The Cap Times interviewed Epic Systems CEO Judy Faulkner for our cover story “Her Way” this week. Reporters Katelyn Ferral and Erik Lorenzsonn sat down with Faulkner for 30 minutes at Epic’s campus on March 29 to ask her about her interest in healthcare and her early management decisions at the company. She also spoke to Epic’s impact on the local community, her personal mentors and philosophy when it comes to hiring, considering the lack of women in the STEM fields.
The interview has been edited for grammatical clarity.
Erik Lorenzsonn: How did you become passionate or interested about healthcare in the first place?
Judy Faulkner: Sometimes I think it’s a river you’re floating down, life just takes you different places. When I was in graduate school I took maybe what was the first ever “computers in medicine” course offered in the world and because computer science hadn’t been a discipline up until recently when I went to graduate school and when I took that class one of the professors there, Warner Slack, asked me if I would work with his team. And I said yes and so that’s how I got into computers and medicine. And my father’s a pharmacist so that made sense as well. My husband wasn’t a physician until later so that was not the impetus there.
So then I just kept working on projects more and more and more and stayed in health care. Certainly health care is fascinating. I mean, I think the intersection of healthcare and IT: healthcare, one of the most important things we do and IT, mentally stimulating, creative, fascinating.
Lorenzsonn: You’re passionate about doing good, particularly through health care, the idea of helping patients. When did that idea click for you as an important thing?
Faulkner: Let me back up a minute on this one. I think you don’t necessarily think about it, you’re just doing it. Let’s say you help kids. You might not think ‘Oh when did I think about helping kids?’ You just help kids. But I took a class once where they asked an interesting question and that is: Why do you go to work?
And they gave five answers, I have changed it to six, and the six are: 1: for the paycheck, 2: for something interesting to do, 3: for your coworkers, so that you have others that you like to be with and work with, 4: for your customer to meet the commitments to your customer, 5: for the competition, if you think that’s challenging and fun, 6: for the mission. And then they asked us to put a percent by each one. We were all in different industries, we weren’t all in health care, or IT, they asked us to put a percent by each one.
It’s interesting, if you were to do each thing and they said circle the one with the largest percent and if there are ties, pick one. And what do you think I put down?
Katelyn Ferral: Customer?
Faulkner: Yes. And my feeling is if we take good care of our customers, they take good care of the patients and our job is to help the customers take good care of the patients. So it’s indirect. Yes, of course we want to help patients but the best way we can help them is to help the customers.
Ferral: Can you articulate what, specifically; it is about health care that has clicked for you? That you recall was really fascinating initially when you realized that marriage of IT and healthcare?
Faulkner: Well it was big; there was so much to it. So in the very beginning, I would work side by side with the clinicians, helping them describe what they wanted the system to do and what they wanted to keep track of.
(When) I worked with rehab medicine for example; I went back and told my kids, because what you learn in rehab med was awful. If you’re a paraplegic and quadriplegic, it's things like questions in the system, I helped them put in. "How much can you move your little finger?" "How much can you move your fourth finger, etc?" Unbelievably awful. Things that maybe you never thought of, like "How do you go to the bathroom?" Things that you wouldn’t have thought of if you didn’t look at this database and realize these are the things that people have to deal with every day. I would go home and tell my kids, "You will never dive into a pond when you don’t know where the bottom is or what’s in it," or "You will never ride in a motorcycle," because that’s how you will get injured.
Then you switch from that to tumor registries, cancer registries, it’s totally different. Then you switch to cardiology. I think a lot of it was the enormity of the problems people face and all the things, the details you have to know to help keep them healthier, so that was fascinating to do. And then the other thing you realize, and this is why I think I have the customer there, is the deep passion that the clinicians have for caring for their patients. That is infectious and you want nothing more than to make sure that you meet the needs of each of those clinicians so they can care best for their patients because they’re depending on us to make sure that they do that well.
Lorenzsonn: Your background in training is in computer science, where did you learn to be a business woman?
Faulkner: Well, my background is math undergraduate and then computer science graduate and they are two different things.
To me, math is patterns and relationships, it’s sets and subsets. I think I’m very much a mathematician as well as a computer scientist. And then graduate school was computer science. And math is truth and computer science is what works, and it’s great to put them together because you need both. We like to hire people with both backgrounds. The mathematicians typically are focused on "Why did this happen? What’s root cause?" The computer scientists are often focused on "How do we fix it? What do we do?" And putting the two together is really good.
