Epic’s Unique Operating Philosophy
Have you ever wondered what it’s like to work at a company that’s kind of an enigma in the tech world? We’re talking about Epic Systems, the health-care software giant with a sprawling campus that feels less like a corporate park and more like a whimsical, nerdy wonderland.
Epic, located on 1,670 acres in Verona, Wisconsin, isn’t your typical tech company. Forget going public or being bought out; these are just two of the company’s “10 commandments,” which are posted in bathrooms and break rooms. The third? “Software must work.” And that’s just the beginning of the eccentricities.
Every month, most of Epic’s 14,000 employees gather in an underground auditorium called Deep Space for a mandatory meeting. Some employees jokingly call it “work church.” Executives share company news and goals, and they even lead a grammar lesson—because apparently, knowing when to use “who” or “whom” is essential for building health-care software.
The Visionary at the Helm: Judy Faulkner
At the heart of Epic is its 82-year-old CEO, Judy Faulkner. She started the company in a Wisconsin basement back in 1979 and has been at the helm ever since. Faulkner has built a business with $5.7 billion in annual revenue while maintaining a significant distance from the traditional tech scene. She’s about 2,000 miles away from both Silicon Valley and Seattle and has never taken a dime from venture capitalists.
Dr. Eric Dickson, CEO of UMass Memorial Health, who’s known Faulkner for decades, described her as a “female cross between Bill Gates and Willy Wonka.” While many of her tech-founder peers, like Elon Musk, Jeff Bezos, and Mark Zuckerberg, are famous for their astronomical wealth, Faulkner has a more modest approach. With an estimated net worth of $7.8 billion, she ranks 430th on the Forbes billionaires list, a position she’s perfectly happy with.
Epic’s primary product, an electronic health record (EHR) software, is used by about 42% of U.S. acute care hospitals, putting it well ahead of its rivals, including Oracle Health. The company says its technology is used in 3,300 hospitals, 71,000 clinics, and by 325 million patients worldwide.
Ensuring Epic’s Legacy
Despite its success, Epic isn’t without its critics. Doctors, patients, and administrators have voiced complaints about the software’s user experience and its ability to work with other tools. An Epic spokesperson acknowledged that with half a million clinicians using the software, some will find it easy, and others will find it difficult.
Faulkner’s aversion to going public is at the core of her company’s identity. She once told CNBC that she read shareholder comments and found them “vitriolic” because their only focus was the return on investment. “Sometimes, there’s a lot more than that,” she said. Because Epic has never gone public, Faulkner’s wealth doesn’t grow at the same rate as her peers, but she’s completely fine with that.
Faulkner, who rarely gives interviews, sat down with CNBC at Epic’s headquarters, where office buildings are creatively themed after fictional worlds like “The Wizard of Oz,” “Alice in Wonderland,” and “Harry Potter.” In one building, there’s even a slide that takes you to a room where everything is upside down.
Faulkner has a clear plan for the company’s future after she’s gone. She’s transferring her voting shares into a trust that will be governed by a voting committee made up of her husband, her three children, and five longtime employees. This committee is legally bound to follow a set of rules, including not allowing the company to go public or be acquired. To ensure compliance, she’s even established “The Trust Protector Committee,” a group of three health-care leaders who can sue the voting committee if they don’t follow the rules.
Faulkner’s legacy isn’t just about the company, though. In 2015, she signed The Giving Pledge, committing to donate 99% of her wealth to charity. Inspired by a dinner with Warren Buffett, she created the Roots & Wings family foundation to support nonprofits that help low-income children and families. She’s been selling her non-voting shares back to the company and giving all the proceeds directly to the foundation, saying, “I’ve never cashed a single share for myself.”
A Customer-Centric Approach
Implementing Epic’s software is a massive and expensive undertaking for health systems. As Dr. Robert Grossman, CEO of NYU Langone Health, put it, “We bet the ranch on Epic, let’s be very honest.”
Customers praise Epic’s commitment. Michael Mayo, CEO of Baptist Health, noted that Epic employees are “immersed” in their facilities, and when they went “live” with the software, the Epic team was there in “full force.” Each health system even gets a dedicated contact person, a “BFF,” or “best friend forever,” who is available 24/7 to answer questions and solve problems.
Faulkner herself is known for being incredibly accessible to customers. Mike Slubowski, CEO of Trinity Health, said she always answers his emails within a day, if not an hour. She takes notes during calls and is known to call someone on her team on the spot to get an answer. “I don’t know what so-and-so was doing prior to getting the call,” said Dickson, “but it’s clear that when Judy calls, you drop what you’re doing.”
Epic’s success is also a testament to its unique hiring and work culture. The company recruits the vast majority of its employees straight out of college, and new hires go through extensive training, including a five-hour corporate philosophy class. While the work can be demanding, with some former employees reporting long hours and burnout, the company says its average employee works 44-45 hours a week.
Faulkner’s influence is everywhere, from the meticulously designed campus—where she personally scrutinizes the details of every bathroom—to the company’s anti-advertising stance. Its growth has been fueled by word of mouth and Faulkner’s own effective salesmanship. When Marty Bonick, CEO of Ardent Health, voiced his concerns about the high cost and difficulty of Epic’s product, Faulkner personally delivered a 90-minute presentation to convince him.
Navigating Controversy and Competition
Epic’s dominance comes with a fair share of controversy. The company is facing two lawsuits, one from data startup Particle Health and another from CureIS Healthcare, both alleging anticompetitive practices. Critics have also accused Epic of being overly protective of its data, making it difficult to share patient information between different health-care systems. As Oracle executive Ken Glueck put it, “everyone in the industry understands that Epic’s CEO Judy Faulkner is the single biggest obstacle to EHR interoperability.”
Despite the challenges, Faulkner, who sees her mother’s peaceful protesting as a source of courage, has continued to go her own way, building Epic into the most powerful technology company in U.S. health care. As she put it, sometimes you just have to “have the guts to do what you know is the right thing to do.”
Faulkner, who once described herself as “the accidental CEO,” still leads with a unique vision. When she spoke at a user meeting dressed as a swan, she asked the thousands of health-care executives in the audience, “Why be owned by people whose interest is primarily return of equity?”
She may be a bit of a maverick, but as Sutter Health CEO Warner Thomas said, “Everybody knows Judy Faulkner.” And for now, she’s not ready to quit. “It’s interesting and it’s challenging and it’s worthwhile,” she said.