This three-part series detailing the Sturm und Drang that consumed most of the small businesses of State Street became my major writing project for winter 2020-21. In Business was nice enough to publish it online. You can access the stories here.
https://www.ibmadison.com/state-street-special-report-part-1/
https://www.ibmadison.com/state-street-special-report-part-2/
https://www.ibmadison.com/why-we-like-state-street-why-we-fear-it-at-times/
Ya got me. I haven’t updated my story archive in the longest time. But a Wisconsin State Journal story detailing Epic employee unrest related to equity and diversity got me off my keister.
For the October 2020 issue of Madison Magazine, I examined the staff unrest at the Verona-based Electronic Health Record behemoth and considered what the future might hold for Dane County’s largest private employer. You can read the story here. Here’ what I concluded:
I did not speak to a single health care source who felt Epic’s EHR dominance was in danger now or in the immediate future or even 10 years from now.
Epic’s bond with its clients is just too strong. And even if there are unhappy campers, dumping Epic would mean repudiating a huge investment. The Kaiser Permanente consortium spent a reported $4 billion implementing Epic’s software. The Mayo Clinic got in for $1.5 billion. The Duke University Health System for $700 million. Eight- and nine-figure acquisition fees are common for Epic clients.
How do you walk away from that? Especially when no other EHR vendor offers a major hospital “50 different modules for 50 different departments” as good as Epic’s, as Bluetree’s Schwach told me.
Well, it could happen if you follow John Neis’ worried thinking: Failure is an option.
Neis, who has been doing early-stage health care investing since the mid-1980s, quietly argues that Epic is not invulnerable. He says the core problem remains: EHRs are an imperfect solution. Doctors find them “soul crushing.” This dysfunction haunts health care.
“The cost of leaving Epic for something else is enormous,” Neis acknowledges. But “switching does happen.” And sometimes outright revolutions happen in technology, too. Seared in Neis’ memory is a long-ago conversation in Rochester, New York, with a clueless Kodak executive who confidently told him that digital photography would never replace film.
Neis argues that a tech company with unlimited resources could blow up the existing EHR model and build a far better one. He feels “the Three As” — Amazon, Apple and Alphabet’s Google, all well practiced in disrupting entrenched industries — are the most likely Epic challengers.
Could they afford to spend a billion or two devising a “leapfrog” EHR that both pleases doctors and improves their diagnostic skills with data-crunched insights? We both laugh at the absurdity of the question; $2 billion is coffee money for the tech giants.
“The challengers would need to spend serious money,” he says. “It can’t be just for some incremental improvement. It has to be a huge leap forward in both data analysis to help guide the physician to the right decisions and secondly to greatly improve the software’s interface with the physician.”
At this point, Neis offers — practically in a stage whisper over the phone — an unexpected fourth candidate for disrupting the existing EHR hegemony: the Epic team itself. No one is better situated to lead the transformation, he says. They know the customer better than anybody. They understand what the problems are. They get how complex the solution needs to be. And because Epic is private, it doesn’t have to worry about Wall Street freaking out over a bad quarter or two.
Neis’ advice: “Epic should figure out the transformation before someone else does.”
Will the post-Faulkner Epic be agile enough to reimagine its business?
That’s the cosmic question. Northwestern’s Jennifer Pendergast, who directs the John L. Ward Center for Family Enterprises at Kellogg School of Management, knows little about Epic’s operation but is very familiar with strong-willed founders like Faulkner.
“Are they kidding themselves to think they can control the future from the grave? Yes. Often to great detriment,” she says. “The goal is to be flexible, resilient, to be able to pivot given the current environment. What you want is an organization that has the capacity to think and adjust on its own.”
As for an organization that is tightly fit to its market, Pendergast says it “will be really successful until the business environment changes. And then you’ve got a problem.”
Sometimes you can’t shovel everything into a story.
I found myself in that position when I profiled investigative farm journalist Pete Hardin for Isthmus. He’s an invaluable chronicler of the crisis in dairy farming. I just didn’t have the room to discuss his reporting on the cost overruns and construction delays in UW-Madison’s much-needed expansion of its Center for Dairy Research.
