Build, Borrow, or Buy: Solving the Growth Dilemma [Hardcover]

Laurence Capron (Author), Will Mitchell (Author)

Book Description

Publication Date: August 14, 2012

How should you grow your organization?

It’s one of the most challenging questions an executive team faces—and the wrong answer can break your firm.

The problem is most firms’ growth strategies emphasize just one type of growth—some focus on organic growth, others on M&A. When these strategies falter, the common response is simply to try harder—but firms falling into this “implementation trap” usually end up losing out to a competitor whose approach is more inclusive.

So where do you start? By asking the right questions, argue INSEAD’s Laurence Capron and coauthor Will Mitchell, of the Rotman School of Management at the University of Toronto and Duke University’s Fuqua School of Business. Drawing on decades of research and teaching, Capron and Mitchell find that a firm’s aptitude for determining the best resource pathways for growth has a defining impact on its success. They’ve come up with a helpful framework, reflecting practices of a variety of successful global organizations, to determine which path is best for yours.

The resource pathways framework is built around three strategic questions:

• BUILD: Are your existing internal resources relevant for developing the new resources that you have targeted for growth?
• BORROW: Could you obtain the targeted resources via an effective relationship with a resource partner?
• BUY: Do you need broad and deep relationships with your resource provider?

Written for large multinationals and emerging firms alike, Build, Borrow, or Buy will help solve a perennial question and will guide you through change while priming your organization for optimal growth.

Editorial Reviews

Review

“… a timely book.” — strategy+business magazine

“What is so interesting about Build, Borrow or Buy is that while it identifies the problems facing a company approaching a growth phase it also offers strategic solutions based on a combination of approaches. The book says that essentially it is getting the mix right that has empowered companies of the calibre of Johnson & Johnson, Essilor, ResMed and Cisco more than anything else.” — Engineering & Technology Magazine, The Institution of Engineering and Technology

“The logic is impeccable and very informative, evidencing the key points with real examples and models.” — Supply Management (supplymanagement.com)

“This is not just another compilation of tips and tricks about how to manage the growth of your company. Its framework, the ‘resource pathways’, raises the exact questions you need to ask yourself when faced with strategic choices. The book contains the perfect balance between up-to-date examples and cogent analyses based on in-depth studies. It’s a must-read before committing your firm to major investments, alliances, or acquisitions.” — The Independent

“Much recent thinking on strategy emphasizes execution, but Capron and Mitchell’s research shows that companies can excel at execution and still fail, because they choose the wrong “resource pathway.” — CFO Magazine

“According to Capron and Mitchell, firms using a robust “build-borrow-buy framework” to gain new resources have a significantly greater five-year survival rate than those using only one of the approaches… The book is liberally laced with case studies of companies that have either got these strategies right or have got them wrong… The core message is that those who learn to select the right pathways to growth gain competitive advantage.” — Irish Times

“In Build, Borrow or Buy, Capron and Mitchell argue that company leaders spend too much time searching for targets to take over and not enough asking themselves whether they need to do a takeover deal at all. …Companies that want growth have two other options to consider alongside acquisitions: building the resources they need, or borrowing them from somewhere else. The most important aspect is taking the time to think through which approach is most appropriate… Think before you swoop.” —The Sunday Times

“Build, Borrow, or Buy serves as an outstanding resource for senior leaders and anyone working or interested in organizational growth and development.” — Leader Lab

"… Build, Borrow, or Buy, by professors Laurence Capron, of INSEAD, and Will Mitchell, of Duke University’s Fuqua School of Business, is such a timely book..... Confident decisions about what strategy to adopt and what capabilities to develop are highly dependent on knowing how to obtain the required resources. For these reasons, reading Build, Borrow, or Buy could help you enhance your company’s strategy as well as its execution.” — strategy+business magazine

“This range of ideas is important because Capron and Mitchell make it clear that no single strategy will deliver specific outcomes and that the firms that survive and prosper create their own mix.” — The Australian

"The book offers a series of more tactical questions and tips to help you as you probe more deeply into the build-borrow-buy possibilities... the keen insights stir the mind and offer many rewards" — The Globe and Mail

"Excellent case studies back up the authors’ contention that sustainable growth comes when leaders make active choices across the full portfolio of growth options. A highly recommended read for all would-be strategists." — Economia Book Review

