SCOTT FARQUHAR: There’s people who say, yes, we need to be in the office five days a week. And there’s people who say, no, that’s false. And we’ve done research around this.

BOB SAFIAN: What surprised me most was the finding that there was no correlation between being in the office every day and a sense of connection to coworkers.  

FARQUHAR: I think of Atlassian as the canary in the coal mine. And as a canary, we are singing our heart out at the moment. This has been very beneficial for us. 

SAFIAN: Hi everyone. It’s Bob Safian, and that was me talking with Scott Farquhar, the co- CEO and co-founder of Atlassian, a $60 billion Australia based software company that sells collaboration tools for 260,000 businesses around the world. Atlassian has embraced distributed work at a scale that almost no one else has, through a program called “Team Anywhere.” 

And whether your group is in the office every day or only once in a while, their experience offers a fascinating and useful glimpse into one possible route for the future of work. Plus, you just got to love Scott’s Aussie accent, right? 

Now, the Wall Street Journal released data last week, that remote workers are 31% less likely to get promoted than those who go into the office. And the U.S. Bureau of Labor Statistics says that 90% of CEOs prefer in-office work, says they’re more likely to give them promotions and raises. But, Atlassian’s own data says all those leaders are missing out. In a report released just today, Atlassian describes a slew of advantages for distributed work, if you run the system the right way.

So, here’s me and Scott, dishing about what others are doing wrong and his vision for a better, more humane work-life for everyone. 

This is Rapid Response. Let’s get to it. 

[THEME MUSIC]

SAFIAN: I’m Bob Safian and I’m here with Atlassian co-CEO and co-founder, Scott Farquhar. Scott, thanks for joining us.

FARQUHAR: It is great to be here, Bob.

SAFIAN: We were talking earlier about your coming to us today from your home outside of Sydney. Do you like working away from the office?

FARQUHAR: Since we’ve chosen to do what we call “Team Anywhere,” which is to work from anywhere, I’ve probably been in the office about once a quarter.

SAFIAN: Oh, so mostly you’re away.

FARQUHAR: Mostly work from home for me. And, that’s mostly at my house in Sydney, and over summer, it’s a place about 90 minutes north on the beach.

Breaking down Atlassian’s remote work policy

SAFIAN: Because there’s this battle that’s going on in boardrooms and C-suites around the world about the future of work, in office versus remote, the pendulum swinging back and forth. And Atlassian, you’ve taken a stance that you’ve referred to as a one-way door. Can you explain, what’s the one-way door?

FARQUHAR: We made a decision very early in the pandemic, that we were going to allow our employees to work from anywhere, in a distributed fashion, and we called it “Team Anywhere.” 

Go wherever you want to, and we will not force you back into an office. And for us, now, today, about 40% of our Atlassian employees live more than two hours from an office.

And so, it really is a one-way door decision for us.

SAFIAN: At the time you announced this Team Anywhere strategy, you said you were prepared to lose 20% of the company who might prefer a different environment.

FARQUHAR: I think many companies believe that decisions can happen without having some sort of deleterious byproduct. And we said, what’s the maximum number we’d be willing to lose and still do this? And obviously, if you’re gonna lose 80% of employees, you would rethink.

And so we collectively said, I think about 5,000 employees at the time, and we said, well, if we lost 20% of our employees, would this still be the right decision? And we thought, yes. And we’ve lost way less than that. 

SAFIAN: So this is, like, more a management choice that might appeal to different talent as opposed to a right or wrong, or…?

FARQUHAR: We believed that it’s a more human way to work. We also believe that the best talent around the world doesn’t all exist within a 90 minute commute of an office. And we have people all over the world working for us. So we got a talent advantage there. 

And lastly, we believed that the way work happens is gonna change a lot. And as a company that provides teamwork, software, we needed to be at the forefront of that. 

And I think on all three of those areas, it’s proven true. It has been a more human way to work, and we’ve had huge business benefits of talent. And we’re also changing the way that we build our product.

SAFIAN: You just released a big report, a 45 page report, about your experiences and the lessons learned. What’s the most important takeaway that you hope to teach other businesses through this data?

