Elon Musk Provides Context on Make vs Buy in the Federal Ecosystem

Every large enterprise faces decisions on whether to code something using internal talent, code something using contractors, or buy a commercial product. For complex and sometimes hard to understand or explain reasons, the government has always had a hard time optimizing on these decisions.

As we have been writing on extensively over the last several years, the federal government has a long history and a large compilation of lessons learned in this type of make vs buy decision. (see: More Proof That The Government Should Always Prefer Commercial Off The Shelf Software, and Software Acquisition and Practices in Government: Build or Buy?, and How Do Leaders In Government Decide Whether To Buy Or Build? Do They pick GOTS or COTS?).

Elon Musk recently provided insights that were very relevant to this discussion on COTS vs GOTS.

The video below is from a fireside chat between Elon Musk and Lt Gen Thompson of the US Air Force at the Air Force Association Air Warfare Symposium on 28 Feb 2020.

Most of the context of the talk is around innovation in space, but lessons were also provided on how enterprises can find balance in rewarding risk takers and other key issues around innovation.

Some points I liked relevant to the Make vs Buy discussion:

  • I loved how Elon offered his observation that success for the nation will require continuous and really radical innovation.
  • He told this room full of fighter pilots that the era of fighter jets is ending (“locally autonomous drone warfare is where it’s at, where the future will be”. “it is not that I want the future to be this, that is just what the future will be, the fighter jet era has passed. yeah, the fighter jet era has passed. It is drones.”). His comments  met with hushed murmurs and laughter.
  • He underscored that you don’t get radical innovation by just incremental steps. You have to push for big breakthroughs.
  • He encourages DoD to leverage its greatest asset, which is our ability to invent and innovate.
  • In the context of competition with China, he observed the rise of their economic power and after stating that since the foundation of war and military power is economics, we had better be really innovative.
  • In the absence of radical innovation, the US will be militarily second.
  • “This is a very innovative country, there is not a country that innovates more, so it is important to use this ace card.”
  • He also offered the opinion that it is critically important to use outcome based procurement when doing acquisition.

You can watch his insights here:

We most strongly agree. Radical innovation is required.

Musk’s comments were totally in synch with statements of Will Roper, the Air Force’s acquisition lead, who at the same conference said “If we can’t move at digital speed, we’ve lost.”

It is not just Will Roper and Elon Musk that are calling for improvements in digital innovation. General Hyten of the Joint Chiefs of Staff, like almost every other four star leader in the US military, has hit on the need for faster innovation for years (here General Hyten calls the current system ridiculous, and here focuses harder on Software procurement and vows to do everything he can to change this situation)

My view: you don’t get radical innovation in software without leveraging the great ace card that Elon Musk mentioned. DoD must make maximum use of our great engines of innovation and invention. We must improve our ability to rapidly buy existing commercial software and fight the myths that get leaders stuck in old habits of thinking they must create their own code.