BRIAN KENNY: On September 17, 1987, advocates for people with disabilities marked a major milestone, the closure of the Willowbrook State School in Staten Island. Since opening in 1945, Willowbrook had become the largest state-run institution for people with disabilities in the United States. It had also come to epitomize the absolute disdain that many people had for some of the most vulnerable among us. Severe overcrowding, rampant physical and mental abuse of residents, subhuman living conditions, and lack of medical care. Such is the legacy of Willowbrook. But it’s also true that the institution’s demise led to the passing of the Americans with Disabilities Act in 1990, one of the most comprehensive civil rights laws in our country. The ADA has helped to ensure that people with disabilities have access to education, housing, and human services, and it also prohibits employment discrimination and requires employers to make reasonable accommodations for the disabled. But what exactly is reasonable? Today on Cold Call, we welcome Professor Rick Ruback and Joe Higgins to discuss the case, “Lucky Ones.” I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Podcast Network.
RICK RUBACK: Thank you so much.
JOE HIGGINS: Thanks, Brian. Great to be here.
BRIAN KENNY: This case, I’m going to tell you something. I’ve done 240 or so episodes of Cold Call over the last coming up on 10 years. I have never teared up, not once, in doing a case until I read this case. And I teared up more than once reading this case. I found it to be joyful, but also really provocative in the issues that it raises. Rick, I want to start with you and ask you what the central theme of the case is, and what your cold call is to start the discussion.
RICK RUBACK: Sure. The real central theme of the case, deep down inside in the case, is the question of whether businesses, whether for-profit enterprises, can help solve some of the tragic, I think tragic, unemployment and underemployment of people with disabilities. I think it’s a huge issue and a huge opportunity for our country. We teach the class in two different courses. One on a course that I teach with Robin Greenwood called, Market Perspectives. And there we really talked about the societal kinds of issues. I do have the opening question of whether the lack of employment opportunities for people with disabilities is a societal problem. That’s what we did in that course. We also teach it in the “small firms” course. And in that course, the opening question is, what are Katie and Taylor’s objectives? What are they trying to accomplish? Because as you know, they’re not about making money.
BRIAN KENNY: Right, right, exactly. And Katie and Taylor, we’re going to talk a lot about them. They are the protagonists in the case today. Jill, let me turn to you for a second and ask, I’m always curious about why faculty decide to write cases, what makes for a good and interesting case, and how they learned about the firm. So, I’m curious about how you discovered Lucky Ones and also why you chose to make it a multimedia case. I think I have my own thoughts about that. But go ahead and let us know how you heard about it and why you decided to write it.
JOE HIGGINS: Sure. Just by way of background, I did “Entrepreneurship Through Acquisition” (ETA) a few years after I graduated HBS in the mid-90s, way back in the Stone Ages, and had the privilege over the last two years of sitting in with Rick and Royce in their extremely popular ETA class, FMSF. (Financial Management of Small Firms) And we were at lunch and I overheard Rick say to Royce, I’m trying to do this game changing case. And it resonated with me, Brian, because I have a sister with Down syndrome and am very familiar with this community. And I said, Rick, I think I can help you formulate this game changing case. My wife, we live in Park City half the year. My wife works with the National Ability Center and I know the community out here and via that community, we of course know The Lucky Ones, which is based in Park City and know the founders, Taylor and Katie extremely well. And via that introduced Rick and hence the idea was born.
BRIAN KENNY: I meant to mention in the introduction, Rick is a fellow podcaster. Joe, you mentioned Rick and Royce. They launched a podcast. When was it, Rick? Over the summer?
RICK RUBACK: That’s right. Our first episodes I think aired in June and our first season ended relatively recently, just a week or so after Labor Day. It’s called “Think Big, Buy Small” and life is just not complete if you don’t listen to it.
RICK RUBACK: Brian, can I comment on one of the things that Joe said, was first of all, how gracious Joe was to introduce us into his network. The Lucky Ones is one of a two-part case series. The Lucky Ones is one of them. We have another one called Neurodiverse Employment, which features kind of the bigger business and nonprofit solutions to unemployment of people with Down and other neurodiverse conditions. But I also wanted to talk a little bit about why the multimedia case. And that was just so important in this because what I think is really special about the multimedia cases is when you have a situation that you just can’t describe very well in words. The pictures and the film and the interviews just bring it home. And our students, you know, many of them have life experiences. Most people know somebody with a disability, but they don’t really think about what it’s like in an employment setting. And the way the multimedia cases go is there’s a couple of paragraph description and then there’s maybe a minute or two or three or four, depending on the topic of interview and visuals, which explains some of the things that had been discussed. For those people who are used to reading the paper cases, it’s a little bit paper case and a little bit documentary, but it feels so much more alive.