So your question was…?
Lorenzsonn: Where did you learn to be a businessperson?
Faulkner: Oh, OK. So given that background, I think the math side is very important in creating a structure that did have relationships, patterns, sets and subsets. How do you create a relationship that’s well organized that you can replicate that and you can build upon? So I think that was very important. The second thing was I did not have an MBA and I think that was beneficial.
And the reason it was beneficial is the MBA teaches you certain ways to think, and instead I had to think from scratch and figure out what is the best thing to do. Many things we decided to do were not what they would have taught us in MBA class. So, for example, not to go out for first round funding and second round funding. If we had done that, Epic wouldn’t exist because they need a certain amount of money back after a certain period of time and they would have said we were going too slow and they would have killed us off.
Lorenzsonn: Who would you say were you biggest mentors when you were starting off, starting this company?
Faulkner: I think probably the biggest mentors were Warner Slack, John Greist. John Greist probably had the most influence, a very helpful and thoughtful person with lots of ideas. My mother probably would have been.
Ferral: Your mom?
Faulkner: You can see out there, see all those peace signs out there? Following it you can see you see a Nobel Peace Prize. She belonged to Physicians for Social Responsibility and was one of the directors of the Northwest when they won the Nobel Peace Prize and that was given to an organization, not to an individual and they called their directors in and made replicas of it and put their individual names on it, so that was pretty neat. I would say she had a huge impact.
Ferral: So she was a physician?
Faulkner: No, she actually never went to college, she graduated high school with straight A’s at age 15. She did not go to college, and only later did she realize she could have gotten in for free because she was such a good student and I think that really made her sad. It was a huge regret in life she didn’t do that. Instead she went into the workforce at age 15.
Ferral: What did she do for work?
Faulkner: She was a secretary at a school and I think that probably really helped her learn more and more and then she worked with my father in his drug store and then she started running peace centers.
Lorenzsonn: What kinds of things do you think those mentors taught you that helped you back when you first started the company?
Faulkner: I think that they were really good at being people to talk with and have ideas with.
Ferral: One thing that strikes me as I’ve read about your company and talked with people…
Faulkner: Don’t believe half of what you read.
Ferral: Yeah. heh . . .
Ferral: Well, you seem to place a real premium of wanting to chart your own path outside of the conventional MBA, and a premium on people thinking critically, outside the box and solving problems and coming up with solutions that may at times defy what we at times may have understood the “right” path to be. Just being a very robust and proactive thinker.
Faulkner: That’s very well-worded.
Ferral: So I’m wondering what led you to value that principle and see that it’s important for you and how you’re laying out your company and how you want your employees to think?
Faulkner: You mean the principle of creative thinking?
Ferral: Yes, and at times charting your own course and maybe defying what convention may tell us is the right path.
Faulkner: I don’t know that I actually thought, "Oh, we’re going to defy convention." I don’t think it was that way at all. I think it was "Oh, we have some decisions to make, what should we make?" So here is an example:
We rented offices in the basement of an apartment house, on 2020 Old University Avenue. When it was time to move to our next building when that one was outgrown, and by the way, one of the early decisions I think was just "Make it pretty, make it attractive" and it didn’t have to be expensive. So we just got a lot of paint and painted things different shades of purples and people would walk in and say "Are you a marketing firm?" And we got these big metal desks that were hideous and we painted them purple and I thought it looked pretty cool.
So that was just the way we started but then when we moved to our next building, we had a choice, and that choice was what I often say "glass-and-brass," very high-tech looking or an old Victorian building that looked like a home.
Now, the typical choice would have been the high tech, but I thought, "Oh, OK, how do I develop the best software?" Well, I wake up in the morning and I have my head full of thoughts of what I want to do to program on the computer. Then I would run down to the basement and I’d work and work and work and suddenly realize it’s 11 o’ clock in the morning and I’m still in my pajamas and I’m starving and I still have to shower and get dressed and eat something. And I would say most programmers will have had similar experiences.
So then when you think about, "How do I create that environment?" the "glass-and-brass," the open environments with desks next to each other isn’t that. The house that feels like home, that has individual offices, is going to be much more that way. So then it was like have a house environment so it feels like home, let everybody have individual offices and have food around. That became some of what we did.
