Lesson 3: take risks
Solutions to longstanding social problems have to be innovative. If something is not working, then you have to be creative and think outside the box to find something that will make a difference.
Innovation and creativity, however, always come packaged with an element of risk. No matter how much you research and plan, if something has never been tried before, thereâs always the chance that youâll fail and lose precious resources in the process.
Every social enterprise knows this, but as there is simply no way of avoiding these risks, they must learn from the outset to manage the risks and take valuable lessons from any failures.
Nathalia Arcuri, a Brazilian entrepreneur and founder of financial education group Me Poupe, agrees. After growing her business for six years and helping countless Brazilians take control of their financial lives, she has learnt to ânot be afraid of errors, as long as you are learning from them. They also help shape you and your business.â One way to manage this fear, Arcuri said, is to remember who youâre helping, and the long-term positives: âThink about who you are doing this for, that’s the most important thing.â
In part, this is done through careful mitigation of the risks from the outset. Each social enterprise must begin with a deep understanding of the problems to be solved, and a robust plan for the solution they want to implement. At the same time, social enterprises will often experiment in small ways â in authentic, real-world scenarios â before scaling up. This enables them to gauge the effectiveness of their solution without exposing themselves to catastrophic failure.
An even more significant idea that social enterprises have adopted is to change the narrative around risk-taking. In fact, for social enterprises, taking risks is something to be celebrated, not avoided, and all of their communications reflect this. A culture of risk-taking is something to be encouraged, and successes to be amplified at every opportunity. In rewriting their story to be a positive one, even when there are missteps, they create a message that communities have no hesitation in getting behind.
The benefits: many for-profit entrepreneurial start-ups take risks too. But as the business becomes established and profit is secured, the tendency is to move away from innovation and stick with what already is known to work. After all, the only problem theyâre trying to solve is that of how to make a profit. Once thatâs done, playing conservatively is the safest way to maintain it.
This is a mistake. âNo risk, no rewardâ is still so often quoted for a reason: because itâs true. Businesses that forge their own paths and innovate may stumble occasionally, but in the long run will find greater success as they reach untapped niches and develop a positive reputation as leaders, instead of followers.
Would you plan âa six-month world tour starting in February 2022, across 20 countries to cover the stories of 50-plus social entrepreneurs, in the middle of a global pandemic and significant geopolitical instabilityâ? Many businesses would simply delay this until the situation (and the outcome) became certain.
But for Shaan and his fledgling enterprise, delay was not an option. âFrom the perspective of SDG Impact Stories, we had no choice but to take risks,â he said. âAnd despite the risks, it paid off. We have already covered the stories of more than 25 entrepreneurs, met numerous inspiring change makers, created all the content we wanted and gained perspective about social business worldwide. At the end of the day, these were calculated risks and all of them were outweighed by the upsides of going forward with the tour.â
This process of mitigating risks, of rapid prototyping and smaller, in-the-wild testing, also improves overall agility for the business, helping you to keep up with the changing demands and trends of the market.
Finally, having a company-level attitude of risk-taking also fosters and encourages risk-taking, problem solving, and out-of-the-box thinking among employees. In turn, this increases employee engagement, as they become an integral part of the problem-solving process while also feeling like theyâre part of something innovative.