When (and How) to Take Big Risks

The social impact sector isn’t known for being very risky. In fact, it’s often quite the opposite. Too many orgs play it safe, afraid of over-scrutinization (the double standard is real here) and hoping to protect their mission and resources.

But here’s the thing — sometimes the most dangerous thing is playing it too safe.

In this episode, Jonathan and Eric dive into the topic of risk: when to take it, how to de-risk it, and what to expect if it doesn’t pay off.

We cover actionable tips for when (and how) to take risks, like:

→ Be bold, but calculated: Every impactful org will face a time when they need to try something big — even if it’s daunting. Develop a framework to know which risks align with your mission and will benefit your team.

→ Build resilience for the outcomes: Not every risk will pay off, but treating failure as a teacher rather than an enemy is essential for growth.

→ Communicate your “why”: Take your team and stakeholders on the journey with you. Being clear about the purpose of the risk and the goal it serves builds trust and sets everyone up for success.

Whether it’s experimenting with a new program, trying fresh approaches in fundraising, or tackling a major pivot, we believe risk-taking can — and should — have a place in social impact.

Listen to the full episode for deeper insights and personal stories from Jonathan and Eric.

Episode Highlights:

• [02:15]: The cautious nature of the social impact sector, vs. the high-risk, high-reward environment of startups
• [03:05]: Developing a framework for taking calculated risks in organizational settings
• [03:32]: How to navigate risk daily - seeking opportunities for high leverage while mitigating potential losses
• [05:18]: Eric recounts his early career and a pivotal risk he took to secure workspace, which transformed his business
• [08:09]: Importance of having a support system in place when undertaking major risks, ensuring buy-in from those affected
• [10:45]: Jonathan emphasizes the value of running ideas by trusted colleagues and advisors to de-risk risky decisions
• [13:08]: Dangers of hesitating mid-risk and the parallels between sports and business risk-taking
• [16:09]: Clear communication with teams when embarking on risky initiatives

Quotes:

• "The social impact sector is not really known for being a very risk-taking sector, but there are examples of moonshot initiatives that have really paid off." - Eric Ressler [02:15]
• "I think about risk-taking absolutely every single day, constantly looking for the highest leverage activities to deepen our impact." - Jonathan Hicken [03:32]
• "At the time, getting a desk at a co-working space was a very big risk for me because I had very little income, but it was the best decision I made." - Eric Ressler [05:18]
•  "Especially for the biggest risks, you have to surround yourself with people who understand the risk and are willing to go on that journey." - Jonathan Hicken [08:09]
• "I start to ask myself, 'What's going to happen if I don't take the risk? What’s the status quo mean for the business or my life?'" - Jonathan Hicken [10:45]
•  "If you're going to take a big swing or a big bet, you've got to fully commit, or that actually becomes more risky in the long term." - Eric Ressler [12:14]
• "If you don't have a clear goal for your risk, you won’t know how to de-risk it or if it’s paying off." - Eric Ressler [14:27]
• "If I were to do it again, I would build a much more comprehensive communication plan to ensure buy-in for this risk." - Jonathan Hicken [16:59]

Resources:

• In Defense of Moonshots: True Social Innovation Requires Taking Risks
• Dare to Be Bold: Making a Case for Better Social Impact Branding
• Jeff Bezos is A/B Testing Philanthropy. Here's What He'll Find.
• To Solve the World's Problems, Start by Building Consensus
• The World is in Crisis—Now is the Time for Your Nonprofit to Act

Transcript:

Eric Ressler [00:00]:

Jonathan, you've known me long enough now to know that I have a habit of collecting new hobbies. I do. And my latest new hobby is mountain biking, which is funny because I've lived in Santa Cruz for 15 years almost at this point, and I've meant to start mountain biking for exactly 15 of those years and finally just did it. But the other day I was out riding my mountain bike and with most new hobbies, I am not very good at mountain biking, but I really enjoy this early period of a new hobby of going from a complete novice to a slightly less complete novice, and I'm kind of in that space right now. The other day I found myself going down a trail and sitting at the top of a large rock, looking down at it, trying to calculate how I would get down the large rock on my mountain bike with my lack of skills.