BRIAN KENNY: Yeah, I agree. It brings the humanity right to the surface. It’s really powerful. And I alluded to that just in the opening. Let’s talk about our protagonists in the case. Katie Holyfield and Taylor Matkins are the founders of The Lucky Ones Coffee. Joe, maybe you can tell us, what was their vision when they started this?
JOE HIGGINS: They both started at National Ability Center in Park City. And there is this program they started and ran called COACHE, which is essentially a life-skill job-skill program for adults with intellectual, developmental, or physical disabilities. It’s a nine-to-10-week program, and it prepares them for employment, quote unquote, in the real world. But what they realize is it’s really hard finding this community employment. And they thought a solution they would start is, well, why don’t we do it on our own? And hence the birth of Lucky Ones as a way to create employment fulfillment opportunities for this community. So, that’s what they pursued and they’re doing it well right now.
BRIAN KENNY: Yeah, the case does talk about their time at the National Ability Center. And I’m wondering how that might have influenced the decision that they made to go their own way rather than hooking up with a franchise and how it sort of guided them in their strategy.
JOE HIGGINS: National Ability Center is an incredible place. You know, as Rick just spoke to, it’s in one of the cases as well. And there’s over 2,000 people who come through the National Ability Center with some disability from all over. And that was really their motivation first, verses, as Rick said earlier, it wasn’t really to run a business or run a coffee store. It was to change the world and provide opportunity for this community. A coffee store happened to be the best vehicle to do that.
RICK RUBACK: And as the case reports, they say that they knew nothing about how to run a coffee shop when they started the coffee shop. There’s an interview in the case with the mayor of Park City and the mayor of Park City, one of the coffee shops, I’d say their flagship really, is in the library. So, you walk through the coffee shop to get to the library. And, what a great location for a coffee shop. Right. So, they obviously had to enter some process with the city and to get that. And, the mayor reports, and it’s in the video, that it’s the very first time she had granted a contract to somebody who had actually no experience doing what they were contracted for.
BRIAN KENNY: Sounds like something you might read about in the papers, you know, six months out.
RICK RUBACK: Only this time it was for good. And, and, and just to build on your comment, Brian, just a little bit. So, they asked them to negotiate the rent and they said, if the rent’s negotiable, we’d just as soon not pay any. And he said, okay. Well, we never hadn’t thought of that, but I guess that’s fine. So, Park City is a relatively wealthy community. They can, I think, afford it, but they give the Lucky Ones the space without charge, at least at the start.
BRIAN KENNY: But what was, how did they pitch it? Like, well, how did they convince, you know, these folks who were probably pretty skeptical about this idea? How did they convince them to take it, to take it the leap of faith?
RICK RUBACK: Well, I think, Joe, you probably have more thoughts on this, but I think that Park City had made a commitment to inclusion as one of its town objectives. I think the minority representation, the people who struggle with employment, are maybe less in a place like Park City than it is in some of these other places in our country. And so, when they look to inclusion, the idea of including people with disabilities and thinking about solving that problem I think appealed to them.
BRIAN KENNY: Joe, do you want to add something?
JOE HIGGINS: Yeah, exactly. Rick nailed it, Brian. Katie and Taylor really did a good job of using Park City’s stated mission of inclusion. You know, they built their pitch on that. And interestingly, this is a beautiful old historic building, the library in Park City, but they had trouble keeping a successful coffee store up and running there because they really couldn’t get a committed business to stick to it. And Katie and Taylor did a great job of not only the inclusion plank, but we’ll make this into a community feel. We’ll have programs here. And it opens up into a field, a beautiful park, and they’ll do parties…of really pulling the community together in an in an inclusive way.
BRIAN KENNY: Joe, can you tell us a little bit more about the operation itself? Because we haven’t really dug into the size and scope of it. I mean, it’s a coffee shop, but how many employees do they have?
JOE HIGGINS: There are two stores, one in Park City, one in the neighboring community called Canis. They have roughly 40 employees on the payroll. That can change depending on seasons. There is a long wait list. So, it’s an accordion of about 40 employees and they are very close to opening a third store. More notes to come on that over the next month in the Salt Lake area.
