Design and use a framework for identifying, analyzing and comparing make versus buy versus partner choices

This is an excerpt from “Table Stakes: A Manual for Getting in the Game of News,” published Nov. 14, 2017. Read more excerpts here.

You and your colleagues must design – then use ­– a framework for identifying and evaluating options for how best to achieve (1) capacity, capability, speed, risk, revenue and cost objectives by (2) doing aspects of required work through (3) possible working relationships with others as opposed to yourselves.

Take a moment to reflect on the following situation. You want a new dining room table. You have a range of objectives: functional (e.g., number of seats), aesthetic (e.g. style), and economic (price). Work has to happen: design, construction, and placement. And, you have three options for getting the work done:

1. Buy the table (that is, have someone else do it for you)
2. Engage a carpenter to help you build the table (that is, have someone do it with you)
3. Build the table yourself (that is, do it yourself)

Your make/buy/partner choices are similar. For any aspect of work, you could^[1]:

• Do it yourself – as you have been doing for so many decades
• Do it with others through partnering arrangements
• Have others do it for you through contracting and outsourcing

The following diagram illustrates the interplay among the three components of the required framework.

You can subject any and every aspect of work to this analysis: target audience service, growth and monetization, content creation and distribution, platform management, marketing, sales, brand building, innovation, technology and tool management, talent management – and more.

The range of objectives to pursue for any identified aspect of work might include:

• Consider, for example, news coverage beyond your metro region or even the U.S. The first question to ask is, “How much capacity for this coverage is needed to serve the target audiences we seek to grow, serve and monetize?” Or consider server capacity to ensure that your digital operations do not break down when news events generate huge traffic. The point here is that, for any given element of work, you and your colleagues must identify how much capacity is needed, and how best to assure it.
• Capability refers to institutional skills not capacity. The Washington Post, for example, has dozens of coders in the newsroom, providing strong institutional capability they believe is key to mastering the challenges ahead. None of the four metros in Table Stakes could afford that number of coders. So, the question becomes: How do those – or similarly constrained – metros ensure they have the minimum coding capability demanded to be in the game? Options include:
  • Make: We hire X number of coders for our newsroom
  • Buy: We purchase coding capability – or the tools and approaches that arise from that capability – from third parties
  • Partner: We form a coding collaborative with other news enterprises (indeed, perhaps, even non-news enterprises)
• Speed: Speed matters. Whether it’s reducing load times, decreasing the time for events from conception through execution, the rapidity of adoption of a new product, platform or capability – these and other critical requirements might best happen through buying and/or partnering as opposed to doing them yourselves.
• For any given aspect of work and initiative, what risks to you face? How might you reduce those risks? How might you share the risks? How might you defer the risks? How might you make risks less costly? How might you make risks more rewarding? How might you take more risks? These and other objectives must be part of your make/buy/partner framework.
• What are the revenue requirements for your metro? How will you achieve them? What are the drivers of revenue? For example, what audience volume, engagement and sharing numbers are needed to achieve those revenues? What advertising, sponsorship and other sources of revenue are required?
• Cost: Metro, local and regional legacy newspaper enterprises must lower costs, make costs more flexible[2], and share costs. Buying services from others as well as partnering with others are options that might reduce your costs or make those costs more flexible.
• Other: Your efforts might have additional objectives. For example, the U.S. presidential election in 2016 brought concern over fake news to a boil. Metro, local and regional legacy newspaper enterprises – like other reputable news enterprises – need to figure out a range of strategies and approaches to navigating the adverse effects of fake news and constructive, positive effects of building trust in news. Okay. How might you set and achieve those objectives through identifying and weighing options among: (1) do this ourselves (make); (2) have others do this for us (buy); and/or, (3) do this with others (partner)?

[1] Note there is one more option: stop doing the work. See Table Stake #1.

[2] Flexible means easier and faster to adjust down or up. Using freelancers instead of full-time employees, for example, is a well-known tactic for cost flexibility.