FARQUHAR: I think of Atlassian as the canary in the coal mine. And as a canary, we are singing our heart out at the moment. This has been very beneficial for us and we believe it shouldn’t be controversial. Being distributed shouldn’t be controversial. We want to evangelize that. And so, there’s a couple lessons. Let’s take through the belief that humans need to get together to build social bonds.

Now there’s people who say, yes, that’s true. We need to be in the office five days a week. And there’s people who say, no, that’s false. We can be a remote company.

We believe that you do need to get together to build social bonds. Our belief, though, is that you don’t need to get together every single day to sit next to each other on a Zoom call in an office and commute back and forth to get that benefit. 

We believe that you can get together for what we call “intentional togetherness,” deliberately to build social bonds, to break bread, to build that human connection that we think is so crucial to teamwork.

But it doesn’t need to happen in dribs and drabs every single day. Let’s do it deliberately. And we’ve done research around this.

The power of intentional gatherings

SAFIAN: What surprised me most was the finding that there was no correlation between being in the office every day and a sense of connection to coworkers.

FARQUHAR: There were two questions that we thought were really important. One was, how connected are you to your peers and how connected are you to Atlassian as a company?

And we survey employees every single month asking those questions. And what we did is we correlated those answers with how frequently people come to an office and how frequently they do what we call intentional togetherness gathering.

And we found that people just turning up to the office every day was not correlated. However, when people did get together deliberately, we saw a huge spike of connectedness to each other and to the company.

The surprising part was the decay function. I thought, a week or two later, we’d be back to baseline. But it turned out that the data showed between three and five months, it took to get back to the baseline.

And so if you take that and you roll it forward, you say, well actually maybe we can get together once a quarter, and still maintain an above baseline connectedness. And so it doesn’t require an in-office every single day. What it requires is, four to six times a year, deliberately getting people together.

SAFIAN: Intentional meetings are better than just randomly being in the office more often.

FARQUHAR: There’s a lot of benefit to randomly bumping into people if that’s the only option you have. It’s better than nothing. What we found, though, is that, can you deliberately build social bonds in a shorter time period and give people back the time that they spend commuting? For example, look at the numbers from us. The average Atlassian has saved about 10 days a year in commuting. And that’s about two and a half million hours or a hundred thousand days. And in places like India, where there’s a particularly longer commute time, we’ve saved some Atlassians 32 days a year. Randomly bumping into people is good. What we think is better is deliberately connecting with people. And we’ve actually organized our offices in that way.

And people are surprised that Atlassian still has offices. Why haven’t you shut it all down? And what we found is actually there’s three cohorts of people who come into the office. 

One is the people who want an office environment. They come in every single day. Those people want a closed door office, because they’re on Zoom calls, and they don’t want to sit next to other people on Zoom calls. They want to get work done. The second group of people, I call the water cooler people. And those are the people who say, well, actually, I want human connection every couple weeks.

I’m not with my team. I just want to get together, I want to meet people, I want to chat. And those people, when they turn up to the office, it’s not about getting work done. Those people want to sit next to the water cooler. They want to sit in the cafeteria. They want to bump into as many random people as possible, but they do all their random bumping into people on a single day, every couple weeks. And for those people, they want open space, open plan, high density. 

The third group of people is where we do these intentional togetherness gatherings, where we might get 10 people together or 50 people together to break bread and build bonds.

And for that, couches and beanbags and bright airy spaces that you can configure in a multitude of different ways. And so, we have rebuilt our Austin office from scratch, with that in mind. And we’re actually building one of the world’s largest wooden buildings in Sydney — a 40 story office tower. And our designs have evolved in the lessons learned report that you’re talking about.

How is productivity impacted?

SAFIAN: The report talks about commuting time saved each day, and that people spend some of that time working. But not everybody thinks remote boosts productivity. There’s a lot of suspicion that whatever people’s reported hours are, that less is being done. How do you protect against that? 

FARQUHAR: Some people who are forcing a back to office mandate, in many cases, that’s like telling people they need to use a blue pen instead of a black pen. Does it matter which pen you use if the output’s the same? Does it matter where you are doing the work if the output’s the same?

