“It’s not the largest company, it’s not the most successful, and it’s not the strongest companies that survive. It’s the most adaptable companies.”
Promoting adaptability is how Atlassian co-founder Scott Farquhar believes Australian businesses and startups can secure their longevity, and ensure they don’t go the same way as the dinosaurs.
Speaking on the topic of “company immortality” at the Amazon Web Services Tech Summit in Sydney on Wednesday, Farquhar employed a dinosaur analogy to explain how companies that only focus on their current expertise can be wiped out by a sudden change.
“There’s a reason we still read bedtime stories to our kids about dinosaurs, and it’s because they were so dominant in the world lived in,” Farquhar said.
“But when change happened, they couldn’t adapt. They were so optimised for the world they lived in that when things changed they weren’t able to change with it.”
Farquhar believes the majority of modern day companies are only optimised for the environment they already operate in and when the “asteroid hits”, most companies fail to adapt.
Of all the Fortune 500 companies operating since the year 2000, Farquhar said only 50% still exist today. This number gets even lower when looking back at the original Fortune 500 list, of which only 12% are still around.
With this in mind, Farquhar says he’s been focusing on how to ensure Atlassian is built as a long-term company, questioning why doing so is “so hard”. He believes the solution is a focus on adaptability, not efficiency, and that companies today put too much focus on the latter.
“For performance reviews, your boss asks how efficient you are at doing your job, not how adaptable and forward thinking you’re being,” he told attendees at the summit.
“If you’re building a company, you shouldn’t be thinking about how to build the most efficient company, but the most adaptable.
“It’s not about planning for today, it’s about planning for the future.”
Despite his warning for companies to be ready for “asteroid” events, Farquhar acknowledged that Atlassian was “birthed” from the asteroid that was the internet, which simultaneously killed off other established companies in the industry.
“Companies like Rational Software, which never regained their supremacy,” he said.
Atlassian currently has annual revenue in excess of $600 million and the company built by Farquhar and his co-founder Mike Cannon-Brookes recently debuted on IBISWorld’s list of the largest Australian companies.
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Recently, Cannon-Brookes confronted the federal government over the apparent disappearance of Prime Minister Malcolm Turnbull’s innovation agenda, questioning the last time anyone had heard the phrase “ideas boom” in the last six months.
“Let’s just say the dreams that a lot of people had a year ago have not been realised if anything we appear to have gone in the opposite direction in terms of a national dialogue, which I think is sad,” he said in March.
The tech leader said more needs to be done to communicate the benefits of new ideas for further growth, even if it means having hard conversations about the jobs that will be lost.
“We should be honest and empathetic and admit there are going to be a massive amount of jobs destroyed, [ and] there are going to be massive amount of jobs created,” he said.
SmartCompany attended the Amazon Web Services Tech Summit as a guest of Amazon Web Services.