Definition of entrepreneurship and entrepreneur.There are many different definitions of entrepreneurship. The writer Richard Cantillion who used it in 1734 to describe someone who bought cheap and sold dear introduced the term entrepreneur. By 1800, the French economist J. B. Say had expanded the definition to someone who moves economic resources into an area of higher productivity and greater yield. Say was a follower of Adam Smith and as a classical economist focussed on getting most out of existing resources and aimed at establishing equilibrium. Joseph Schumpeter in his classic Die Theorie der Wirtschaftlichen Entwicklung (The Theory of Economic Dynamics, 1911) broke with traditional economics and postulated that dynamic disequilibrium brought on by the innovating entrepreneur, rather than equilibrium and optimization, is the ”norm” of a healthy economy. In time the meaning has widened to denote a freewheeling and dynamic risk of business management, often based on personal style and risk (Pantry, 1998, p. 4). Entrepreneur is someone who upsets and disorganizes; the task of an entrepreneur is called a creative destruction. Although entrepreneurship was born and is dwelling within the economy, entrepreneurship is by no means limited to the economic sphere. It pertains all spheres of human activity.

According to Peter Drucker, entrepreneurship is ”innovation – the effort to create purposeful, focused change in an enterprise’s economic or social potential” (Drucker, 1995, p. 149). ”Entrepreneurs see change as a norm and as healthy. Usually they do not bring about the changes themselves. But – and this defines entrepreneur and entrepreneurship – the entrepreneur always searches for change, responds to it, and exploits it as an opportunity” (Drucker, 1985, p. 42). Later Peter Drucker wrote: ”Successful entrepreneurs use both the right and the left sides of theirs brains. They look at figures. They look at people. They work out analytically what the innovation has to be to satisfy an opportunity. Then they go out and look at potential users to study their expectations, their values, and their needs” (Drucker, 1995).

Entrepreneurs innovate. Even more, they practice systematic innovation. They risk. Sometimes they fail. They aim high; they try to create value and to make a contribution. They exploit change.

Most of the authors focus on individual characteristics of an entrepreneur. It is much more difficult to grasp the features of an entrepreneurial organization. Features of the entrepreneurial organizations are:

1. Pro-active: organizations have active position towards their environment, they have freedom to innovate, take risks.

2. Aims are higher than their own potential and resources: stimulates looking for external resources.

3. Culture of team- and group-work. Teams and groups work on different levels, coalitions are formed to generate ideas, make effective management decisions, they strengthen social responsibility of the group members and help to create a new value through integrated activities. Though too big division into groups can become a hindrance as people become more loyal to groups than to organization as a whole.

4. Ability to learn. Learning is a prerequisite for innovation.

5. Ability to solve problematic situations. Entrepreneurial organizations cope with problems that seemed unsolvable before (Stopford & Baden-Fuller, 1994).

Entrepreneurship is closely related to the strategic orientation and dynamic strategic management. The practical reason for the relationship is decentralization, increasing autonomy of units, emphasis on the importance of human, and not technical or economical factors. Picture 1 shows how the entrepreneurship of an organization is related to the main elements of strategic management.

Picture 1. Relationship between the entrepreneurship of the organization and the elements and objects of strategic management (Guth and Ginsberg, 1990).

Tom Peters and Robert H. Waterman, Jr. in their book In Search of Excellence concluded that the distinction of the excellent, innovative companies lie in eight attributes:

1. A bias for action : ”even if these companies are analytical in their approach to decision making, they are not paralyzed by that fact”.
2. Close to the customer : they learn from people they serve, they listen to them.
3. Autonomy and entrepreneurship : innovation is essential atmosphere, ”dauntless entrepreneurs let their imaginations fly in all directions”.
4. Productivity through people : respect for the individual, no ”we/they” division, every worker is a source of ideas, not just acting pair of hands”.
5. Hands-on, value-driven : ”basic philosophy of an organization has far more to do with its achievements than do technological or economic resources, organizational development, innovation and timing”.
6. Stick to knitting : ”never acquire a business you don’t know how to run”.
7. Simple form, lean staff : the underlying structural forms and systems in excellent companies are ”elegantly simple”, top-level staffs are lean.
8. Simultaneous loose-tight properties: the excellent companies are both centralized and decentralized, they push down the autonomy and are centralists around the few core values (Peters & Waterman, 1982. P. 13–15).