[00:49]:

And I had a moment of clarity that was like, why am I doing this? I don't have to do this. What do I have to gain by doing this? I make it down and I feel proud. Okay, that's cool. What do I have to lose by doing this? Well, I could get seriously hurt, which would impact my family and my life and my work life. And I promptly decided to walk around this feature and continue on the easier part of the path. But it got me thinking about when and how to take risks in a more business setting because I have also experienced some of the most important growth points personally and professionally when I have taken a big swing or a big risk or taken a big bet. And I know that you are also kind of a risk taking executive director and professional, and so I thought this would be a good topic to talk about when and how to take risks in social impact organizations. Are you in?

Jonathan Hicken [01:43]:

I cannot wait.

Eric Ressler [01:43]:

Okay, let's do it. 

Jonathan, the social impact sector is not really known for being a very risk taking sector. Agree,

Jonathan Hicken [02:16]:

Yes.

Eric Ressler [02:17]:

Yeah, so there's a lot of reasons for that I think, but there's also some examples of very highly risky moonshot style initiatives or projects or efforts that have really paid off. And when I think about, let's just look at the venture capital world or the startup world, venture capitalists and startups know that nine out of 10 of their startups and ideas are going to fail, but they also know that probably one out of 10 are going to be wildly successful, and they do that calculation and they realize that is going to pay off. There's a lot of discussion in this space around moonshots and these big bets versus more just funding things that are already proven. That's actually not really the point of this episode. What I want to talk about for our listeners is more how do you know when and how to take risks in a calculated and constructive way for your organization, and how can we develop a framework or a thought process or even just more of an intuition around how we might do this? I have some ideas on this, but I'd love to start with just hearing how do you think about risk taking or do you even think about risk taking in your daily work?

Jonathan Hicken [03:26]:

I think about risk taking absolutely every single day. And the way I would think about risk or the way I would define risk is the highest upside, knowing that there may be some potential, not just neutral results, but some negative results. So I'm constantly looking for the highest upside, the highest leverage activities to deepen our impact or to create a more financially sustainable organization. I don't believe I'm doing my job if I'm not looking for those opportunities constantly. The thing I'm having to balance is what do we risk or what do we lose if this goes poorly? Now, risks can come in all sorts of shapes and sizes. I mean, it can be new programs, new revenue streams, all the way down to putting out a new formatted email newsletter or trying a new line of pitching a membership to the people that are walking through our front door. So risks come in so many shapes and sizes, but ultimately it's about where's the leverage, where's the upside, and how does that compare to the risk?

Eric Ressler [04:26]:

As I reflect back on some of the bigger risks that I've taken in my work starting and running Cosmic, I tried to think about how did I make those decisions and how did I know it was time to make those decisions? And for me, I think this is something that I've built over time as an instinct or a gut level choice in certain ways. Most of my risks have paid off quite well for me, so let me tell a couple of stories about my risks and they start really small. When I was first getting started running cosmic, I was working out of my bedroom and I was renting a house with a bunch of friends who were working restaurant jobs, and I was finding it hard to concentrate during the day when they were off work trying to get me to go surf and riding my bike, and I was trying to get work done and I realized, Hey, this is not sustainable.

[05:12]:

I need to build myself or come up with some kind of way to have some private focused space. And at the time, I saw an opportunity to get an office, or at the time it was actually just a desk in a co-working space. And at the time, that was actually a very big risk for me because I had very little income. I was already struggling to pay rent. This was just added expense, but I knew that what I was doing was not sustainable and I took that risk, and that is probably the absolute best decision I've made in my entire life because that led to so many opportunities and networking and really supercharged our business at cosmic and made it what it is today. And at the time, I knew it was risky. I looked at the downsides of that risk, and I also knew that what I was doing was not sustainable. So it was almost like a forced function that led to a risky choice. There were probably some less risky choices. I could have probably had some discussions with my roommates and said, Hey guys, I really need to focus. Could you please just not bug me during these times of day? Maybe that would've worked, maybe it wouldn't. But I chose a much riskier path, and that path ultimately really paid off for me.

Jonathan Hicken [06:19]:

What were the risks you were considering? Was it the possibility that the business might need to shutter? Was it that you may not be able to afford living here anymore? What were the consequences of a decision at that point?

Eric Ressler [06:31]:

Yeah, I mean, at the point the business was me. So the real consequences were I would not be able to afford to pay rent and the rent for my office space at the same time and then have to give one or two of those up or go into debt or something. So there were some very real risks at that point. Early in my career, I tend to not really focus on the potential negative outcomes of risk taking too much. I do acknowledge them. And even going back to the mountain biking story, it took me a while. I was so focused on the positive outcome and what I was hoping to do and how I was going to find a line to get down this feature. Then there was a moment of clarity that was like, why am I doing this right? I've had similar moments of clarity in business risks that I've taken before.