So it’s not that I thought "Is that conventional or not?" It’s just that I thought in my brain, "How do you create an environment where you’re going to be most productive?" So that’s just an example of that kind of thinking. So we were no smoking well before many of the other companies were no smoking. Once again it was just, "Boy, lots of people would be bothered if there’s smoke drifting by, so let’s not do that."
It was casual dress before casual dress was common. I remember the first thing used to be Casual Fridays and now it becomes pretty much "Wear what you want." We said, ‘Well, if you’re a programmer, you got to be comfortable, so wear whatever you can work best in."
So most of it came from "How do you do a good job?" It didn’t come from "Oh, I want to consciously go against what other people are saying." And for not taking venture capital in the very beginning. It was "Why do we want people whose primary interest in us is return on equity rather than 'Are you building a good product? Is it helping the people? Do you have an environment that is good for employees?'" And it seemed like a contradiction.
So basically, it’s just logic. Does that make sense to you?
Faulkner: So I wonder why sometimes more people don’t do that.
Ferral: I think too there’s an element that you’re trusting your own logic.
Ferral: That’s a challenge at times for folks, I think. Obviously, you’re very deliberate and purposeful in how you’re thinking about things, but you’re making a decision where you’re like "This makes sense. This is how I can achieve what I’ve set out to do and I’m trusting my own logic, even though it’s maybe a little different than what I’m seeing everyone else do." I think that’s distinct.
Faulkner: Good point. That is really good point because I’ve had employees say, "How do you know to do that?" And the question they were asking is basically "How do you trust your logic?"
And I always think of it as the yellow brick road. I can see the yellow brick road. I know how to step down it, and I don’t want to go off of it. I can see it. And I think for the others maybe they can see it, but they question it. They say, "Is it really the yellow brick road?" But they probably know it is.
Ferral: Was it always like that for you? When you were younger?
Faulkner: Pretty much.
Ferral: Sometimes I think people say that type of trust and confidence comes with age and experience.
Faulkner: Yes, I think I was pretty much always like that. In these kinds of situations. Give me a social situation and no…
Ferral: Yeah, there’s many roads.
Lorenzsonn: I feel like it is more fashionable to be a kind of company that goes against the grain and defies convention and start a company what with Silicon Valley culture. Do you find that?
Faulkner: I think back then everybody wore a certain kind of suit, wore high heels.
It didn’t take me long to think high heels, stockings, stockings are probably like ties, they constrict your thinking so a lot of it was just "I can’t work this way," rather than much thinking about defying traditions. First of all, I was really glad Bill Gates came on the scene because he made being in our type of environment, he made being nerdy, a good thing not a bad thing. When I was growing up, I was definitely nerdy.
By the way, I just read in “Ripley’s Believe It or Not” that the word ‘nerd’ was actually first used by Dr. Suess in one of his books and that’s how it came about.
Anyway, I think it was painful to be nerdy when I was growing up and I clearly was nerdy. But I think it became a perfectly fine thing to be nerdy after Bill Gates. So that it isn’t as much defying anything, it’s who are you, really? And can you be who you are?
Lorenzsonn: Can you comment on the impact you have had on Dane County at all?
Faulkner: Well I think the first thing I think of when you say that is I think we’ve helped the restaurants get better. Because we have good food here and our staff wants good food when they want out and so at first it was very hard. At first when we hired very good chefs we found we had to title the food differently. We couldn’t say "shrimp dijon” we had to simply say "sautéed shrimp." They’d say "I don’t know what that is, where are the pizza and hamburgers?"
So we had to rewrite the menus to make it acceptable. It was quite funny. And then after a while we could change it to what the traditional name was for the dish.
So certainly seeing the food, I’ve been told about the apartments. But I think one of the things we had a big influence on is certainly the airport because we do so much flying.
Lorenzsonn: Do you feel a sense of pride? I ask this because I feel other people do when they talk about the impact that Epic has had and how it’s an engine of growth and change.
Ferral: In a positive way…
Faulkner: Well, if they do I’m delighted because I hope it would be positive. I don’t think about it as pride. I just think about it as …well, you know we’re here in Verona and it seems a little isolated and I think of it as you drive to work, you work all day and late at night you go home.
Ferral: Do you reflect on it at all when you are out on State Street, and you’re in a restaurant? You’ve seen that area change from when you were a graduate student to what it is now. Do you reflect on that and think "Wow, I had a hand in this?"