Samson & Challis in their book Patterns of Excellence (1999) identified 14 key management principles and observed them as being common to true ‘best in class’ companies in different countries and in a wide variety of industries. These principles are not always explicit within the organizations, but are implicit to how leaders, managers and, in the best companies, all employees, behave and organize their resources.

Source: Daniel Samson & David Challis. Patterns of Excellence, 1999.

It is a well-established fact that the entrepreneur does not perform well in bureaucracies. However many public service institutions including libraries are bureaucratic. They declare respectability and stability, the dangers of the future felt but not spoken out aloud. They stress on how the activities are being carried out but now WHAT and WHY is it done, it has big expenditure for control, equipment, representation, many formal behavioral procedures. The level of inner innovation is low and investments into the future small. The late, ”mature” bureaucratic organization has many non-functional systems, control loses its orientation and sense and the organization is disintegrated from its environment. Planing, as the term is commonly understood is incompatible with and entrepreneurship. Innovation does need to be purposeful and entrepreneurship has to be managed. But innovation has to be decentralized, ad hoc, autonomous, specific, and micro-leveled. The opportunities for innovation are found, on the whole, only way down and close to events.

All these features seem to be very well applied to many libraries and public information services and the lack of them might be used to explain and to show the deeply hidden reason why it is so difficult to innovate in libraries. But is it totally impossible to be entrepreneurial in a library business? Is the resistance to change and innovate in their nature and can not be overcome? If innovation and risk are fundamental features of the entrepreneur, can they find favorable conditions in a traditional library environment and mentality? According to management guru Peter Drucker, the forces that impede entrepreneurship and innovation in a public-service institution are inherent in it, integral to it, inseparable from it. Is it still possible to hope that the mission of LIS can be harmonized with the entrepreneurial spirit?

Entrepreneurship in library and information services.Entrepreneurship is based on the same principles, whether it is in an existing large organization or this is an individual starting a new business. It makes little difference whether entrepreneur is a business or a non-business public-sector organization, nor even whether it is a governmental or non-governmental institution.

Public service institutions such as government agencies, universities, hospitals, libraries, museums, charitable organizations need to be innovative and entrepreneurial. Indeed, as Peter Drucker puts it, they may need it more. And yet the public service institutions find it far more difficult to innovate. Libraries have reputation of conservative, reactive and not proactive institutions, which are slow to change and ”wait a bit” even if the need for a change is evident. ”Most innovations in public-service institutions are imposed on the either by outsiders or by catastrophe” (Drucker, 1985, p. 201). This thesis seems to be well applicable to libraries.

The established education, research, culture sphere in which libraries operate, faces costs higher than revenues. Most libraries suffer from insufficient funding adequate to accomplish the work it needs to do. External and internal demands to do more with being given the same or even less, make libraries to think how they can go on and innovate without abandoning their traditional mission. Authorities are requiring libraries to generate revenue to offset a proportion of their costs. The percentage expected varies in New Zealand, for example, from 3% to 50% (Best, 2001, p. 132). Some authorities have applied substantial user charges (often only to find this leads to a downward spiral), while others have required their library managers to find more innovative solutions.

For many librarians entrepreneurship is directly connected with the introduction or provision of fee-based services. Libraries have long incorporated a number of cost-control mechanisms, including cost recovery charges, such as fee-based photocopying and (more recently) printing. Yet these charge-backs, while helpful, do not begin to put a dent in the expanding costs of the materials and technology, nor they are designed to do so. In fact, they may not cover cost centers they address. Placing the revenue-generating burden upon a single service creates enormous stress on that service; it also limits markets and revenue.