"Build, Borrow, or Buy serves as an outstanding resource for senior leaders and anyone working or interested in organizational growth and development..” — David Burkus, LDRLB

“There is surely nothing quite so useless as doing with great efficiency what should not be done at all” is one of Peter Drucker’s better-known maxims. Or, as Will Mitchell paraphrases it to CFO, “You can royally mess yourself up if you try to do the wrong thing really well.” Either way, that nugget of wisdom lies at the core of an original new book on strategy and growth by Mitchell and Laurence Capron, Build, Borrow, or Buy. Much recent thinking on strategy emphasizes execution, but Capron and Mitchell’s research shows that companies can excel at execution and still fail, because they choose the wrong “resource pathway.” — CFO Magazine

“They’ve come up with a helpful framework that reflects the practices of a variety of successful global organizations, to determine which path is best for yours.” — The Hindu (India)

“… an excellent book… fascinating… I’d say this book is essential reading for anyone involved in the growth of their company, and in the end, that’s all of us.” — Business Traveller magazine

ADVANCE PRAISE for Build, Borrow, or Buy:

Bob McDonald, Chairman of the Board, President, and Chief Executive Officer, The Procter & Gamble Company —
“Capron and Mitchell accurately capture the dilemma that today’s business leaders face—how to deliver long-term sustainable growth. They lay out a compelling framework by which to judge how to best fill capability gaps and position companies for growth.”

Roger Martin, Dean, Rotman School of Management, University of Toronto —
“Laurence Capron and Will Mitchell have written a valuable book on how to think through the question of securing the capabilities that a company needs in order to win. Full of helpful checklists and frameworks, Build, Borrow, or Buy brings what could be abstract concepts down to earth for practicing executives. I recommend this book for all those who strive to make their company more prosperous.”

Peter Johnson, Vice President, Corporate Strategy, Eli Lilly and Company —
“Much has been written about identifying ‘what’ core competencies firms need to create competitive advantage. Build, Borrow, or Buy addresses the critical problem of ‘how’ to obtain those competencies. A clear, practical guide to thinking about successfully obtaining, integrating, and managing resources over time.”

Patrick Cescau, former Group CEO, Unilever —
“This rigorous and well-researched analysis provides an invaluable guide for any executive looking to address that greatest of growth conundrums: knowing precisely how and when to deploy a firm’s resources and capabilities in pursuit of the biggest opportunities.”

Kathleen M. Eisenhardt, Stanford W. Ascherman M.D. Professor, Stanford University; coauthor, Competing on the Edge: Strategy as Structured Chaos —
“Capron and Mitchell will change how you think about business. They offer a crystal-clear framework, demystifying the thorny choices of when to acquire, ally, or ‘do-it-yourself,’ and they back it up with rich, global examples. A must-read for executives and business development professionals.”

About the Author

Laurence Capron is the Paul Desmarais Chaired Professor of Partnership and Active Ownership at INSEAD and director of the INSEAD executive education program on M&A and corporate strategy. Will Mitchell holds the Anthony S. Fell Chair in New Technologies and Commercialization at the University of Toronto’s Rotman School of Management, and is the J. Rex Fuqua Professor of International Management at Duke University’s Fuqua School of Business.

Product Details

• Hardcover: 256 pages
• Publisher: Harvard Business Review Press (August 14, 2012)
• Language: English
• ISBN-10: 1422143716
• ISBN-13: 978-1422143711
• Product Dimensions: 6.5 x 0.9 x 9.2 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (23 customer reviews)
• Amazon Best Sellers Rank: #292,742 in Books (See Top 100 in Books)

More About the Author

Laurence Capron is Professor of Strategy at INSEAD and holds the Paul Desmarais Chair in Partnership and Active Ownership.

She is the Director of the Executive Education Program M&As and Corporate Strategy.

To learn more about Laurence and her research, visit http://www.build-borrow-buy.com or watch her interview on international news channel France24: http://youtu.be/nh_zW0Oj12s

To learn more about her executive education program on M&A and Corporate Strategy, visit http://executive.education.insead.edu/mergers_and_acquisitions

Most Helpful Customer Reviews

5 of 5 people found the following review helpful

5.0 out of 5 stars Pragmatic treatment of the subject matter October 8, 2012

By DCMacaca

Format:Hardcover|Amazon Verified Purchase

As a practitioner of M&A, I am constantly faced with the very tensions that the books promises to deal with. Therefore, I read through the book from cover-to-cover soon after its arrival. And, I must say that the authors have done a great job of providing pragmatic treatment of the growth dilemna that many corporate executives (and not just the CEO's) face on a constant basis.

