration or systems integration, like a play that we define that says here's how we're going to get there A to Z. And then based on the agilecraft acquisition, we had pulled together a series of plays to become that game plan. With AgileCraft, it was a little different than some of our other acquisitions that are from our marketplace, where we know the recipe, it's repeatable, it's something that we can get in and out of very quickly. Because they were creating almost like a net new part of our business model. We were defining a lot of that for the first time. So how we did that was just a lot of tight collaboration with them and also a lot of patience on their part because I think they had felt probably some frustration of why Atlassian don't you already have this and what we had really tried to explained to them was that a lot of this you are helping to define our future vision together. We enabled it, I think just by writing the book together. A lot of these things we didn't have on like how are we going to enable an enterprise sales team, how we were going to truly unlock the channel on this type of very new complex product. Those are things that we did together. And so we had a structure of good governance at the functional team level that then rolled up to our overall kind of integration leadership team. We would do things like monthly OKR and metrics reviews together as a leadership team while having that weekly steer co Steve still had his JIRA line leadership checkpoints as well. So there were for us, which is a highly matrix company, there were a lot of different checkpoints of these intersections of teams just really trying to hash out problems together, kind of move forward on progress. And then all along the way we were sharing information and just continuing to iterate on our plans together.

What about tools and techniques have you used to improve communication information management Atlassian.

Toolset using JIRA to capture our okrs and some of our work, the 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 for creating all of our rich documentation and dashboards for company and project progress. And then also some teams prefer to use Trello. So a lot of those kind of lighter weight teams are tracking less complex projects are using Trello as well. So we've got a pretty rich tool set that kind of contributes to that.

At any point does Steve suggest using Agile Craft for advantage integration?

Oh yes, absolutely. That's part of why I attended the bootcamp was I said there will be a day where we are using Jira Align for integration and we're starting, I think in a couple months with getting the company on it to start with our top level goals and objectives. And then once we get that motion going, it'll be no doubt we'll start tracking everything there as well.

Yeah, it's pretty cool. For those of you not familiar with JIRA Align, it's taken Agile really designated for small teams, but allowing series of teams to be able to roll up for a larger enterprise.

Yeah, just taking all the work that's happening across the organization and trying to map it to the outcomes that you want to achieve. So taking your okrs or your goals or whatever the company's driving and making sure. That the work that's happening is lined up towards one of those goals and then measuring is this work we're doing actually moving the needles that we want to move? Right. So we're doing this work. We think it's going to help us get revenue, increase adoption, increase customer satisfaction. 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. We're not allocating work for quarters on end or for the whole year. We're going in with a learning opportunity saying we think if we do this it'll work and then rapidly delivering work and understanding is it driving the value we thought and if not, we have the ability to pivot resources, funding, whatever, towards as much value as possible. It's enterprise agility is what we're trying to help companies get to with the align product.

Yeah, and it seems like a great use case for M and A integration. How do you see company culture change during integration, if at all? Did you implement any agile principles specifically?

At that time we were already in like a pretty agile way of thinking. The longest range that we would talk about was usually 3/4 and it was now next, later planning. And the now version is, hey, we're 80% sure in this next quarter, this is what we're going to do. But we reserve the right to adjust based off what we're learning the next version. So what we're going to do the quarter after this one, we're 50% certain on that. And in the quarter after that, we're 25% certain on that one. Enforcing with our customers and the whole planning process that we're not setting out in stone what we're going to be doing. 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. And so we took that approach from the beginning. That's something we were driving before it became a lot more powerful as a large public software company. So in a startup, 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 and an agile company like Atlassian, there's a lot going on. So just lining it all up and making sure that the products and the visions and the roadmaps all line up, all that stuff that we've been selling to customers became something we needed even in a much more intense way than we did before when we were a hundred people, basically. Does that make sense?

Yeah, yeah. How'd you see Agile techniques improve the integration process?

