Corporate Entrepreneurship and Innovation: Atlassian Case Analysis

This case analysis explores Atlassian's competitiveness and style of operation, its approach to innovation, risk-taking, and proactiveness. It also discusses the challenges and risks that Atlassian faces as it continues to grow and expand its business operations.

Corporate Entrepreneurship and Innovation 1
Corporate Entrepreneurship and Innovation
Student Name
Name of the Course
Professor Name
Name of the course
City or State located
Date

Corporate Entrepreneurship and Innovation 2
Atlassian Case Analysis
Question 1
The case study explores the competitiveness and style of operation of Atlassian which is
an Australian collaboration software company. The organization is dependent on various
frameworks that describe and establish the organizational, industry, and general business drivers
employed within the organization. To begin with, we have innovation. As the tech industry is
undergoing a rapid change due to the continuous new demands of customers, more organizations
are in the process of reexamining their structures in order to seek better financial performance.
This includes new improvements through innovation in high growth areas. Atlassian developed a
business model that revolves around subscription fees rather than having a sales force.
The company builds great products and then lets the customer, and the market do the
selling. Through this strategy, the company has built a huge customer base that acts as an
advocate for the brand within different corporate organizations. Besides, the company is reliant
on new technological infrastructure such as cloud computing and delivers their products easily
through internet downloads. I believe this approach is a game changer and the company can
continue employing the no sales philosophy only if they can continue bringing in more
innovation since that’s what more customers are after.
Secondly, we have risk-taking. In this context, risk-taking refers to the willingness to
pursue projects or opportunities that have a likelihood of losses in order to achieve set objectives
(Sefalafala, 2013). Scoot Farquhar and Mike Cannon-Brookes, the founders of Atlassian,
developed the company on the premise that if a great software was made, priced right, and made
available through the internet for anyone to download, customers would come. To add on this,
the company was built without a sales force since the founders believed that as customers liked
their product, they would tell friends and associates hence gaining a customer base. This is an
anomaly in the world of business software since Atlassian took this risk without having proof it
would work (Bass, 2016).
According to Scott Farquhar, customers may not desire to call a salesperson if they don’t
have to. They’d rather be able to find answers on the website. This connected model has allowed
Atlassian to improve the customers buying experience hence remaining competitive. The

Corporate Entrepreneurship and Innovation 3
company has embraced the continuous innovation to risk type of innovation hence being able to
strike a balance between the connected model strategy as well as adapting to changes in the
market.
Lastly, we have proactiveness. Proactiveness is more action-oriented in relation to future
wants and needs of a market. Proactive organizations shape the environments they operate in as a
means of exploiting opportunities (Sefalafala, 2013). To begin with, Atlassian focusses heavily
on the wellbeing of their staff. It differs from other tech companies since it is driven by a set of
values. The company understands that employees are a crucial component of success and
innovation. Therefore, the Atlassian has been able to attract more opportunities around the world
from renown companies such as Facebook, BMW, Netflix, Coca-Cola, Nasa, and Netflix. In a
two-year row between 2014 and 2015, Atlassian topped BRW’s best places to work (Mahroum,
2016, pg. 221). In addition, the company has tipped millions of dollars to local startups as well as
making acquisitions as a means of adding more customers, developing new products and
expanding in existing customers.
Question 2
Atlassian faces different corporate innovation challenges as it continues to grow and
expand its business operations. To begin with, we have the scale of innovation. Small startups
are generally disrupting more established tech companies due to the scale of innovation they
bring on board (Garvin, and Levesque, 2006). Since Atlassian is not a verily established
company although it is in the category of big companies, it faces challenges in managing its
growth. For example, Cannon-Brookes and Farquhar have to manage managers who manage
managers who manage people. Atlassian’s growth has been slow over the years since it has
managed to strike a balance between adapting to changes and the company’s overall strategy.
However, the rate of competition in terms of growth is accelerating, and Atlassian will need to
make more long-term investments to act as buffers.
In addition, as Atlassian is making more acquisitions primarily with startups, the type of
business model to be employed may have challenges. This is because of the difference in
business strategy (Torstensen, 2015). Finding a perfect match in terms of an appropriate business
strategy can be challenging for Atlassian, and therefore, the company should rather develop the
business models or strategies with time due to the changing environment.