BRIAN KENNY: Yeah. We should also talk about the landscape for people with disabilities getting hired. Rick, I’ll ask you this. You know, just how difficult is it? What are some of the challenges that these individuals face? And what are some of the perceptions that employers might have about hiring people with disabilities?
RICK RUBACK: That’s such a great question and such an important question. People with disabilities, it depends on the kind of disability and scope, of course. The Lucky Ones deals primarily with people who have Down syndrome and other related neurological disabilities. For them, what was fascinating as we developed the case was that most of their employees had no plan B. That is to say, there were almost no other employment opportunities. There were some employees who, because of their exposure to Lucky One and their work at Lucky One, had been able to extend that to working, say, as a welcomer at a hotel or other kind of forward-facing activities. But what is remarkable is just how few employment opportunities there are. For people with disabilities, one of the things that’s so shocking is that until they’re 21 years old, the state provides an enormous amount of resources through high schools, through educational programs, through occupational programs that basically keep people with disabilities fully engaged in their world. And then there is what’s called the cliff and the cliff happens and immediately all those services disappear. And unless there’s some employment opportunity, many of these people with disabilities have simply nothing to do.
BRIAN KENNY: Mm-hmm.
RICK RUBACK: And, so much of the progress they make during those years, before they hit the cliff, sort of disappears because they’re left alone. They don’t have anything to do. They don’t have a purpose. People with disabilities are just like everybody else. They need a purpose in life and the purpose drives them forward.
BRIAN KENNY: I would imagine some of our listeners are probably, you know, working for employers that have people with disabilities working there. And I mentioned the ADA Act in the beginning about providing accommodations for people, reasonable accommodations. That word reasonable, I think, is probably one that people will define in a way that suits their needs. But I’m wondering, you know, for employers that are thinking they want to do this but have some concerns, what might some of the challenges be that they’re concerned about? Joe, why don’t you grab that one?
JOE HIGGINS: Sure. And Brian, just building off what Rick said, another part of it is exactly to your question, it’s hard. Where do I go? If I hear this, great idea. But where do I go? Someone like me, again, I have a younger sister, so I know about the community. I know where to go. There isn’t somewhere, you know, an association that does hiring for this. It’s different by state. But typically there are these state agencies or city or other agencies which you can call and find out, you know, and explore how to create employment opportunities for someone within this community.
BRIAN KENNY: Mm-hmm.
RICK RUBACK: Brian, can I just build on that a little bit more? One of the things that is intriguing that I learned in my research for these cases is that employees with disabilities provide a great opportunity as well as a bit of a challenge. So, the challenge is simply finding the right fit. You need, I think this is true about all of us, but you need to match the job with the skills and interests of the person. And that’s true. I think for all of us, it’s particularly true for people with disabilities. But if you make that effort, you will get an employee that will be very trainable and once trained, won’t ever leave. So, what you find is, you know, many, many businesses complain about just rampant employee turnover. People who hire people with disabilities have almost no turnover. So, that’s really the upside. And you get this execution of the job, which is extraordinary, providing you can get a job that works.
BRIAN KENNY: The case does focus on a few of the individuals that work in the store. And they range in terms of their disabilities. It ranges from people who are highly verbal and communicative and are doing customer-facing roles to people who are much less verbal, maybe non-verbal. But they’re doing really important work just within the confines of the organization, right? So, they have found a way to do exactly what you’re describing, which is to find a good fit for each individual. It’s incredibly time consuming, I would imagine. And I’m wondering how Katie and Taylor, you know, manage their time in the process of trying to take, basically take care of all these employees in the store.
RICK RUBACK: I think, Brian, it’s like everything else. You get better at it. We talked about the companion case, and one of the protagonists of the companion case is a distribution center for Walgreens that employs… What was it, Joe? It’s…
JOE HIGGINS: Fulfillment center that they…
RICK RUBACK: Yeah, how many, what percentage of their workforce has self-identified with disabilities?
JOE HIGGINS: Over 20%.
RICK RUBACK: Yeah, it’s just, and it just hums. It’s just not a problem.
JOE HIGGINS: And turnover is very low, as Rick noted early.