What distinguishes entrepreneurship from conventional fee-based services? Guy St. Clair (Clair, 1996, p. XV) has noticed that some characteristics of librarianship – its strong points – combined with some of entrepreneurial characteristics provide basis for successful information services management. Among the characteristics of librarianship he lists tenacity, high service standards, quality of information, customer service, desire to serve and willingness to take on user’s problems. From the entrepreneurial side such characteristics as vision, willingness to take risks, customer focus, initiative, creativity, desire for success and innovation are presented. He suggests that not only librarians can learn from entrepreneurs, but also the qualities of ”ideal” librarianship could be useful.

Entrepreneurial library is not just a library that has fee-based services or a strategy of expanding their list. On the contrary, as it will be shown by the case study of the Helsinki City Library, entrepreneurship can be a driving force in the library that is absolutely free of charge for its users. Entrepreneurship in libraries is rewarded more through increased attention of donors and grant-making foundations, larger and more diverse applicant pools for position within the community or organization, and inquiries from prospective partners than the revenue generated from the users’ charges. Another critical element is implementing and managing multiple projects. And, of course, entrepreneurship is an attitude of mind, it begins by a redefinition of the physical, expertise, and intellectual infrastructure, and with a new understanding of innovation. It is a difference in management, culture and atmosphere that makes a difference.

When trying to find out what is exactly in the out-front libraries that make them different, we used the same instruments that were used by many researchers in a business field when analyzing the best companies in the world.

A case study of the Helsinki City Library.Helsinki City Library (HCL), Finland, was chosen for a case study. Why HCL? Because of several reasons. First of all, in 2000 HCL received the Access to Learning Award from the Bill & Melinda Gates Foundation – the first public library anywhere in the world to do so. The Award was given for the library’s outstanding work in promoting information technology and use of Internet. The recipient of the award, HCL, received 1 million US dollars in recognition of achievement in promoting positive potentials of the Internet.

Another reason was that this library was and is among several European public libraries that was chosen as a ”center of excellence” for training of library managers from Central, Eastern and Southern Europe in EU projects PubliCA and PULMAN. HCL is in out-front position nationally, regionally and internationally for high performance indicators, technology application, modern management models and organizational development.

The case study was conducted using survey, observation and desk research methods. A questionnaire, based on the 14 management principles defined by Daniel Samson & David Challis, was sent to the top and middle level managers of the Helsinki City Library in March 2002. It included 48 questions that were kindly answered by 7 top and middle level managers. In addition to this data, The Management Self-Assessment report by Maija Berndtson, HCL director, made for the Bertelsmann foundation, was used as well as other sources, such as library annual reports, library’s web site, presentations and articles by the HCL staff members. Myself I had a pleasure of visiting this library several times during the last nine years and my personal observations and evaluations are also represented in this report. Interviews and informal exchange of ideas and experience with HCL management and staff members provided valuable material for the case study as well.

The main finding of the survey is that all 14 principles that Samson & Challis identified as being common to true ‘best in class’ companies were confirmed to be truly important and fully utilized in HCL. Alignment, distributed leadership, integration, being time- and learning-focused, resourcing the medium level within the organization, openness to change, giving value to customer and performance measurement, investing and using staff capabilities – all these principles are the key to the success of HCL as they are to the world’s best business companies.

Most of the respondents indicated that employee behaviors are strongly aligned with stated library values and direction, that library values are not platitudes but a set of deeply hold beliefs In such a library it is not the managers that promote the library values but every employee does. It was strongly expressed that strategies might change with time but the core values do not.

Alongside with the alignment, the principle of distributed leadership is of the utmost importance. Top managers focus on strategy and do not ”micro-manage” their subordinates; employees at all levels accept individual and collective responsibility, take on accountability for their performance and under-performance and strive not just run their processes but also to find ways to improve them.