Faulkner: No, I don’t.
Ferral: Is there anything about the narrative about how Epic has changed the county that you take exception to or feel is misplaced?
Faulkner: I don’t think I am as aware of the narrative as you may be.
And one thing is often when I see things written up about Epic, I don’t read them. So other people may be more aware of the narrative than I am because I’m not reading the narrative. Maybe because it feels a little too weird, I don’t know. It’s a very interesting thing, why don’t I read things that were written about me or about our company? But it just feels weird so I don’t.
Ferral: You’re very busy, I know. Is it just because you’re focused on the task at hand?
Faulkner: It’s probably a little bit. A little bit of time and a little bit of maybe concern. When I read about it, if it’s very positive that’s nice, if it’s very negative, that’s worrisome. I don’t know. I don’t know why I don’t read.
One thing I’ve learned, often when I read things, there’s a high percentage that’s wrong and one thing that I’ve learned when I read things about others is not to believe everything I read. I’ll tell that to others who’ve read something and they’ll say, "Look at this, this person was so bad or good" or whatever. I’ll often say "Maybe, but unless you know more, then you can’t really accept that."
Ferral: I’m interested in what you said about Bill Gates changing the paradigm of nerdiness…
Ferral: And that being a contrast in a way to you being a nerd and growing up. There is talk today about girls not being encouraged enough in STEM fields, are you bothered by that? The lack of women in STEM fields? How do you feel about that?
Faulkner: I’ll just comment on my daughters. I have a son and two daughters. I went into computer science and math and my daughters were so good at it, you could just tell, even when they were little how their thinking would go that they’d be great at it. And they absolutely refused to take any classes in computer science and learn to program. And the reason is they said it was too nerdy and they didn’t want to be nerdy and I felt really bad about that. I thought "Wow, it’s such a good field." It’s such a shame they didn’t at least explore it because it would have been fun.
Lorenzsonn: Has it ever been a challenge with Epic as far as its recruiting, perhaps?
Faulkner: I think we want to choose the best people available for the job. We are gender neutral, we are religion neutral, we are ethnicity neutral, we don’t care.
Lorenzsonn: One thing I want to ask about is this idea of fun, it’s in that little motto "Do good, have fun, work hard, make money." Where does that importance on the notion of fun come from?
Faulkner: It is not fun in that it in that it’s a party, it’s that you have to enjoy what you’re doing. It’s a big part of your life and it’s important to enjoy it. And I think a lot of it is psychological, that you can be a person who doesn’t enjoy life or a person who does enjoy life and therefore I think trying to look at it and say "Let’s have fun with this."
So for example, in a sales situation if I’m meeting new customers, I don’t think of it as prospective new customers, I often don’t think of it as "Oh, this is stressful." I think of it as whether they choose us or whether they don’t choose us, I’m going to have fun meeting them. I want to learn who they are. I want to learn what they do and it’s such a freeing thing, to be able to say, logically, you can be worried about it or you can have fun with it.
So I like to think of it as have fun. And our conferences, when we go to our big conferences, it’s always our final remark to our staff: "Go out, wander around, see what other people are doing, have fun." And I have heard others say you’ve got to sell. We don't say that. We say, "This is a great opportunity to learn a lot and to have a lot of fun."
Ferral: And you said that idea is freeing, in a sense?
Faulkner: I think so. I think that and I think the other thing that's freeing is we're very careful to teach our people about honesty. And I think that's freeing, too. At least I have been told that. Everybody knows that you shouldn't lie, but I think that to not omit something important, to never mislead, to not allow someone to make a conclusion that is false without correcting it.
Those are the things that we teach our people to do. And I think that really also frees them because they know they are supposed to be always truthful. And although it seems so basic, it isn't as basic as it seems.
Ferral: We know you have to leave, but if you have anything else to say or want to talk in the future. I care a lot about being accurate and fair. I really believe in the power of a story, that’s why I do the work that I do.
Faulkner: You know, that is so important. I absolutely believe in the power of the story. And so many people don't understand that, especially in the tech field. In the high-tech field, people just think, "Oh, who cares about the story, it's just A, B, C, D, you got to do it in this order."
No, you have to tell the story. The "why" behind it. And it's really a challenge sometimes with tech folks to teach them the importance of the story. But then on the flip side, the story itself isn't enough. You’ve also got to have the A, B, C, D. So the marriage of the two is really good.