RICK RUBACK: And turn over, and kind of employment issues. So, they talked about in these kind of fulfillment centers where you have lots of employees, there’s often all kinds of issues, drug use, violence, absenteeism, people not showing up on time, people not being respectful. None of that happens. It’s just, those problems just disappear. And in the Walgreens example, what I found fascinating was they talked about…You know, we were filming, this is one of my favorite stories. It’s not on the video of this case, but it’s fascinating, is we’re walking with the manager of the fulfillment center and somebody in the film crew says, hey, could you stop that driver, you know, one of these moving boxes from here to there, could you stop him so we could just talk to him? He said, well, you can’t talk to him. You know, and we said, why? And he said, well, he’s deaf. And it’s like, well, how does he drive a forklift in the middle of all these people if he can’t hear? And it’s like, well, why is that a problem? I mean, we just have lights.
RICK RUBACK: So, it’s just clever designing of the job sometimes and The Lucky Ones does that too. They find jobs that make sense. And one of the things we got to do in this project was we interviewed some of the parents of the employees. And what they talked about over and over again was that the employees did things that they never thought they could do. One parent reports, that they come in and he’s making a sandwich. And she says, well, how can he make a hot sandwich? We don’t let him use the stove because we’re afraid he’ll leave the stove on. Well, guess what? He’s making hot sandwiches, and he does it really well.
BRIAN KENNY: Yeah, I mean, I think the notion of the pride comes through loud and clear in the case. Joe, I wonder if you could talk a little bit about, you know, how some of the employees describe their experience working at Lucky Ones.
JOE HIGGINS: It’s as Rick said earlier, a job is such a sense of purpose to all of us. We forget that, right? You’re in the daily grind of, got to go to work. But, you know, work provides meaning and fulfillment to all of us. And particularly for, you know, folks within this community, it means the world. Sometimes it’s their sense of socialization; their sense of self and their sense of doing something of value within the community. It’s such a high, you know, to watch. And hence why, like Rick noted earlier, why we did multimedia. You just see it. You just see the joy, the natural joy, of this community because they’re fulfilled.
BRIAN KENNY: I also liked the way the case described how customers have become advocates for the employees within the store to the extent where you describe a situation where somebody comes in and he’s a little impatient, he doesn’t quite get what’s going on around him and he’s just, you know, he’s waiting for his coffee and being a little bit impatient about it. And the other customers say to him, hey, back off.
JOE HIGGINS: Yeah, yeah.
RICK RUBACK: Yeah, that’s really great. It’s a community, the entire community is invested in the success of the Lucky Ones. It’s a wonderful thing to see.
JOE HIGGINS: You see this humanity in people who come in and they get what the Lucky Ones is about. They get the person behind the counter may have an intellectual disability and you just see humanity at its best. They may not get their coffee in 32 seconds, but they still get a great product with a smile and it’s life done nicely.
BRIAN KENNY: Rick, let’s talk about the business model for a minute. Ultimately, this always comes back to the business for us on Cold Call. But they chose to take a nonprofit approach to this. Why was that important to them?
RICK RUBACK: Well, they wanted to be able to raise some funds to help support growth and support the operation. In addition, I think they would have had a hard time getting external financing, like debt funding for growth. And so, they set up this foundation that is kind of a side-by-side structure so that people can give money to The Lucky Ones and at the same time they can run the business like a business. It’s a nice structure.
BRIAN KENNY: Right, right. Which makes me wonder, is this replicable? And I asked that on a couple of dimensions. One is, you know, with Katie and Taylor, you’ve got people who are really passionate about what they’re doing, but there’s only two of them. And now they’re running two operations, and how scalable are they? And then for the community to buy in, you need the right mentality in the area that you’re opening up and the right people coming into the shop. So, Joe, let me ask you that. Do you think this is a model that can be scaled?
JOE HIGGINS: It’s a great question, Brian. Because Park City is a unique formula, socioeconomically, inclusive culture. It’s the right place for a Lucky Ones to launch, get off the ground. But I’ve thought about this, and I have talked about it and I view the Park City store as a domino of what could come because I think society is there. There is this tremendous need you know, as we identified at the beginning of our conversation, there are waitlists upon waitlists for people within this community who want to do well, who want to be employed. And so, yes, the long answer is, I think, with the right Katie and Taylor’s involved, those visionaries who work hard and make it happen with those kinds of founders, if you will, are committed with the right community involvement. I think those together can make this a successful model.
BRIAN KENNY: Rick, you have looked at so many businesses of this kind in the work that you do. And I’m wondering what you would advise Katie and Taylor to do with regard to succession. I mean, they’ve got to be thinking about how do they bring people in and train them up in a way that allows them to sort of take the reins at other franchises or however you want to look at it.