And what people are finding is that many of their measures of productivity are often based on presenteeism or hours in the office or things that aren’t actually the output of the work that is getting done. And that’s something we’ve had to go through as well… how we think about work productivity.

And we build a lot of that into the products that we use. We’ve got a product called Atlas that does goals and OKR setting. And we use that to check, are things on track. Are individuals contributing to those overall goals, instead of tracking how many hours someone comes into the office or what color pen they’re using.

SAFIAN: If you have two employees who have similar jobs and they’re producing similar work, but one of them’s only working 20 hours and the other one’s working 40 hours, but you’re paying them the same amount, you don’t care as long as they’re delivering those results over the time period.

FARQUHAR: We don’t track people’s hours. Looking at the studies of when people use our products and how often they’re on their computers, not from tracking computers, but tracking the actions that happen in software, we’ve actually found that people’s days have expanded.

My rough rule of thumb is, if you had an hour long commute each way, we probably get half of that back in terms of work, that people work slightly longer days, and they get half hour back.

What we found is, the day does extend, but the intensity has changed. People are now working the hours that really suit them. And if they want to get up early and work then, and then, go for a run in the middle of the day, if they want to see their kid’s recital at 10:00 AM in the morning and work through after the children go to bed, we’re seeing that more.

And so what we’ve found is that people’s hours have shifted around. In some cases they’ve extended and in other cases they haven’t. But it really is proof that it is a much more human way of working.

SAFIAN: And so you don’t really care. As long as the job is being done, you do it the way you need to do it in your time. And you’re finding that people aren’t taking advantage of you by doing less, working less time.

FARQUHAR: We care about the outputs. And presence in an office is not any proxy for productivity. Everyone knows that, particularly early in career, where they think, if I stick around longer than the boss, that’s the way to get a promotion. Those days should be dead right now.

No one should be thinking about how many hours they put in. It should be about the outputs they’re doing. And that’s one of the reasons that we chose as a company to head down this path, was that we wanted to understand the evolution that our customers would have to go through. And we built that into our products.

And recently, we acquired a company called Loom, which is a video product, asynchronous video, so instead of sending an email or a Slack message, you record a video and send it to someone.

It’s a way more productive way to communicate information, because you can share it with multiple people. People can comment on it, go back and forth, reply. It’s better than email, because it’s got a human touch, it can be done faster. And so, as a result of living this way of working, we’ve ended up acquiring companies. And we want those products in front of more companies.

SAFIAN: I think the variation in the different kinds of work environments between companies is going to get broader and broader, because folks like you are gonna keep moving further, and some other folks are just gonna hold on. And it’s just gonna make this choice for employees about what kind of place do you wanna work at.

FARQUHAR: There is the people that have chosen to go back to the office, three, four, five days a week, but everyone’s in the office the same day. You can’t live remotely. It’s basically the way we used to work with a few extra days of flexibility around it.

I think that is actually many people are gonna choose that way of working, because it seems very similar to previous. You’ve got people like us, where I feel like it’s a new way of working that I think is better and appeals to a whole bunch of people.

The one in the middle where it’s: some people can work remotely, some people can’t. Some people come into the office. Your career is better. You can come to the office, but you can work remotely if you want to. Those who live close to an office must come in, but those who don’t, don’t have to come in. I’m totally confused at to what they’re optimizing for.

I’m yet to work out a first-principles basis that can justify that in any way. And so, you know, I can understand people snap back to what we’ve done in the past. You did it for 50 years. People can understand and get their head around that. The hybrid middle thing doesn’t make any sense to me. And I expect that to disappear over the coming years, where people realize how bad that kind of foot in both camps is.

SAFIAN: Scott clearly has a bit of frustration with leaders who don’t have a clear idea about how they want their people to work. He’s up for experimentation, but not random experimentation. You need to have a theory about the future of work and then test it and refine it based on the results.

After the break, I’m going to poke at some of Scott’s assumptions in the spirit of one of Atlassian’s core values, what they call “no bullshit.”

We’ll be right back.