The book is well written and well organized, with a chapter each on when to build, borrow (two actually; one for borriwing via contract and another for borrowing via alliance), or buy, sandwiched between an introductory chapter and a couple of chapters on recap and development of capabilities.

Authors do a good job of weaving in anecdotes of recent transactions and practical examples, as well as bringing in nuggets from their and others' relevant research.

As a practitioner of transactions, I found Chapter 5 (on when to buy) of particular interest. Authors do a great job of cautioning the readers of the (many) pitfalls that an acquisition may lead to. Overall, I felt that the authors provide a balanced view of acquisitions: M&A is a potent leadership tool, but beware of the blind spots! Also of interest is authors' nod to the importance of strong M&A execution skills.

Another factor that led me to give this book high rating is that the authors' treatment is not limited to technical analysis only. Rather, they play up (rightly so) the importance of the softer side of coprorate development options. They pay attention to the importance of "internal resources" (including knolwedge bases) as part of the decision-making analysis, as well as the importance of integration(with special emphasis on "governance issues")....

All in all, a great new book, building upon the recent research trends, that provides practical guide to navigating the resource / growth dilemna that corporations (and corporate executives) face almost everyday. Read more ›

3 of 3 people found the following review helpful

5.0 out of 5 stars A fascinating, thought-provoking book August 18, 2012

By Brian

Format:Hardcover

We adopt this book as the textbook for the MBA elective on Mergers, Acquisitions and Corporate Development at the Ross School of Business of the University of Michigan for the value of its analytical rigor and practical relevance. Drawing on their own research insights and those of other leading scholars, the authors offer a comprehensive framework to address two fundamental issues in the field of corporate strategy.

First, how should firms select among various strategies, including internal development, contracts, alliances, and acquisitions, to grow their company? Up to my knowledge, this is the first book highlighting this holistic view in comparing different strategic choices but not focusing on a single one. Providing a set of powerful analytical tools, the book can help students and managers conduct a systematic analysis across multiple choices and avoid falling into the trap of pursuing an individual mode in isolation based on past competence. The authors demonstrate that a decision is to be made not just based on the value of a given mode, but also the opportunity costs of not using other modes.

Second, how should firms dynamically configure their product and resource portfolios? This dynamic analysis can help managers correct past mistakes, if any, or to update their portfolios which are often rendered obsolete by changing market conditions. Developing such a dynamic capability is particularly relevant in the current market environment, which is fraught of institutional, technological, and demand shocks.

I highly recommend this fascinating, thought-provoking book not only to students and academic colleagues, but also to practitioners who are constantly faced with these critical strategic choices.

2 of 2 people found the following review helpful

5.0 out of 5 stars Fills a big void in the literature! January 21, 2013

By Jay A.

Format:Hardcover

It is not difficult to find books on M&A or Corporate Strategy written by practitioners or academics. But this book is different and adds unique insights.

Unlike most other books on the market, the main conclusions and lessons from this book are based on scientific research. The ideas in this book represent the frontiers of knowledge in this field and are consistent with the advanced thinking and currently accepted theoretical insights. At the same time, the use of intuitive case examples and jargon free writing style make it very easy to read, even for non-specialists.

This book is written from a very rational perspective, providing an excellent contingency framework to select the optimal growth strategy in a firm. Yet, it is written in such a way that the reader will never find it to be a "dry" experience. In fact, it succeeds at also making an emotional impact on the reader. Perhaps, this is due to the use of very appropriate examples and research results that articulate very starkly the performance consequences of making the right and wrong choices. Another important aspect of the book is the very broad view of different modes of corporate growth. It presents the trade-offs among different modes very systematically rather than dwelling on a specific approach (e.g., M&A). This "big picture" approach helps keep things in perspective.

I strongly recommend this book to managers, consultants, students and professors, who may consider assigning the whole book or specific chapters in their graduate level syllabi. I enjoyed reading it immensely and learned a lot from it as well!