So those techniques of just kind of looking at everything with a hypothesis and a learning approach, it's perfect for integration because the integrations never go exactly the way you think. Even examples I was talking about before, like you come in and then we acquire something else and there's all these moving parts. Right. So it's a prime candidate for agile thinking. It's really hard to just set in stone. And lots of examples of us saying, hey, this is what we think is going to happen. And then as we said about the integration together we would learn something. For example, there were some system things like, hey, we want to move off our Salesforce version onto the company Salesforce. But the company Salesforce was going through a project that ended up shifting out a couple of quarters. That agile mentality for that was perfect because that would have really tripped up everything we were doing because we were agile and we think that way, we just took it in stride. We're like, okay, we're going to work out another way around this and then it'll all come together. And I think that mindset and that way of planning gives you enough flexibility to where those don't become like showstoppers that frustrate the team because they can't get anything done. You just go into it expecting that level of uncertainty and change and you're basically built for change at that point. So when change happens, you're not flummoxed by it. It was that two week case of delivery, the quarterly level of planning, the being clear that we're not trying to set in stone all of our plans and having that variability as you go out, all those ways of thinking that we brought helped us integrate. I would say just from a process perspective.

Christine, I'm curious on your thoughts because the way I hear from Steve, a lot of it comes back to mindset at the end of the day, less so much of an emphasis on tactical techniques.

Yeah, that's right. 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 discuss and debate, sharing of ideas and status and things fluidly where it's seen as additional overhead, why do we need to do that? They don't see the value in really trying to bring kind of openness and alignment amongst teams. I've seen those acquisitions not go as well on the integration side, so considering the other parts of the deal. But I think when you have people that understand that even a simple thing like providing status or sharing your roadmaps or sharing latest customer support, kind of incidents that you've had, sharing that across the teams and cross functionally, we have been able to get everyone to elevate their thinking about what they understand about Jira Align and other acquisitions that has helped us build more that agile and open transparent mindset of we need to not just care about your function, but you also need to understand what you affect around your world and how other teams and inputs in part of the world are affecting you. And I think that's part of what Steve is also seeing the benefit of that partnering and people being able to be stronger leaders by being more informed and having that holistic view. So I think mindset is one, but also just driving home the value that even individuals in the integration team can provide by opening up their mindset to that and seeing that the importance of it.

Can you walk me through game plan and plays and how that works in context of M and A?

We haven't fully built them all yet. I'd say one that helped Jira Align is just standing up our whole go to market process. So if our game plan is, hey, we need to pull a game plan together because we're acquiring a company and they're a sales led company who's largely targeted towards enterprise customers, we can pull off the shelf these individual plays that now we've created with Jira Align, which is, and I'm going back to like right after the deal last year where Steve and his team Terror was on fire trying to close deals because it was our kind of end of fiscal year and at the same time we were going through our large customer conference and so we created a play, a series of things that set teams in motion for standing up a deal desk, making sure we got accounting lined up with sales, operations lined up with legal, making sure we're ready to take orders, start pumping them into kind of our back office. And then at the same time the team that is focused on sales in that new fiscal quarter going forward, they're already starting to build the enablement plans, aligning on the target customer accounts, starting to work with the channel of what partners we could have to start working with to get them trained on your alliance. All of that was happening in motion, but those are things that we Kind of created as individual plays and strung them together because of the situation that Jeroline was in and the specific goals we had for the integration.

I like the way you explain it because it's getting away from long checklists and more into here's actual techniques to handle these situations in M and A.

Yeah, it's like a library we're building of individual techniques and tactics.

For the record, if anybody's looked at my book, I stole a lot of these ideas from Christina. She's coached me into the reason why we made into a framework that way. What are some of the other plays that you found useful?