[07:14]:

I'll tell another story about another risk that we've taken. After about seven years of running Cosmic, we decided to focus only on social impact work, what we're doing today, and that was a very, very risky decision. But at the same time, we were in another kind of forced function where we were stalling out. We were not making progress financially, we were not making progress creatively, and I knew that we needed to change something and I knew that we needed to do something big. And so luckily we had some great advisors to help us with our positioning. We explored a lot of different things and we mitigated that risk through research and through discussions with advisors. So we didn't just blindly take that leap of faith. We spent time looking at how can we de-risk this risky thing, but still place a really big bet? So I'm curious if de-risking is something that comes into play for you

Jonathan Hicken [08:04]:

All the time, which is sort of contrary to the idea of taking a risk, right? It is like how do you de-risk risk? It's no longer a risk, but it's a really important step and it's something that I have also begun to pay more attention to over the years. And one of the things that's jumping out to me about your story of the strategic shift to social impact focus is that you had a group of people who were willing to take that risk with you and that there was a certain number, whether they're your advisors or your team, maybe in that case by that point, it was your family who was also on board with taking this risk. But I think that's a really important ingredient to risk taking is that the people who potentially may be impacted by both the positive or the negative consequences of the risk are on board to take that risk with you in a business setting. That could be your investor board, that could be your volunteer board, your team, your donors. But I do think that especially for the biggest risks, you have to surround yourself with people who understand the risk and are willing to go on that journey too.

Eric Ressler [09:17]:

The other thing that I reflected on in prepping for this episode and trying to figure out how do you know when it's time to take those risks? And what I realized is that by the time I actually pulled the trigger on one of those risks, I've been thinking about it for a while. It's not impulsive, it's calculated often for me behind the scenes, it's almost like a crazy idea that I just can't get out of my head. I have the idea, I'm like, yeah, that's kind of crazy. We're not going to do that. And then a couple days later, it pops back in my head. I'm like, no, no, we're not doing that. And then a week later it happens and then another week later, and then finally I'm like, I guess we have to do this because it just won't leave me alone. Have you experienced that?

Jonathan Hicken [09:56]:

Absolutely. The way it shows up in my head is I start to ask myself a series of thought experimenting kind of questions. So for example, it may be, well, what's going to happen if I don't take the risk? What's the outcome there? What does the status quo mean for the business or my life? What is the potential upside of this risk in changing the business or changing my life? Likewise, what are the risks? What are the potential negative outcomes of taking this risk? But I agree with you and I think it's really healthy thing to sit on these crazy ideas that just won't leave your head and sit on them for months. Maybe write about them, talk about them with your family, your colleagues, your advisors, your board, whomever, shop it around. That's a step that I take a lot is I have this crazy idea and I'd love to run this by you and just it's getting that directional feedback. It's getting this gut check on whether or not I'm on the right track with this thing.

Eric Ressler [10:50]:

I think I do a lot of that intuitively as well, where I do talk to friends and advisors and family and just kind of tease the idea out and hear people's reaction to it. Now, I think you have to be careful with that because a lot of times, especially if people don't have the full story, they're going to want to protect you. They're going to want to say, Hey, why are you doing this? You don't need to do this. And they might be right, but they might not be right either. And I think that that's just something that you have to develop an intuition for over time. And I think for me, this litmus test of will this idea just not leave me alone? Another example, this podcast has been on my wishlist for cosmic for literally years, and there were reasons why we didn't want to start it and we couldn't start it.

[11:35]:

And finally it just got to the point where I was like, we are going to do this now. It is time. I'm tired of having this on the back burner, and I believe strongly that it's a worthwhile endeavor and a worthwhile project for us to do, and I'm so glad that we have, and I wish now that we had done it sooner, I'm excited to continue the podcast. Another just example of these big kind of bets and big swings, and I think you have to be prepared to do it well. And now I want to transition into, if you are going to take a big risk, how can you make sure that you are more likely to have that risk pay off and not fail? And I have a couple ideas for that. Going back to sports. I've participated in a few different kind of risky sports over the years from surfing to climbing, now to mountain biking.

