Inside Atlassian's approach to making informed business decisions

Atlassian's approach to making business decisions provides insights for leaders looking to better inform their decision-making processes in order to improve commercial outcomes

Atlassian is one of Australia's most successful tech stories to date. Since its initial public offering (IPO) in 2015, Atlassian became the first Australian "unicorn" company – a private company with value at or over $US1 billion ($1.3 billion). By March 2019, the company was valued at US$26.6 billion ($38.1 billion). Today, Atlassian continues to enhance and deliver its software products to customers worldwide.

Taking a closer look at the Sydney-born company, its workplace software has become indispensable in some of the world's biggest companies and this has led the tech giant to become a key player in the architecture of today's global economy. So how does a company like Atlassian go about making strategic business decisions successfully?

Dr Mahreen Khan, a senior quantitative researcher at Atlassian, explains how the software company has started to research and utilise evidence-based management to improve performance across its teams. Dr Khan completed a Masters in Organisational Psychology and was recently awarded a PhD from the School of Management at UNSW Business School earlier this year. She now works within Atlassian as part of a research team, where she examines team performance from several angles to better understand team effectiveness and to improve the company's overall performance.

Using evidence-based management to increase team performance

By using objective performance, proficiency data and psychological metrics that have been shown by scientific research to be fundamental to understanding team effectiveness, Dr Khan says Atlassian aims to become "scientific experts in teamwork".

The first team to undergo such an analysis is Atlassian's central cross-functional software team. "How we've been approaching this research project is very evidence-based. We've been consulting the literature, looking at what's already been done in journal articles, trying to understand what the theoretical and methodological limitations of past research are to carve out results," says Dr Khan.

She says her goal is to create a team research study that is not only innovative and novel, but that is methodologically rigorous and sound. "We want our research to be reliable and valid. The benefits of our research are that we won't just understand team effectiveness within Atlassian, we will know that if we implement the recommendations arising from our research that team performance and team psychological metrics will improve," she continues.

Dr Khan also says that Atlassian aims for this project to produce an ongoing body of research, demonstrating the company's commitment to evidence-based management.

"We want to start with a couple of initial studies, looking at the relationship between team psychological metrics and team performance metrics. A subsequent research study will be about what sort of Atlassian practices are demonstrated to improve both of these types of metrics," she explains.

Why does Atlassian take this approach?

"The idea behind our team-based project originated before the coronavirus pandemic, but it highlighted the need for our kind of research," explains Dr Khan. "Once everyone started working from home it highlighted how important it was for teams to be cohesive, to collaborate well with one another, to have good team processes and to maintain that connection even though we do not physically see one another," she adds.

With Atlassian employees invited to continue to work from home until the end of the year, one can see why such an approach might be essential for the company, and a clever business decision at that. "It makes topics like team effectiveness and collaboration much more important. If organisations truly want to understand a complex topic like team effectiveness, they will need to go about it in a systematic evidence-based manner," continues Dr Khan.

"There is an infinite amount of information in the world, and you don't want to go down the wrong rabbit hole. Atlassian has done well in actually embracing this as a new trend; they want to have a scientific approach to what they recommend and what they practice," she says.

Hopefully, with more information and more awareness about the importance of evidence-based management, Dr Khan says she hopes more organisations will increasingly adopt this approach.

Challenges of implementing evidence-based management

Nevertheless, there are challenges in applying evidence-based management within organisations. First, collating and aggregating all the relevant evidence is an enormous undertaking that requires a lot of resources. "You've got what you know from the internet, and then you've got information that comes from different stakeholders within the organisation and the wealth of academic information out there, so it is tough to implement evidence-based management within organisations," she says.

So applying an evidence-based approach involves a fair bit of work to read, collate, and aggregate evidence to implement something with a robust evidence-based framework – something many companies could find overwhelming. "But at the end of the day, we feel like it's a win-win for every person involved if they're being provided with recommendations and have that substantial evidence-based framework," she adds.

