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Friday, May 2, 2014

Epic's Principles, Part 3

See the previous posts here:
Part 1
Part 2

Epic's next principle is 5: Be frugal.

Good advice, but I don't think Epic actually follows it.

Dictionary.com defines frugal as:
economical in use or expenditure; prudently saving or sparing; not wasteful

Epic is not that. Epic wastes money (not in large sums, at least not that I've been privy to) on lots of little things that add up. Epic wastes its employees' time, and it wastes its employees in general. 

I remember when I was working there, every office received its own Dymo label maker. Previously, you could only find a label maker in the supply rooms. I'm not sure what the demand was that necessitated a label maker for every 1.5 employees--I don't think I ever had to wait to use it, even when there was only one per floor. The label makers in question have a current list price of $29.99 (available on Amazon). I doubt Judy paid full retail price for them, as I'm certain Epic has enough sense to get bulk discounts where available. Even so, my back-of-the-napkin calculation has the price of enough label makers for every office at Epic being close to one employee's yearly salary.

I would rather Epic had spent that money on hiring an additional TS, in keeping with Principle 3: Expectations = Reality. I expect my TS will be fully committed to my customer and no one else, and that is not reflected in reality.

Epic is not frugal with its employees' time. It takes 6-9 months for a new TS to become self-sufficient. Epic's customers are paying that TS for the time spent on the steep learning curve (which doesn't make the customers happy--no one likes paying master prices for apprentice work), which will then go to waste as the average employee will leave Epic (one way or another) after another 12 or 18 months. Epic is throwing a quarter of its salary expenditures down the drain--they're not reaping any rewards from retaining skilled workers--they train the employees and then fire them (or burn through them) just as they get the knowledge sufficient to do their job effectively. At that point, Epic adds multiple customers to a single employee's roster, which turns a functional, bright, excited little worker bee into a stressed, overworked, non-functional drone. Epic wastes (definitions 4 or 5) its employees.

And some of the uses that Epic puts its employees to just don't make good business sense. The "starting salary" of a TS, when put in hourly form, was about $28 when I started at Epic. Some employee duties included making popcorn for the Staff Meetings, and directing traffic at UGM. I don't know of any popcorn makers who earn $28 an hour, and that's not counting the lost productivity cost in taking that employee away from customer-facing work. The frugal thing to do would be to leave that employee in his office so he can work on billable tasks. Pay a local store to make all the popcorn--the increased productivity from Epic's employees will pay dividends, even if outsourcing the popcorn costs a little bit more per box. The same goes for all the UGM work, which is addressed in greater detail here.

Epic is frugal with employee salaries, so that's something. Compared to other software companies of similar size, and even the salaries of analysts at Epic's customer sites, the Epic employee is receiving less pay than people doing similar (sometimes identical) work at other organizations. Epic is very generous with its raises though, and those who are permitted to stick around make money hand over fist. But the average employee isn't going to last long enough to get that kind of salary. The low starting salary coupled with the huge raises for long-timers leads to a good-looking average salary, but chances are you're not going to hit that average during the typical short tenure of an Epic employee's employment. 

Further breaking the illusion of frugality, there's Epic's artwork, which can best be described by borrowing from Hooters: tacky and unrefined. Judy is on record saying that the art work is a miniscule amount of the yearly budget. But as perceptions also equal reality, it gives the appearance of wasting a lot of money. Customers do not feel as though installing a tube slide or putting a paper-mache giraffe in a forest of fake bamboo is a good use of the copious amounts of money they've paid into Epic's coffers.

There's also the campus, which grows like a tumor. All that construction isn't cheap, and I understand that Judy had to modify the 10th principle because of it. "Don't take on debt, period" is a completely different from "Don't take on debt except in these specific circumstances."

The key to frugality is the wise use of resources. I'm not sure what the return on investment was for those label printers, or if there was one to begin with. If Epic spent more on outsourcing those tasks that don't require extensive, specialized software knowledge (like making popcorn and directing traffic), and less on cool gadgets (like popcorn machines), the appearance of frugality would show more. As it stands now though, there is nothing frugal about Epic.


  1. I definitely agree -- I feel like "be frugal" is targeted towards the employees when they are traveling on customers' money. There are so many ways Epic could be frugal with its own revenue, and yet employees are always "told" (yelled at) that we should be more frugal at every single staff meeting.

    While I do understand why being frugal as an employee and not wasting the customers' money is important, when we are on site on a 12 hour shift schedule, I want to stay and rest at a nice hotel, and treat myself to a nice meal after long hours.


  2. Your point about the art seeming to be waste of money to customers is amusing given that Judy has gone on record as saying she did not want an employee workout facility/fitness center because she felt it would give customers the impression that she was wasting their money (you know, because employee health is a waste of money).

    1. The excuse I heard about that was the same one she gave for an on-site daycare center for employees' children: It'll take business away from local establishments in Verona. I guess we don't talk about the effect the cafeteria has on local restaurants...

      Judy just seems more and more capricious as time goes by.

    2. Quick point: Cafeteria on site improves productivity by a lot while reducing the traffic burden on the poor road infrastructure around the campus.

      I think most of the decisions made at Epic reflect two methodologies:
      1) Squeeze as much as possible out as few of people as possible.
      2) Improve customer relationships at any expense.

