27 frameworks: Build versus buy

Building versus buying capabilities in-house or deciding whether to outsource them is a strategic decision. And it’s not a decision all executives think about the same way. So much depends on your company’s goals and strengths. It’s important to have a structured way to think about this decision, though, so when you need to incorporate a capability, you know how to make the decision. We asked our Fast Company Impact Council members how they decide when to build capabilities in-house versus outsourcing or partnering. It was a popular question, and we had to limit the responses—to just 27! There is wisdom in these words that you can apply to your situations. 1. PARTNER FOR COMPLEX CAPABILITIES AI has shifted the equation—there are now far more things you can use easily, rather than build in-house. For many companies, that means partnering for complex capabilities instead of trying to recreate them internally. The challenge isn’t access; it’s prioritization. With so many nice-to-have services now available, the key is identifying which ones become true need-to-have capabilities that drive real outcomes. — Kevin Laymoun, Constructor 2. DEPENDS ON COMPETITIVE ADVANTAGES I decide based on where real competitive advantage comes from. If a capability is strategically differentiating and tied to proprietary data, judgment, or know-how, I want it in-house. If it is more commodity and a partner can deliver it faster or better, I will partner. I tend to think about AI as two races: one to adopt what is becoming broadly available, and another to build what will actually set you apart. — Todd James, Aurora Insights 3. ONLY BUILD WITH EXPERTISE Never build something you don’t properly understand. You need to be able to judge the work, and to understand the craft and process behind it. Without that, you’re slightly kidding yourself. So the choice is fairly simple: Either hire someone you trust implicitly to lead it, or work with people who already know what they’re doin