The leadership kickoff play that we also developed with Jera Line, which was it's not always possible with a given deal, but where we have some buffer between sign and close. We had a couple weeks there where we could actually bring the leadership teams together and bring more people into the tent than what we had. So I think it was only maybe Steve and two or three people while we were going through diligence that were involved on his side. But as soon as we signed, we could bring in the rest of his leadership team and they could start to meet with their counterparts. That is a play that we've now just codified as like a best practice, like where we have that time. We should really start to build those relationships early because that just pays dividends down the road. And that feeling of, like, trust and like, relationship building.

How have you seen these plays improve? Integration?

The plays have improved in that we're getting faster, we are building more trust. I think we're helping to think, even identify areas within Atlassian where we were probably weaker or not as mature from an operations standpoint. So I think Jira Align exposed a lot of the areas where we were getting by because we were serving a different part of the business. But based on their deal cycle, the types of enterprise customers they served, it really helped us to open up to a lot of different areas that we had not looked at before. So 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 teams. Roadmaps and then future of plans for enhancements and evolution.

What were people's reactions when new plays were introduced? Was there resistance? If there was, how do you handle it?

We're not really as formal on that process. It's just fluid. It just happens. We haven't really had a very regimented structure around plays. But people know now that, hey, for my team, we need to get ready because Acquisitions are a key growth strategy of Atlassian. And so they know that there needs to be investment. They've seen the benefits that having these things predefined can help accelerate in terms of the team's success and smooth out some parts of the integration. And that it also serves as a good way for them to get these contracts approved or contracts working contracts with other teams solidified on, so that when a new acquisition comes in, and of course it's a surprise and it's coming in the middle of fiscal year, so people aren't playing around it, it's less of a, oh my God, let's get ready. Let's figure out how to solve this up more. Okay, we got this. We gotta play around this. We know what we need to do, so let's just much more calmly than before figure out just how to get it done.

So this next question would be good to hear from both of you. What's something you didn't know about integration or underestimated going into the acquisition you wish you had been more aware of?

I'm gonna let Steve go first on that one.

Something I didn't know about integration or.

Underestimated or didn't go as well?

Oh, yeah, underestimated. It's probably easier than didn't know. I tend to be pretty optimistic. We got this kind of person. So 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. So I think coming in, I thought business model wise, thought we would be able to make the changes we needed to make to go faster than we were going. And honestly, probably for the first six months, it was harder to do business than it was before. Pretty dramatically harder, honestly, 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 definitely underestimated it. I knew it'd be a process. I wasn't completely naive, but it was a bigger process than I thought. And to what Christina's been alluding to, hopefully most people at Atlassian would agree that because of us coming in that our whole company is stronger in some ways. Like we've got more tools in our arsenal of how we go to market. Right. So we've got the power of our flywheel, which will always be kind of the center of gravity for us, but we also have some of those bigger enterprise motions that help us get adoption faster up at the executive levels of a company. But it was a process So I did underestimate that it was a good learning experience going forward. Sometimes we laugh like did we change Atlassian more or did Atlassian change us more? And I think it's a combo. And the good news, and it's probably a sign of a good acquisition. I think most of those changes on both sides are healthy changes. That's probably the biggest one that comes to mind for me.

One that we're still wrestling with a little bit I think is on the broader strategy alignment across the company. I think we talked about before how being an agile company, it 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 acquisitive and we're always changing conditions, right. Of what our solution strategy is, product strategy, looking at competitors and conditions in the market, we're always iterating on that. And so for a high growth company and product like your line to come in and try to rationalize, hey, are you building that or are we building that? Hey, there's a little bit of overlap here. Everything from how the products are named to the different feature sets to like the data model, all of those things. I didn't fully appreciate how challenging that would be in the midst of integration while the other teams are still running 100 miles an hour. So I think that's something that we will probably build more plays around and new set of game plans around. So that's one.

Now I'm going to mash this question up together because I think it's an important one, but I want to make sure we can cover pretty well. So if someone was interested in transforming from a traditional approach to agile, what would the overall integration process look like from a high level? And if you can walk me through where you would actually start the integration.