But as luck had it, I wrote what amounts to Part II of the Hardin story for the newly launched Wisconsin Examiner, an online news bureau focused on covering state politics and government. Friends and former colleagues are running it.
I wrote a commentary on how Wisconsin politicians (as well as UW-Madison) have failed dairy farmers.
Imagine if Gov. Evers, Speaker Robin Vos and state Senate Majority Leader Scott Fitzgerald had gathered at the onset of the January legislative session to say that Job One would be working out a rescue plan for Wisconsin dairy farmers before turning to the new state budget.
Not everything has to be draped in extreme partisanship. Our leaders could have rallied around family farmers. Right?
Chances are the pols would have found a common ground. Goodwill would have followed. The budget deliberations would have been less smash-face. Can’t you imagine a rousing chorus of “Kumbaya” breaking out as Evers signed the budget bill surrounded by the beaming Vos and Fitzgerald?
Okay, I am a fool.
These people have warring agendas and a preference for disingenuous arguments. That’s what they do. A few years ago, Republicans gave manufacturers a huge and costly income tax cut under the cover it would also help farmers. Democrats, meanwhile, are intensely committed to issues that appeal to Milwaukee County and Dane County activists. Yes, expanding Medicaid will help struggling Wisconsin farm families, but citing it as a cornerstone to the Democrats’ farm policy is such a clumsy sleight of hand.
Wisconsin farmers need more than lip service from the pols. They need smart policies broadly supported. Otherwise we ought to change the tagline on our license plates. “America’s Dairyland”? Not anymore.
To read more, please go here.
In this cover story for Isthmus, I did deeper into why UW-Madison, ranked sixth in the nation for research, scores poorly for business research (50th place) and in particular for hosting medical-related clinical trials (51st place). The story begins:
By now it’s well documented that UW-Madison lags behind most of its peers in turning its esteemed research into marketable goods. The question is what would it take for the university to get on track and become a pacesetter in the lucrative development of pharmaceutical drugs and cutting-edge medical treatment? One answer: a “major culture change spearheaded by top leadership.”
That’s the wake-up call sounded in a provocative study commissioned by UW Health and the UW School of Medicine and Public Health. Conducted by consultant Mary Westrick, who has 35 years of experience in clinical testing, the study lays out a series of stark challenges — both organizational as well as attitudinal — that threaten the campus’ declared goal to be a national leader in translating basic research into cutting-edge medical treatment.
Key to success, Westrick argues, is revamping the campus review of research projects that involve human subjects. UW-Madison’s existing clinical trial system, as Westrick and other critics describe it, is a quagmire of red tape that frustrates many campus researchers, while simultaneously failing to embrace standards that produce quality test outcomes.
UW’s existing clinical trials system places way too much emphasis, Westrick says, “on protecting the university from any risk, liability or adverse publicity.” This comes at a cost, she warns: “The result stifles potentially beneficial — even life-saving — research to patients with no counter-balanced benefit of increased patient protection.”
….Westrick’s negative assessment, while fiercely contested by some UW administrators, is part of a determined movement on campus to embrace the linkage of medical education, patient care and research discoveries to produce breakthrough treatments. The stakes are very high for UW-Madison both in terms of science and commerce.
Rock Mackie, an entrepreneurial-minded emeritus professor of medical physics who is UW Health’s first chief innovation officer, summed up the reformers’ challenge a few weeks ago at a luncheon meeting of Madison-area tech executives:
“How can we unleash the power of the medical university to incubate ideas into companies? To grow both the Wisconsin economy and to improve healthcare?”
To read more, please go here.
I wrote early about UW-Madison’s Discovery 2 Product program. I was mostly impressed by what I saw as a serious effort to turn UW discoveries into viable businesses. Given the UW’s paradoxical standing as a top-tier research industry with a ho-hum record for entrepreneurialism, D2P seemed like a crucially needed step forward.