      Incidentally, stopping the effort on #1 might lead to better results from #2.

    3. But it's still a double-standard. If supporting local business is a goal in one area, shouldn't it be a goal elsewhere, too? When I was there, it seemed that for every employee with a family, there were at least 5 other employees who were single. Local businesses would benefit a lot more from that percentage of folks spending money in Verona rather than a more minute percentage spending money closer to home in Oregon, Madison, Middleton, and Mt Horeb.

      Local businesses do NOT like Epic, and it's for that reason. Hotels do alright, and gas stations in Fitchburg and Verona do ok, but I'm sure convenience stores suffer thanks to the 'trading post'; and the local coffee shops would make a lot more money (Is the Sow's Ear still in business?) if Epic didn't have all the coffee carts and cafes. It's a double-standard, and double-standards create very difficult work environments.

      FWIW, If Epic employees were spending more money in town, then the local governments would have more tax revenues to spend on road improvements.

    4. I agree completely. However, I think the double standard is more of a heirarchy of decision making, in this order:

      1) Does it improve customer relationships or situations?
      2) Does Epic get more out of what it has?
      3) Does it make Epic look good?

      #1 Is clearly the driving force of Judy.

      #2 comes into play with the triple wrapped non compete agreements.
      - It comes into play with the "not mandatory, but quite mandatory" overtime.
      - It shows when Judy gets on stage and says "Hey, the free food we provide at 7PM does not mean you get to eat for free, then leave at 7PM. You need to stay at least another hour."
      - You mention employees with families... depending on your team lead, many employees with families are pushed out as soon as they re-prioritize their life to focus more on kids. As soon as you stop spending the 60-80 hours a week on the job, you get harassed, threatened, and then pushed out. This is more prevalent with newer teams or new TLs without families themselves... but I've seen it happen everywhere.

      #3 comes into play quite a bit despite being third on the list.
      - We see it in the nature of how Epic settles lawsuits instead of lets them go to court.
      - We see it in how much money Epic spends on its campus instead of retaining its most qualified employees.

      Verona government loves Epic because of the taxes that they pay to the city. I agree that many of the businesses do not benefit from the increased traffic with the same income, but still many employees do go into town for food.

      Whats more, this focus on squeezing employees, combined with a mostly inept middle management force (think product leads on development teams) is a slow growing deadly cancer to Epic.
      - I've seen cases where inept management has led directly to destroying an entire development team. Radiant is a good example of this, where it went through many rounds of terrible management, essentially replacing the team twice. Ambulatory is going through this now. Optime is feeling this pain. ASAP is feeling this pain. The sheer turnover, or the dilution of good experienced development staff, coupled with adding super inefficient processes, slow development tools, tons of overhead, etc. is creating a much lower quality product with fewer enhancements, and longer development cycles. The effects of this inept management and added bureaucracy will have consequences over the next 5-10 years where companies like Athena Health will sneak in and get a foot hold in Epic's market.

      This effect is starting to show in KLAS.

  3. I don't work at Epic, but I have a lot of friends that do, or have. Half my ex-Epic friends did ok. Half went thru a lot of hurt because of this capricious company.

    I fear for those who still work there.

    I hope soon, someone stops this evil woman from ruining the lives of young, intelligent people.

    1. To be fair, Judy is not evil, she just doesn't understand how most people feel about working. She works 12-hour days regularly because she genuinely wants to; she doesn't understand that most of her employees don't want to do that, too.

      When she is forced to work over a weekend, she wants a few hours to recoop (typically in the form of sleep), and then she jumps right back in to work; she doesn't understand that when her employees are forced to work over a weekend, they want that leisure time back.

      She doesn't get that, and there's no one in her inner circle who's going to explain it to her.

  4. Just read this. Thought you might find it relevant:


  5. What Judy doesn't get is that expecting her employees to work the same hours she does for far, far less reward doesn't work.
    Another area that the company is frugal in is bonuses. They tell you that bonuses await those who work hard. In reality, everybody in a role gets about the same bonus, and because discussing compensation in Epic is verboten, nobody figures it out for their first few years. I've heard interesting tales from ex-TLs about how they sit in the bonus meetings and anyone who claims one of their employees is a standout gets argued down. It's a reverse Lake Woebegone. Kinda the same thing for the SARS. No matter what they tell you, they are not the same as stock.

  6. Frugality - Epic also saves a lot on not having to match 401k contributions or stock when an employee leaves or is forced out before 5 years is up. Same goes for the 5 year sabbatical (if that still happens anymore)

  7. Frugality is Judy asking the employees to find ways to save nickels. Yeah, let's look at that HR pipeline of sending thousands of people onsite to Madison for interviews and making them stay a night at a hotel, or building ridiculous buildings while spending none of that on keeping people around.

    As long as the turnover is high, and the retention garbage, there will always be a bug that a customer will pay off with a charge order. Too bad functional software isn't on the list of principles, the customer service component is there to cover up the problem.

  8. Late to the party I know, but frugality is a joke when they go through all the expense of hiring and training people like me with years of work experience just to slot us in holding pattern positions until they can determine just how much of a company drone they can make out of us.

    Then again, when you come to the table barely asking for peanuts, which lets them counter even lower, maybe they figure you're worth the gamble.

    Pick up nickels on light switches and drop $100 bills on the human resources you blithely flush away. That's Epic.