Entrepreneurial organization puts a lot of responsibility and incentive on teams and groups. As a result, the loyalty is given to these teams and departments ahead of the whole organization. The desk research showed that many authors indicate it as a problem and hindrance for the organization. The case study, quite unexpectedly, showed the opposite result: in HCL people working in teams and departments put their loyalties to them only to a weak or moderate extent, which means that the whole organizational integrity remains strong. Integration is ensured by the existence of channels for vertical communication and sharing between branches and departments. ”Micro to macro” principle is clearly implemented in HCL to a large extent: employees know how their activities connect with and contribute to the big picture of the library’s success, business strategies and goals are effectively cascaded into personal and team strategies and goals, and library’s performance measures are reflected in individual and team performance measures.

Resourcing of the medium term as of the very important asset for the management of the library as a whole was given a very high evaluation by the respondents. The medium level is given both sufficient autonomy and resources; there is an appropriate balance of measures, rewards and incentives to focus managerial attention to the medium term.

Being time-focussed is undoubtedly one of the key characteristics of an entrepreneurial organization. 6 respondents said that time is managed as a critical resource in their library to a very large extent. This means that they are determined to react quickly on customer requirements and to develop services faster than other libraries. Time management is closely related with the change management. 4 respondents think that HCL is open to change to a large extent, 1 – to a very large extent and 2 – to a moderate extent. All confirm that change initiatives are carefully planned and analyzed, accountabilities are assigned to ensure the implementation of change. The senior managers in most cases are used as ”champions of change”.

The library has a clear learning focus. In opinion of the respondents, individual development is a strategic objective for all employees to a large or to a very large extent. Learning and skills are linked to and focused toward library strategies and change drivers and a solid resource base (budget) are allocated to support learning. Staff capabilities are defined for all areas of library activity and clearly linked to value propositions and strategies as well as to organizational development. The library has strategies and plans for capabilities development, transfer and exploitation. As expected, discipline is important to a large extent in opinion of the 4 respondents, 2 of them think it is moderately important and 1 assumes that discipline is a factor of weak importance.

What is crucially important in the entrepreneurial library, is measurement and reporting. Key performance and financial indicators are measured and kept track of steadily and the things measured and reported for are derived from the strategic priorities of the library. Customers are given supreme value, their requirements are measured and the library gains customer satisfaction for its services.

Helsinki City Library has been engaged in management development for 12 years. Since 1998, the work was begun and is still being carried out. During this time the following areas were covered: library’s mission, values of library work, performance measurement, productivity, management by results, staff performance bonus, strategic planning, customer satisfaction, cost analysis and production measurement, quality work, organizational change. As Maija Berndtson, Helsinki City Library Director, stated in Management Self-Assessment, no other library is known for this work to be done so consistently and systematically (Berndtson, 1999). Management development at HCL is seen as an entity with different areas and aspects. It can be visualized as a wheel in which ”the driving forces: are in the hub and the other aspects form the wheel itself:

Source: Maija Berndtson Management Self-Assessment

Management development involves work with goal setting and finances, but at HCL it is deeply believed that nothing can be achieved without staff involvement and participation. According to M. Berndtson’s definition, work with facts is called management and the work with people is called leadership. The hard facts on the management side include: the mission, strategies, key goals, management by results, cost accounting and management information systems. Leadership tools used at HCL with and for the staff are internal information, organization and participation, informal meetings, internal consultants, development work and training. In the hub, which keeps things moving, external consultants, experiments, staff performance bonus and rewards are included.

In the year 2000, HCL surpassed all its functional goals, and set an all-time record of 9.1 million loans. The constituent libraries were open for a total of 96.911 hours in the year, exceeding 94.000 hours that gad been set as a goal. The number of visits reached nearly 7.2 million, against a target of 6.8 million. Usage of virtual services multiplied manifold from the outset. In 1996, when visits to the virtual library were counted for the first time, there were 2.1 million. In 1998 there were 5.9 million, and in 2000 – no less than 15 million. Helsinki population is about 551 thousand. Eight of ten citizens use City Library’s services and 44% hold a library card. The library numbers among its customers many people born abroad: there were 60 different languages indicated as mother tongues in the readers’ register. The average Helsinki citizen visited the library 13 times per year and borrowed 16.6 items during 2000.