Corporate Entrepreneurship and Innovation 4
Lastly, on the challenges, we have unclear key performance indicators. Since Atlassian
went public in 2015, challenges in short-term performance are inevitable. Besides, investors are
interested in quarterly reporting cycles, therefore, managers are often under pressure to deliver
since they are under short-to-medium contracts (Hamel, 2007). The performance indicators are
majorly profit and revenue driven, and this may portray challenges in terms of long-term growth
of the company. By focusing more on short-term profits, securing huge investments may be
impossible and may require the company to make adjustments in line with the business strategies
employed within the business. This may impact the innovation capacity of the company since
more technological companies are making huge technological investments so as to ensure they
capture the market needs and wants effectively.
However, Atlassian has an opportunity that may last for decades if managed
professionally although it’s risky. The no sales force philosophy is a promising competitive
advantage that may propel Atlassian to greater heights. Since no expense is used in the sales
force unit, the company can channel all the proceeds allocated for the sales team to R&D hence
bringing more innovation. I believe innovative products and services is what clients are after and
if Atlassian can maintain that balance, they will automatically ensure the strategy remains a
competitive advantage to them.
Question 3
Atlassian also faces risks/issues that inhibit the potential performance within the
organization. To begin with, Atlassian is divided on whether to continue to innovate as it grows
into having a high number of staffs (Mahroum, 2016, pg. 224). Atlassian’s growth has been
slow, and therefore, the disruption brought forth by startups may affect its innovation strategies.
In addition, due to the changing market environment, adopting strategies that are not in line with
the needs of the market, may affect the company’s future growth. The implication of this will be
the loss of market share due to clients migrating to the best and innovative companies. Besides,
the lack of proper management of the staff may slow down innovative ideas hence productivity
may be affected due to the rapid change in the tech industry.
Secondly, Atlassian is divided on whether to adopt a long-term thinking strategy or long-
term investing as a public company. Since the company began trading publicly in 2015, the
pressure to ensure short-term revenues may impact the company’s profitability in the long-term.

Corporate Entrepreneurship and Innovation 5
However, since Atlassian was dependent on profits to fund expansion for some time before
going public or raising money through venture capitalists, it may become an issue for the
company to remain competitive since other tech companies are depending on their long-term
investments to promote competitiveness. One implication that may arise due to lack of adopting
long-term thinking strategy or investments is failure of achieving long-term objectives.
Secondly, lack of long-term investments may cause less returns on the company since much
emphasis is put on immediate revenue.
In conclusion, adopting a long-term strategy will be crucial in combating new challenges
that are disrupting the tech industry. I believe Atlassian is in a better position to grow further.
However, better management strategies will be essential hence the company will have to invest
further on better personnel and strategies to ensure long-term access.

Corporate Entrepreneurship and Innovation 6
References
Bass, D. (2016). This $5 Billion Software Company Has No Sales Staff. [online] Available at:
https://www.bloomberg.com/news/articles/2016-05-18/this-5-billion-software-company-has-no-
sales-staff [Accessed 28 Nov. 2018].
Garvin, D. and Levesque, L. (2006). Meeting the Challenge of Corporate Entrepreneurship.
[online] Harvard Business Review. Available at: https://hbr.org/2006/10/meeting-the-challenge-
of-corporate-entrepreneurship [Accessed 28 Nov. 2018].
Hamel, G., 2007. Management Innovation in Action: Atlassian. Management Innovation Lab,
[online] Available at: http://blogs.hbr.org/hbr/hamel/flatmm/atlassian/ [Accessed 28 Nov. 2018].
Mahroum, S., 2016. Atlassian in Sydney: Beating the Tyranny of Distance. In Black Swan Start-
ups (pp. 215-231). Palgrave Macmillan, London.
Sefalafala, M. (2013). Dimensions of entrepreneurship: Explained | UJUH. [online] Ujuh.co.za.
Available at: https://www.ujuh.co.za/dimensions-of-entrepreneurship-explained/ [Accessed 28
Nov. 2018].
Torstensen, P. (2015). The 5 Corporate Entrepreneurship Challenges. [online] Creating Startup
Winners. Available at: https://acceleraceblog.wordpress.com/2015/05/22/the-5-corporate-
entrepreneurship-challenges/ [Accessed 28 Nov. 2018].