02/2025:  Make or Buy

Image © Jose 2025

Anyone that has gone through classic management training has done modules on Make or Buy (Make/Buy) strategy and decision making, whenever corporations come across a problem or an opportunity that can’t be met with your typical approach (stretch or do the same with the resources you have). My experience has to do with organizations realizing they need to respond to a request or opportunity outside their comfort zone or, responding to a change or opportunity stemming from market pressures (competitive offering, speed to market, growth, etc.). While there are a lot of frameworks and decision-making templates (Total Cost of Ownership, Net Present Value, …), most of what I have seen being done is more impacted by past experience (trauma) and /or by risk profile (where do you place risk, how much are you willing to take on). Everyone has probably come across the memes out there on poor decisions when faced with make or buy opportunities (Yahoo, Kodak, …), and while there are a number of typical mistakes, but I consider these the most important:

1. Underestimation of Costs: Companies overlook hidden costs associated with both making and buying.
2. Quality Issues: Outsourcing can lead to quality control challenges, especially if partners do not adhere to the company’s standards.
3. Strategic Misalignment: Decisions driven solely by cost considerations may neglect strategic factors, leading to a misalignment with the company’s long-term goals.

As a designer, I have been both on the side of the consultant who was hired because someone inside an organization decided to Buy, as on the side of the internal function who saw a top-down buy decision come through instead of an investment in the Make. So, I am not advocating for a Make or Buy, I am just saying that this is complex.

Now, I’d like to translate this onto the house renovation we are currently involved in. We are faced with a big renovation, the entire project will take a long time (we have counted 8 different projects for a later stage…), and different decisions will have to be made, but now we must deal with a priority concerning external doors & windows, and we have to renovate the second floor where rooms & bedrooms are, and the kitchen on the first floor. The Make decision here is making it myself and/or hiring sub-contractors that will do specific jobs, the Buy decision is about hiring a single master contractor that will take care of this phase of the renovation. We need to do that in the next three to four months, so we can place the house we are living in on the market in the spring when houses typically go on the market. This is compounded by the fact that we have a limited budget, and it is known that a Buy decision will have to cover the contractor fees which can go anywhere from 30% to 50% on top of what the sub-contractors charge (and on top of materials they buy).

I am a designer, and people less familiar with what I do might think I can design everything. While I trained as a designer with the Italian maxim of design “from the spoon to the city”, reality in today’s complex and specialized world is that I am an industrial designer who is not qualified as an interior designer, or an architect, let alone a civil/ mechanical/ HVAC engineer. Can I apply design thinking to all these different domains, sure. Can I be a design professional, follow codes and undertake specialized work in all these other domains, no. Can I learn, yhea. But this is an element critical for the decision-making process of Make or Buy, qualification.

Then, I am a man and my own expectation and of others around me (from my generation) Is that I Make things, with my hands. Though people might say they understand the reasoning behind the Buy, there is a sort of assumption that if we don’t Make it, it’s because we are lazy and can afford to Buy. Another element impacting decision-making process, expectations.

I have a full-time job, one that is demanding and requires my presence in the design studio with my team. I also love that about my job. So, availability is critical.

So, we have 6 elements critical for this Make of Buy decision: 1) expertise 2) deadline, 3) budget, 4) qualifications, 5) expectations, 6) availability. Understanding that this is a major renovation and not just putting up some shelves, I am faced with these questions:

1. Expertise: Do I have the right level of expertise to Make any/ all these areas, or to expertly manage a project of many Makers?
2. Deadline: Do I have a reasonable plan B if the timeline extends beyond what is estimated?
3. Budget: Do I have access to a bigger budget, can I afford to Buy (knowing it can also slip in terms of deadline)?
4. Qualifications: Do I believe I have the qualification to do this Make/manage Makers job, am I curious enough to learn new skills, will I still need to pay for professional services?
5. Expectations: Can I live with myself if I decide to Buy the services of a master contractor, will I be able to explain to others (whose opinions I care about) that this is what makes sense?
6. Availability: Do I believe I have the time to commit to Make/ manage Makers, without impacting my full-time job?

Responding to these questions is a strong family, personal, introspective challenge, and whatever decision made, there will always be consequences and surprises. For this stage of the project, we decided to Buy, and chose a small, local master contractor who has good references from several people. We established a good relationship, and we believe there is some level of transparency. We cannot delegate it all, we need to do our part, and we need to be attentive to details, but this is the first major decision, let’s see how it goes.