Another challenge is time. According to UNSW Business School's Dr Christian Criado-Perez, a Research Associate at the UNSW Business Insights Institute, the first thing organisations often say is they don't have the time to go into such a rigorous and systematic process of trying to identify the best available evidence. But as Dr Criado-Perez puts it “that approach puts a manager at risk of screwing up an important decision. It’s all about priorities really.

"They say we need to act instead of analysing so much, but in fact, you need both," explains Dr Criado-Perez. A good example of the need for an evidence-based approach is the response to COVID-19, he explains. "You know, we were in the middle of a pandemic, and we had to react very quickly, but that doesn't mean you shouldn't be aiming to base your decisions on the best available evidence," he says.

Another challenge could be that not all managers have had adequate training in finding the available evidence and being able to appraise the quality of the evidence. "Even if they have the motivation to do so, there are some barriers in terms of ability, and of the organisation providing an environment that facilitates evidence-based management" explains Dr Criado-Perez.

Steps for leaders in applying evidence-based management

Along with colleagues, Dr Criado-Perez's recent paper Enablers of evidence-based management: Clues from the absorptive capacity literature explores evidence-based management as a framework which can help managers make decisions based on the best available evidence. It is notably one of the first papers to identify enablers of evidence-based management supported by empirical evidence.

In this way, evidence-based management is a framework that relies on four critical sources of evidence:

• The expertise of the decision-makers or managers themselves
• Stakeholder concerns, which could include employees
• Organisational data – all the data an organisation has about its employees, what has worked in the previous project, what hasn't worked, how their customers, employees behave etc., and
• Finally, scientific research.

According to Dr Criado-Perez, once organisations have all of this evidence, they then need to combine it all, critically evaluate the quality and then make a decision based on what can be extrapolated from these four sources.

For a manager, there are a few things they can do to make stronger evidence-based decisions. “You need to slow down and think critically, you have to try to make sure you are relying on multiple sources of information, and you have to try to understand the problem of what you're addressing before jumping into a solution (which is often because of time pressure)”, explains Dr Criado-Perez.

The next important step is appraising the quality of the evidence – the critical step where many organisations often fall short, says Dr Criado-Perez.

Lastly, as an individual, you need to prepare for ambiguity. “You have to prepare for ambivalence, for a certain degree of uncertainty. Evidence is just indicating what is most likely to work. But, of course, there's no guarantee. There never is,” says Dr Criado-Perez.

In their paper, Dr Criado-Perez and his colleagues provide a useful breakdown of specific steps leaders can take to facilitate evidence-based management including:

1. Investing in strong information system capabilities for efficient collection and use of data
2. Nurturing a culture that embraces questioning and exploration
3. Facilitating collaboration and knowledge exchange across departments through organisational design, interdisciplinary project teams, and knowledge broker roles to de-silo organisations
4. Building strong ties with external stakeholders to facilitate the collection of evidence
5. Committing jobs, time and financial resources to innovative tasks

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Similarly, line managers can signal that evidence-based management is valued and expected by:

1. Empowering employees to adopt evidence-based management
2. Adopting a transformational leadership style
3. Facilitating informal structures that foster teams' socialisation and knowledge exchange
4. Judging decisions based on the quality of decision-making, not solely on results

Finally, HR managers can prioritise critical thinking and evidence-based management-related skills during selection and training by:

1. Nurturing a questioning mindset and an ability to think beyond disciplinary boundaries
2. On-the-job evidence-based management training, addressing real organisational problems

For more information on evidence-based management, contact UNSW Business School's Christian Criado-Perez directly. The UNSW Business Insights Institute is a research partner delivering economic and business insights and solutions to government and business. Using a program-based approach consisting of research labs and knowledge hubs, the Institute helps industry solve complex challenges by linking them to academics and providing them with access to novel research insights. For more information please visit the UNSW Business Insights Institute.