Less Red Tape Means More Innovation for SMBs


When I covered the financial services industry, I often found that credit unions with three branches and three ATMs were quietly trying new product features that big banks hadn't even begun thinking about. Or so I thought.


After a heart-to-heart with a VP from PNC Bank who was responsible for its electronic banking program, I discovered that not only had she begun thinking of these features, she was trying to gain the necessary approval to pilot them and then hopefully roll them out to customers.


There was the rub. She had to present her case before multiple executives and often attorneys, each of whom had his or her own agenda. Many of her previous ideas had expired, strangled to death by red tape.


SMBs aren't naturally more innovative than their larger peers. But they do tend to be leaner, and thus more agile when it comes to making decisions. This kind of agility often allows SMBs to more readily adopt solutions before they hit the mainstream. A case in point: software-as-a-service (which granted, also offers an upfront and compelling financial case).


That point is nicely illustrated in a ZDNet blog written from Sun's Startup Camp, an event that gives Sun bigwigs like CEO Jonathan Schwartz a chance to personally woo the SMBs that the company is making so central to its emerging strategies.


Schwartz's keynote -- that can be viewed via a video clip -- highlights the sometimes lumbering nature of big organizations, when compared to SMBs and even consumers, who are increasingly becoming the tail that wags the corporate dog when it comes to technology adoption.


I like that Schwartz was self-deprecating enough to include himself in an anecdote from the keynote. Turns out that some of his blogs attract the attention of a team of corporate lawyers, who then generate reams of paperwork for the Securities and Exchange Commission. Thankfully, this is something that most SMB execs don't have to worry about -- and their innovation efforts are often the better for it.