RICK RUBACK: Yeah, I think that their goal is very much not to make money. As Royce likes to say, it’s not that they might be a not-for-profit, but they’re also a not-for-losses business. So they’re happy to break even, I think, as long as they’re able to increase employment. And so I think about their success in two ways. One, are they being an effective gateway? That is to say, are they providing employment beyond the Lucky Ones for the people they’re focused on? And there’s some evidence that that’s happening in Park City and in the surrounding communities. And then secondly, what’s really important is to show that you can build structures where people with disabilities can thrive in an employment setting. And once you do that, other people are going to look towards that. And you hear all these stories about people who found great matches with people who are intellectually disabled and they found a satisfied employee who’s thrilled to work in a place that they had enormous turnover before, be it a delivery person, be it a welcomer. You know, there was one story told to us about a young man who had always been fascinated with two things in life, cleaning and school buses. And somehow found a job cleaning school buses.
BRIAN KENNY: There you go.
RICK RUBACK: And he would show up after the school buses got done for the day and would stay busy as long as it took shining up those school buses. When his supervisor was asked about it, they said, I’ve never had the school buses so clean or an employee who was so easy to supervise. And wow, what a gift, right? It’s just great for everybody. And I think the challenge is finding those situations.
BRIAN KENNY: And is it fair to say, that part of what Lucky Ones is doing is showing these individuals how much they’re capable of and giving them the confidence that they need to maybe move on to the next thing? Is that fair to say?
RICK RUBACK: Yeah, and their parents.
JOE HIGGINS: Absolutely, absolutely. It’s a bridge, Brian. You know, and Katie Taylor know that. And they work hard at building awareness in their greater community of we have job trained these unique individuals who can do so much more and they’re providing employment within the circle of greater Park City.
BRIAN KENNY: Yeah. This has been a great conversation as I knew it would be. I’ve got one question left for each of you. Rick, I’m going to give you the last word as the professor on the podcast. You get the last word.
JOE HIGGINS: Figures.
BRIAN KENNY: He wouldn’t have it any other way.
JOE HIGGINS: No.
BRIAN KENNY: Joe, let me start with you and ask you if there’s one piece of advice that you could share for others who are interested in combining business with this kind of a purpose-driven mission, what would it be?
JOE HIGGINS: Brian, I look back, you know, I graduated HBS in 1995 and certainly was trained to do well and do well by others. But the main motive was to optimize a business for financial success and thereby you do well as well. And that’s wonderful. There’s nothing wrong with that at all. But, you know, I think where we have progressed as a society is to make a total impact. And not only financially, but from a societal aspect as well. And as I said earlier, you know, I have a sister with Down syndrome. I ran my own business for 20 plus years and never ever thought of hiring from this community. It just wasn’t in my brainscape at all. Really until I did this case with Rick and I look back and say, I think we ran a wonderful business, but if you really want to make an impact, make the effort to do something like this. You not only build a better business because think of it, if you hire someone with a developmental or cognitive disability, the humanity you create in your work culture is astounding. You just build a better business overall and I believe a better financial model as well. So, while this may seem hard, do it. I urge people to really find a way to do it. You will build a better business and create a better world in doing it.
BRIAN KENNY: That’s awesome. So, Rick, let me turn to you for the last word on this. If there’s one thing you want our listeners to remember about The Lucky Ones case, what would it be?
RICK RUBACK: I think it shows what’s possible. I think it shows that if you are creative and thoughtful, you can make your business better and you can make the world better by reaching out to a different community for employees than you have before.
BRIAN KENNY: That’s great. Rick, Joe, thanks for joining me on Cold Call.
RICK RUBACK: Hey, thank you, Brian. Thank you for having us.
JOE HIGGINS: Thank you, Brian.
BRIAN KENNY: If you enjoy Cold Call, you might like our other podcasts: After Hours, Climate Rising, Deep Purpose, IdeaCast, Managing the Future of Work, Skydeck, Think Big, Buy Small, and Women at Work. Find them on Apple, Spotify, or wherever you listen. And if you could take a minute to rate and review us, we’d be grateful. If you have any suggestions or just want to say hello, we want to hear from you, email us at coldcall@hbs.edu. Thanks again for joining us, I’m your host Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School and part of the HBR Podcast Network.