Process and those steps, I'd say integration starts even during diligence. I think a lot of people in the conference have pointed to the integration team being brought earlier and earlier into the process. And I think for us that was something that was a huge benefit as well of Steve and I getting introduced even while we were doing diligence and kind of explaining my role, explaining kind of at a high level what the inspiration strategy we think is going to be. And so I guess how I would pivot that, how would you set it.

Like an agile tone, like really distinguish it as more of an agile approach or process? If you're looking back at some of your previous roles or some of your colleagues that still follow More of a traditional plan driven approach. Because I think you're right, it needs to come in early for companies that want to take away in terms of, hey, we've been doing this the same old way. When people talk about agile, there's vague definitions around it. But how would you define that for a company that's looking to transition?

Yeah, that's a good question. I think it's more nuanced. I know that may be frustrating, but like the mindset is a lot of it. I was thinking of examples of some of the things in prior acquisitions. There were like, here's a list of things we're going to do during diligence and being on both sides of the table. Here's things we're going to do once we make a decision that we want to move forward from diligence into the serious relationship. Here's things we're gonna do Post with the agile mindset, we were fluid before we had the deal done. We were doing like deep work on branding and what do we name this and how should it work and exchanging ideas. And some things were less structured, it was more about. We were just intent on like moving the thing forward. One of the cool things about that is it built momentum. Like I was getting to work with marketing and product leaders and people. We were moving forward in an agile way. It felt like we were already together, even though there was no ink anywhere that said we were together. To me those are mindset things. Like it's just that agile approach to problem solving where we just jump in and start solving and learning. It's hard to distill it to a set of practices. It really is a mindset. And then once the mindset's there, the tools and practices are like the enablers of the mindset. It really is that approach. So with the acquirer being an agile mindset and the acquiree having an agile mindset, things just got done faster. We actually spend less time on thinking through the process and more about, let's just be very results driven. Let's just focus on the result, jump in and figure out how to solve things. And so it's a more fluid way of working. Sometimes it feels a little more chaotic or overwhelming with the amount of knowledge flow, but stuff happens way faster. For me, one of the things I like about that approach to M and A from an agile perspective is it just builds that momentum because it feels like you're already rowing together, even though you might not end up permanently being rowing together. So it's a great test. Like we're already starting to dig into some of these problems and we're not even one company yet. That's my thought on it.

It's almost like the first company's initial step is just getting comfortable with that level of transparency because it seems like you need quite a bit of it to do that.

What you're describing, I think transparency and then also just having those clear goals up front. If we were to think about it to be like we're taking a release as an agile team, we're taking the release and break that down into smaller increments and units of work. I think we eventually broke it down to what's the first thing we need to go tackle. The first one I think was like launching at Summit, like how are we going to launch the brand and have this giant coming out and announcement party together? So we took the top level deal goals and broke that down into the major releases, major releases and then broke that down into work and the cross functional teams together. That's another kind of agile approach is we don't work in silos of like just the support team, just the marketing team. Like we are all in cross functional groups together and we're meeting daily, we're meeting weekly and just starting to break down that work. So what Steve sees and the team sees as a finished product, not individual functions with their different tasks and deliverables done and then he's got to figure out how that all adds value to the business. So we're very like goal based, very cross functional team based and then taking those top level goals and just like breaking it down just this mall of and achievable increments as possible.

That's great advice. I know we're about to hit that hour. Last question, what's the craziest thing you've seen in M and A?

I don't know if I can talk about that.

Just donate names and dates. That's what I learned.

You can say two incorrect scale to incriminating. Steve, do you have a good one?

Yeah. I've only been a part of four acquisitions so I feel like I'd get nailed if I tell any stories. I've seen some stuff for sure.

Maybe over half hour drinks saw.

I expect you to be to be there. All right, this will be continued for happy hour which will be completely off record. So those of you watching off a live stream, we're not recording the last couple of sessions. I want to thank you both.

Thank you so much for having us. It's been super fun.

That was great.

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