[AD BREAK]

SAFIAN: Before the break, we heard Atlassian co-CEO, Scott Farquhar, make the case for distributed work, what his company calls Team Anywhere. Now I poke at him a bit about his assumptions and he gives as good as he gets.

Let’s jump back in.

I talked to another CEO who’s supportive of remote work, but he’s also candid to his team that their career prospects might not flourish the same way, compared to those who come in the office. There’s a risk there for you if you choose to be remote all the time, but that’s your choice to make. Is that what you tell your people?

FARQUHAR: Some companies operate a two tier system, where they say, you can work remotely, but that is a second class career path. And we’re reluctantly doing that. That’s remote or distributed in name only.

And you’re not gonna get the best people. You can work from Boise, Idaho, but you can have limited career prospects. We’ve had to build all of our programs such that they are distributed first and not something that is a second class citizen.

Drawbacks of a distributed workforce?

SAFIAN: One of Atlassian’s core values is “no bullshit,” so I wanna get right to this. You really believe that virtual only presence will be rewarded in the same way as someone that you see in person all the time. If you think back to your own career, wasn’t there times that being with someone physically really mattered? Or do you think that’s just the old way of thinking about it? That’s just old thinking. 

FARQUHAR: We believe that human bonds are built in person. And I’m sure you have friendships that you’ve built over the years, where you don’t see them every single day. You get together a couple of times a year, and you have intense experiences, and you share things, and you have some laughs. You have some tears.

These can be deep friendships. There’s no difference in a work environment. We believe you can build those bonds with your colleagues. And that doesn’t need to be done every single day sitting at a desk.

And so, yeah, we don’t believe that people who never see each other are gonna build strong relationships. We just don’t think that, for most people, getting in a car or some form of public transport for an hour every single day to randomly bump into someone at a water cooler or hopefully, you know, if the stars align, is the way that we should be planning our lives. We should give that time back to people so that they can have productive lives outside of work.

SAFIAN: To be clear, the CEO that I’m referring to, he doesn’t have a two-tier system. He’s just sort of wanting to be candid with his employees that, in his experience, having personal encounters more often does help people trust you more and give you more responsibility. Being present that way is a benefit. But it sounds like you guys aren’t operating that way.

FARQUHAR: I would say that we are still working this out. And that’s why I talk about being a canary in the coal mine… that we really are the largest company in the world that is doing this. And as far as I know, the only company that has a dedicated research team who are analyzing this and publishing research for others.

And we’ve had huge benefits. Our candidate offer acceptance rate has gone up 20%. We’ve managed to tap into talent pools that 40% of our people live more than two hours from an office. So a whole bunch of benefits.

Things we’re still working on… I would say early career people… they actually come into the office more frequently than later in career people. And we’re trying to work out, was there anything different we need to do for that specific cohort?

We do have to make sure that that intentional togetherness budget that we’ve set aside for people to get together, it doesn’t get used and spent for other things. And we’re building reports around that to make sure that as a leader, you can see that your organization is connecting at a frequency that we think is the right amount.

We’ve had needed to build those employee surveys to make sure that we touch on how our employees are feeling as opposed to walk the floor and hope you get a feel for whether people are smiling or not. And so there’s things like that that we are still learning on.

There is no playbook for this. That’s why we’re sharing what we’ve learned so far, and we’d love to learn from other companies who are also pioneering. 

But overwhelmingly, it’s been a positive experience, and we wouldn’t be the company we are without that.

Finding the sexiness in enterprise software

SAFIAN: In the spirit of no bullshit, I have to ask you… So, enterprise software, the field that you’re in, it can seem boring. Like, when I proposed Atlassian as a subject for this show, my producers rolled their eyes like, it’s not Apple, it’s not Tesla. It’s not sexy. Do you try to make it sexy? Do you think it’s sexy? Do you find it sexy?

FARQUHAR: There’s two things that get me out of bed every morning. One is our employee experience. The second is, how we make our customers more successful. And that sounds generic, but when you actually talk about on a person by person basis, where our products have helped them, it can be really meaningful.

Someone who I was chatting with, he joined a startup that was failing, couldn’t get product out the door. And this person brought in the Atlassian product suite.

