How To Build and Sustain a Competitive Advantage When You’re a Small Business

“Collaborative” is one of the most coveted adjectives of business leaders and employees alike when describing a business culture today. But this has not always been the case. The concept of, and need for, cross functional collaboration and teamwork didn’t really come to the forefront of business management until the pace of change and complexity of technology began increasing exponentially in the ‘70’s and ‘80’s.

Before the internet and software began “eating the world” most businesses had strategies focused on operational efficiency. Since Henry Ford first introduced segmented production lines to build his Model T, management has focused on data and statistical analysis to find and affect optimum efficiency through tighter control of specialized labor and process steps.

In the 1980’s corporate finance stepped into the strategy function. They used capital to implement vertical integration wherein all parts of the value chain were consolidated “under one roof” to maximize profit. The idea was that operations could optimize both the output and input side of production: labor, components, capital, testing, and even distribution. Economies-of-scale was the key to the winning in the marketplace and centralized corporate management delivered scale. Corporate behemoths like IBM, GE, and the big-three auto manufacturers carried the standard of vertical integration through the 1990’s.

Then came a new model for corporate design and productivity: design thinking and innovation. The standard bearer of this approach was Apple. Steve Jobs didn’t abandon the learnings of production efficiency or the benefits of vertical integration at Apple; he added empathy and a focus on customer experience to drive innovation and capture market share. Apple’s innovations benefited and enthralled users driving Apple to a size and level of profitability never imagined by the optimizers.

Apple’s approach to product, a design thinking approach, relied heavily upon collaboration. Cross-functional teams broke down the silos of optimization to create and deliver solutions that mattered to customers. Apple’s approach defined a competitive advantage that they extended through vertical integration from owning and producing best-in-class hardware, software, and distribution to owning the content central to the experiences of its customers. Apple has been a market leader for over two decades now and is the standard bearer for collaboration on how teams should work together.

The finance world has experienced similar consolidation and vertical integration, although regulation provides some limits compared to the world of smartphones and streaming entertainment. Big banks like Wells Fargo, Bank of America, JP Morgan, and even regional banks like US Bank, have integrated banking, treasury services, payroll services, commercial lending, equipment finance, and wealth management under a single brand. Big manufacturers like Caterpillar, John Deere, and Volvo are not only the world’s largest producers and distributors of yellow iron and agricultural equipment they are also among the largest funders of equipment. The question is “How does a small or mid-sized finance company today compete and win against vertically integrated mammoths?”

The answer is to emulate the methods of the large, vertically integrated innovators, but do so with an agility and flexibility that they no longer practice. By designing for collaboration – culture, business model, technology – in order to surpass customer expectations to build and sustain a competitive edge not thought possible.

Collaboration as a Culture

Climbing with friends

Collaboration has been fundamental to design thinking and innovation since it was evangelized by David Kelley and Tim Brown at IDEO. Collaborative cultures build the cross-functional teamwork necessary to find and design experiences that change customer expectations, i.e., drive innovation. Modern business management tried to instill collaborative cultures because they know they need high performing and connected teams to compete. Modern office technology provides cloud-based data acquisition, storage, and analytics as well as real-time communications and knowledge management. The seamless integration of collaboration tools like Teams, Zoom, and Slack keeps team connected and encourages the collaboration need to compete effectively.

Collaboration as a Business Model

While the need to build a collaborative culture is well understood, the criticality of designing a collaboration business model is less so. In part this is because of decades of focus on vertical integration for optimization and efficiency. Vertical integration of a value chain works – Apple has proven it over and over - but vertical integration is expensive and hard. Most companies do not have the resources necessary to “make” all the value propositions required for modern consumer experiences. The solution is the systems engineering alternative – “buy.” But this is not “buy” in the cash or capital sense. A collaboration business model “buys” with partnerships, innovative use of brand capital, and modular solution architectures.

Three keys to executing a collaborative business model are:

  1. Transparency: Partners, like customers, do not like secrets. Transparency generates trust and must be supported by the technology - data, communications, and security.
  2. Modesty: Collaborative business leaders know that they cannot be the best at everything their customers need - others already do some things better. But they don’t just live with this knowledge, they leverage it to find and integrate with those providing better options to customers. Referrals, reselling, and licensing are the basic tools of a collaborative business design
  3. Fairness: Win–Win all the time is the key to building and sustaining the partnerships necessary for modern technology solutions. Win-win means recognizing the value of all parties and building a fair recognition/reward of that value. Partners will not just be supporting the solution; they will be a critical part of delivering it. Without the collective parts, there is no sale.

Collaboration as a Technology Stack

A “buy vs make” business model requires a technology stack that easily implements product management and marketing decisions. A collaboration technology stack has a modular cloud architecture that can affect collaboration through the entire industry ecosystem. Collaborative technology design enables ambitious, smaller businesses to build solutions function-by-function to deliver the best-in-class experiences customers’ demand. The collaborative architecture design must include:

  1. Modular software integration standards like ETL and defined APIs deployed with public and/or hybrid cloud platforms and tools that enable customers, partners, and even competitors to build onto the solution.
  2. Scalable Platform-as-a-Service infrastructure with marketplace ecosystem support provided by cloud solution leaders like Microsoft Azure, Amazon Web Services (AWS), Salesforce, or Google. The only way a smaller company can stay current with both technology and changing user expectations is by leveraging the many vendors of a PaaS marketplace.
  3. Aggregation and integration of industry standards, insights, and knowledge to empower customers to innovate in how they use the technology stack to better serve their customers and defend against the inevitability of new competitors.

Enabling collaboration with technology partners in Equipment Finance

The equipment finance industry is changing faster than many industries in the context of collaborative design. The industry is under siege by fintech competitors using new collaborative technologies like blockchain and crypto. Regulators are swinging their focus on privacy, transparency, and disclosure from the consumer ecommerce and finance worlds over to the B2B world of equipment financing. Every customer knows luxury consumer tech experiences and expects the same of their business experiences. The only way that small and midsized equipment finance companies are going to be able to defend and adapt to these threats is collaboration.

The good news is that the equipment finance ecosystem is packed with both good technology partnership options and willing participants in collaboration. Here’s are just a few ways that Tamarack has built a collaboration business model and technology stack to help equipment finance customers fill business intelligence gaps is multi-vendor solutions:

  1. Collaborated with early customers to better design and deliver insights from operational data.
  2. Customer collaboration identified gaps in industry solutions that required new integrations of both systems and data sources.
  3. Collaborated with experts in specific back-office systems to accelerate data mapping and system integration while maintaining the integrity of the intelligence dashboards.
  4. Collaborating with multiple back-office vendors to bring the most appropriate and cost-effective solutions to the wide range of business sizes and types in the industry.
  5. Collaborating with specialized data and information providers to create new views and insights of portfolio risk and performance.


Collaboration is expanding and evolving from being a key part of a winning business culture to being the foundation of the business model and design of the technology stack that sustains the business’s competitive advantage. By purposefully designing for collaboration – culture, business model, technology – organizations can exceed customer expectations and realize success not thought possible.

Written by

Scott Nelson

President & Chief Technology Officer, Board Member

Scott Nelson is the president and chief technology officer of Tamarack Technology. He has more than 30 years of strategic technology development, deployment and design thinking experience working with both entrepreneurs and Fortune 500 companies. Nelson is a sought-after speaker and contributor on topics related to IoT and digital health. His involvement in technology in the local and national technology community reflects an ongoing and outstanding commitment to technology development and innovation.


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