Table 1: Main performance indicators of the Helsinki City Library. Source: Annual Report, 2000. P. 21

The purpose of the HCL is to provide ”fundamental civic service available to everyone. As a part of the worldwide network of libraries, we offer customers unrestricted access to sources of culture and information. On an interactive basis, we develop the library services Helsinki residents need so that they can be active members of society and enjoy life more fully” (Annual Report, 2000). Library’s vision 2010 is ”Serving locally, acting nationally, esteemed internationally, the whole nation’s ”hybrid library”.

The Cable Book, a branch of HCL, has offered Internet to patrons since February 1994, and this has been claimed as first project anywhere in the world to start a WWW server in a public library (Internet Guidelines…, 1996, p. 5). The innovation and creativity never stops at HCL: on January 31^st, 2001, HCL opened iGS: Information Gas Station, ”a wholly bookless library equipped with the latest technology, fast Internet connections, GSM phones, DVD and CD-ROM hardware and very well equipped workstations” (Juntumaa, p. 118). The motto of the information gas station became ”ask whatever in any way you like”. The outer form of the iGS took shape of ”ye good old gas station” but instead of gasoline you can get information there. The Information Gas Station is in any citizen’s access, ”turning the taps of the information society on for each and everyone” (Juntumaa, p. 118).

Instead of conclusions.HCL’s success story tells us that the driving forces in a public service institution are basically the same as in business organization. Modern, out-front library has to be technologically developed to be able to offer up-to-date services, but it also has to be organizationally reshaped and reconstructed, it is equally important to be both socially ambitious and entrepreneurial.

Libraries that pay attention not only to their operations but also to the organizational development and do it in a business-like, entrepreneurial manner, have not only much better results, but also higher recognition and visibility, international reputation, become ”centers of excellence” among other libraries. They ”dictate the fashion”, they set the standards, and they are the benchmarks for those who are looking for innovation and change. For those who not, such libraries are just another world, an exception. But this is an exception that is an exemplar.

References

Best, Jill. Supporting the public library entrepreneur // The Bottom Line: Managing Library Finances. Vol. 14, No. 3, 2001. p. 132–144.

Clair, Guy St. Entrepreneurial Librarianship: The Key to Effective Information Service Management. London et. al.: Bowker-Saur, 1996. 177 p.

Drucker (1985). Drucker, Peter. Innovation and Entrepreneurship: Practice and Principles. London: Pan Books, 1985. 306 p.

Drucker (1995). Drucker, Peter. The discipline of innovation // Harvard Business Review, 1995. November-December.

Guth, W.D. & Ginsberg A.Guest editors introduction: corporate entrepreneurship // Strategic Management Journal. 1990, no. 11, p. 5–15.

Internet guidelines for the Helsinki City Library / Erkki Lounasvuori; Internet working group. Helsinki, 1996. 37 p.

Juntumaa, Jouni. IGS Information Gas Station // Libraries in Knowledge-based Society: Proceedings of the 3^rd Nordic-Baltic Library Meeting, October 25–26, 2001, Tallinn, Estonia. Tallinn, 2001. P. 118–120.

Pantry, Sheila. Becoming a Successful Intrapreneur: A Practical Guide to Creating an Innovative Information Service. London: Library Association Publishing, 1998. 98 p. (The Successful LIS Professional Series).

Peters, Tom & Waterman, Robert H. Jr. In Search of Excellence: Lessons from America’s Best-Run Companies. London: Harper Collins Business, 1995. 360 p.

Samson, Daniel & Challis, David. Patterns of Excellence: The New Principles of Corporate Success. Financial Times, Prentice Hall, 1999. 256 p.

Stopford J.M. & Baden-Fuller C.W.Crafting corporate entrepreneurship // Strategic management journal. 1994, No. 15(7), p. 521–536.