[12:20]:

One thing I have learned about risk taking as it relates to sports that I think is also very relevant to business is you've got to go full send. If you are going to take a risk, you cannot hesitate on that risk. The times I've been the most injured doing any of these sports has been when I've hesitated. If I'm about to drop in on a large wave, I'm like, ah. And then you end up going over the falls. Or if you are getting tired and you're climbing and you do a move and you're not really quite prepared to fully commit, that's when things go wrong. And I think that that's also true if you're going to take a big swing or a big bet or make some kind of risky move, you've got to fully commit to that move or that actually becomes more risky in the long term.

Jonathan Hicken [13:01]:

I think you bring up a really interesting point here, which is that bailing from a risk can actually produce really bad outcomes, especially in a business setting. For example, if you're constructing a major pivot for your social impact organization and you've got a lot of the pieces in place and you start to roll out the new messaging or the new imagery or the new products or whatever it might be, and you back off from that after a certain level of commit but not all the way committed, your audience may start to wonder what's going on back there? It may start to lose trust. Who is this brand I'm interacting with and what do they stand for? There is a real corollary in the social impact space to the sports one where of like if you're going to take a risk and you really want to go for it, you really got to go for it.

Eric Ressler [13:50]:

Yeah. Okay. Another tip for risk taking is if you're going to take a risk, you have to make sure that you're clear on the goals and the outcomes. Why are you taking this risk and what are you hoping to achieve through taking the risk? Because if you don't have that clear, first of all, you don't know how to prepare for the risk. You don't know how to de-risk it, and you don't know if the risk is paying off. So I think as much as this is an exercise in intuition, in my opinion, you still have to be able to kind of tie the outcomes and the goals back with objective metrics or some kind of evaluation. Have you done that in any of the riskier endeavors that you've taken a part in?

Jonathan Hicken [14:36]:

Absolutely. I'll use a personal example also where I've decided to make the pivot from the B2B SaaS tech space into the local social impact museum space. That was huge, I was putting potentially major earnings on the table, and I knew that that was potentially going to impact my family and my career. On the other hand, I considered, well, what does success look like for me as I take this risk? And for me, one of the things I was seeking was a connection to my community and a connection to purpose in my work. And I knew that the upside was big enough that it was something I was willing to do, even though I needed to take a step back in my earnings for some period of time. And luckily, my wife at the time was totally on board with this. And so we were able to make this risk together in a way, and I knew I had the support from my family to do this, but it is, I had a real clear purpose for making that risk. And thankfully in this case, I believe it's also paid off.

Eric Ressler [15:36]:

So if you are going to take a really large risk at your organization as an executive director or any kind of leader, one of the things that I think is absolutely critical is to be very clear with your communication with the rest of your team around why are we taking this risk? What are we hoping to achieve by taking this risk and acknowledging that like, Hey, this is a risky thing that we're doing. This is a big bet that we're placing, but we're going to do it and we're going to fully commit to it. And here is why. Because I think if you don't do that and you kind of do all that calculating in your brain or just silo that just to the leadership team, but you don't communicate that to your broader group of stakeholders or even your community, people might start to wonder, what are they all doing here? Why are they doing this? This is such a big risk that they're taking, or this is a big move. I don't understand why they're doing this. So I think clarity and communication is actually really important in any of these kind of big moves.

Jonathan Hicken [16:28]:

This is an area where I feel like I have actually failed in executing a big risk, and it's for the current organization that I'm working on. And I think I realized this a little bit too late. We were constructing a shift in some of the stories we were telling and some of the science that we were sharing. And I didn't do a good enough job of communicating that change internally and externally along the way. I took a little bit too much of an iterative approach here where we tried things and measured if these individual things were working or not. And we've learned a ton, and I still very much believe in this shift for the organization. However, if I were to do it again, I would've built a much more cohesive and comprehensive communication plan to all of these stakeholders to make sure that we had buy-in to this risk that I think would've, would've really accelerated this shift for us.

Eric Ressler [17:15]:

And I would totally echo that. A lot of these risks that I've taken over the years, I think I could have done a better job in communicating with the rest of the team. Why are we doing this? How does that affect your work? What are some of the trade-offs? Hindsight bias, it's always easier to know what you could have done better in the past, but a good learning experience and one that hopefully will help any listeners who are considering making a big move to learn from our mistakes at least. Okay. The last tip that I have, if you're planning on taking a big risk or placing a big bet is you have to be willing to fail. You have to be willing to accept failure as not being a failure, but being part of the process of being risky and taking big risks and placing big bets.