And this start-up went from being on debt’s door to being acquired for a couple hundred million dollars.

Our mission is to unleash the potential of every team. We help teams at all those companies you talked about… Apple, Netflix, Tesla. These are companies that we help, and if we can make each of these companies 20% more efficient, productive, people enjoying their jobs, if we can get rid of busy work off people’s lives and get them back to the work that they really enjoy, that’s a really noble cause.

I think about Archimedes’ lever, which is, give me a lever long enough and a fulcrum on which to push it and I’ll move the world. And I think there’s not much more that I could be doing with my life than making 260,000 companies, tens of millions of people every single day, more productive and enjoy their jobs more.

SAFIAN: Are there things about Team Anywhere that we haven’t talked about?

FARQUHAR: I’d like to talk about some of the human aspects of Team Anywhere. One of those human stories is a woman who works for us out of our Sydney office. And she came from New Zealand. And her grandmother was stricken terminally ill.

And, in a normal, have-to-be-in-the-office-every-single-day environment, she might’ve seen her grandmother a handful of times. As a result of her being able to work from anywhere, she moved back to New Zealand, got to see her grandmother every single day.

Another one, two employees married to each other, both worked for Atlassian, went on a road trip around America.

These people had never been to Boise, Idaho. And they fell in love with it so much that they bought a house, moved their entire life and family.

We have someone who works for us, Jan, in a van, who lived and worked in a van traveling around the country. She didn’t join Atlassian because of that, but this is an opportunity she got to take because we had that policy.

SAFIAN: What do people most misunderstand about your business, about Atlassian?

FARQUHAR: People often think of Atlassian as the Jira company or the Confluence company, that we really solve technical problems, that we’re a developer tools company. And that might’ve been true for the first year of Atlassian’s existence. That was kind of how we saw each other.

But what has really changed and people don’t realize is that we help solve people problems. We help solve how people collaborate with each other, how information gets out of one head into another, how work gets prioritized and scheduled through an organization that can often be byzantine and backwards.

We have companies who have Atlassian as the most mission critical software that they use, because it’s how work gets done across the entire organization. And I think that’s misunderstood about Atlassian.

SAFIAN: I’m reflecting on this whole conversation. And you know, in the last year, there’s been like this resurgence of in-office and mandates. Did that surprise you, this sort of return to the old days?

FARQUHAR: It doesn’t surprise me that some people went back to the way that they’d done things before. That’s happened with every transition. You see people trying to ham the new way into the old way.

Future of work: “We’re only gonna get more distributed”

SAFIAN: And in this discussion of the future of work, if you take 2020 as the starting point, how far along that curve have we come, and how much more is there to come? How much more change will there be?

FARQUHAR: The combination of choosing how and where you work and artificial intelligence, and the rise of that over the last year, is a potent change to how work is gonna get done. I do think that we are only a small percentage through that. 

The direction of it is clear. We’re only gonna get more distributed. We don’t need to turn up to offices to make people feel good about paying rent. How big and how fast we move is less clear and there’s a lot of human and social factors associated with that.

But I think there’s a long way to go in terms of making people more productive. And that’s why I get up every single day to think about how Atlassian can help our customers and beyond, to change the way they work and make work more human.

SAFIAN: Well, Scott, this has been great. Thank you so much for making the time.

FARQUHAR: I appreciate it Bob. I really appreciate the time.

SAFIAN: I’m not sure I personally like everything about Team Anywhere. In my experience, having a group together more frequently than once a quarter can speed up execution and urgency. But I guess that doesn’t always make for the most empathetic environment when it comes to balancing other parts of your life. And hey, I’m not everyone. Clearly, Atlassian is connecting with a generation of talent that’s keen to have more flexibility.

So, will the future of work be more like Atlassian or more like the office heavy financial industry, which was early in the back to office mandate game? Scott’s probably right that the overall trend is moving in his direction. But it’s still up to each organization, to each of us, to create a work environment that we want. That will attract people who are excited about our model and it’ll put off others. It’s just another way our world is getting more chaotic.

Until next time, I’m Bob Safian. Thanks for listening.