[18:05]:

And in my reflection, I've had some pretty micro failures along the way. Plenty of failures along the way. Frankly, my biggest risks have all panned out, and that's making me feel like maybe I'm not actually all that risky, or maybe I need to be a little bit riskier in some of the choices that I make in running cosmic and in doing our work. But I do think that failure is always seen as negative, especially in our culture and especially in the social impact space where this is important work that literally lives might be on the line in certain cases for this work. But I do think that failure is a real option and an option that you have to plan for and an option that you need to be approaching from a constructive place. And what I mean by that is being willing to learn from your failures and not taking them too personally. Now, if all of your risks are failing, that is a signal that you are maybe not being very intentional with your risks or strategic with your risks, or maybe you're just not very good at the risks that you're taking, and you should recalibrate from there. But I just want to make the point that you have to be willing to write it off and move on and continue to move forward if some of your bigger swings don't end up paying off.

Jonathan Hicken [19:14]:

I think that risk taking is a skill that can be developed. I don't think this is a nature kind of trait. We're either born as risk takers or we're not. I think that we can develop that skill and what you're talking about is a really important fundamental piece of the puzzle where you can fail and it's not going to damage how you feel about yourself or cause any imposter syndrome or whatever it might be. That is something that can be developed. And my tip is start small. If you know about yourself that you struggle with taking these big risks, change up something about how you work or how you show up or some small elements of your work, and start with something like a smaller risk that maybe feels big to you and start there and develop some comfort with it. It's probably worth mentioning that some of the risks that we've brought up today that we've made as individuals, it's probably worth acknowledging that we have life circumstances that allow us to do that.

[20:06]:

And so maybe not every listener has the same privilege that we have to take these risks. And also the other thing I think is worth noting is that a really important piece of the risk calculation point in my head is who is going to potentially carry the burden of failure? And if it's just me, that's something I can swallow. That's something I can deal with. I failed enough that I know how to roll with those punches, but it's unfair of me to place the burden of failure on somebody else, especially if they're not bought into those consequences to begin with. So I really do think that especially as you start ramping up the size or significance of your, it's really important to ask yourself those kinds of questions.

Eric Ressler [20:50]:

I want to add a couple more points before we wrap up today. One that I've learned is that the perception of what failure looks like is often much larger than what failure actually looks like, right? So sometimes the fear and the uncertainty of what could go wrong, we build up an overplay in our heads. And when something even does fail, and of course it's a bummer and you wanted it to play out in the way that you hoped for, you realize like, oh, that wasn't all that big of a deal. I was able to get through that. Yeah, there was some negative implications. And again, to your point, who's taking the burden? We want to be intentional about that and respectful there, but you're more resilient than you think you are. In my experience around taking these risks and failing. The other big point that I want to make is that often the most risky thing is not taking the risk at all, is playing it safe.

[21:40]:

And people think that playing it safe is safe, but I think the playing it safe is often very risky, especially when it comes to building a brand, doing your marketing, investing in some of the things that we're talking about building out in these episodes. I think you have to be bold and risky to break through and to stand out as a brand today. Maybe you're a little riskier there and you're not as risky when it comes to hiring or when it comes to evaluating your impact and some of these more mission critical things. So I think it's about where are you applying your risk has a big influence around how risky you should be. I wish that the social impact sector were riskier in general, and that there was a culture around failure that were more constructive and healthy. Maybe not all the way to the point that the startup world and the VC world is where it's overly inflated and propped up by investors who are looking on 10 x returns, because I think that can go too far. But I wish that there were a little bit more of a culture of embracing building in public and failure and not seeing failure as failure.

Jonathan Hicken [22:41]:

You talked about inaction as action, or at least you alluded to it, right? And when it comes to risk taking, sometimes not making the decision is a risk because maybe the world is changing around you or the problem that you're addressing is changing, or your audience is changing. Something is changing. And so by not changing yourself, that is inherently a risk, right? So I do think that we probably unintentionally are taking risks all the time in the space and just not noticing it, and sometimes our organizations are suffering for it.

Eric Ressler [23:10]:

Completely agree. This was a fun one. A little bit different from some of our other episodes, but I enjoy it. So thanks, Jonathan, for your input on this one.

Jonathan Hicken [23:17]:

Likewise. Thanks, Eric.