Three years later I checked back to find that, despite some successes, D2P had fallen out of favor and now “exemplifies what the campus keeps getting wrong on entrepreneurialism.”
From the story:
Over the past five years D2P has — at different times — been heralded, well funded, disparaged, put on ice, reconfigured and revived at a far more modest scale than originally envisioned.
Along the way D2P also became an archetype of both the university’s talent at spinning a good story (UW is flush with publicists) and of UW-style Game of Thrones palace intrigue that sometimes leaves blood on the floor.
The program was created to assist both seasoned faculty researchers and ambitious students to get their bright ideas to market. Its boosters included campus notables Paul DeLuca, spotlighted in our story on UW med school innovations, and Mark Cook, a revered ag school researcher and serial entrepreneur. D2P’s decline, in part, can be connected to DeLuca’s retirement as campus provost in 2014 and Cook’s death in 2017 at age 61. Two important D2P sentinels were gone, and the effort suffered.
“It was slow death by a thousand cuts,” recounts former D2P staffer Will Robus. He cites how budget cuts, a hiring freeze and the overt hostility of its campus overseer, Vice Chancellor for Research and Graduate Education Marsha Mailick, crippled D2P. (Mailick, now retired, declined to be interviewed for this story.)
To find out how D2P went wrong, please go here.
In this dispatch on UW-Madison’s struggle to champion its groundbreaking discoveries and inventions, I frame the issue in these terms:
“UW-Madison is one of the great universities in the world, spending more than $1 billion in research funding a year. But increasingly there are complaints of sclerotic bureaucracy hampering research, indifference or hostility to business-supported projects, and an undistinguished record of launching tech startups from that bounty of research.
This story holds up the UW medical school as a campus leader in commercializing research, particularly with GE medical scanning devices. I explain how the creation of a health-care cluster in the west end of campus has paid off in better medical care by bringing together researchers, UW Hospital clinicians, patients and medical students.
This is the good news.
The bad news is how [other] business relationships continue to vex the campus. More typical is UW’s failure to reach a research agreement with the Ford Motor Co.
The auto giant had wanted a “master agreement” with UW-Madison that set the terms for joint research projects not just for a particular department or center — as is the Madison custom — but across the full campus, which has upwards of 200 separate research entities.
Ford’s interest is potentially huge for UW. The auto industry is facing an existential crisis as Silicon Valley disrupters — including Google’s Waymo, Uber, Lyft, Tesla, and others — try to push their way into the car industry’s driver’s seat. Led by a TED-talk kind of innovative leader named James Hackett, Ford continues to look for more strategic/holistic relationships with top-tier universities for research….
In late 2017, Susan LaBelle, then head of the UW’s Office of Corporate Relations, cited the failed Ford contract in a candid memo to her boss, Charles Hoslet, in explaining the “stagnant corporate sponsored research at UW-Madison.”
….That’s a big problem for Ford. “Almost all top-tier research universities are now willing to negotiate cross-campus master agreements,” says Ed Krause, Ford’s global manager for external alliances. He describes negotiating with the campus as “uniquely difficult.”
To read more, please go here.
Not long ago, the Wisconsin Policy Forum released a seriously wonky and widely ignored paper on levy limits. Even the mention of this arcane tax issue would send most people scurrying to FaceBook for relief. But while the topic is boring it is also important.
Since 2006 Wisconsin has dampened the state’s high property taxes by limiting municipal property tax increases to the rate of new construction in the community. At first, the consequences were muted because virtually all parts of the state were enjoying a building boom. But very quickly, the WPF researchers found, the state was hammered by two recessions, and new development was “increasingly isolated, with relatively few communities experiencing even modest growth.”
This core truth was the starting point of “The Two Wisconsins” series I wrote last year for Isthmus. It highlighted how a vast swath of the Dairy State is still mired in recession. I followed up with a recent column that argued the state’s gubernatorial candidates need to be challenged on how they would help the state’s left-behinds get on their feet. I wrote:
The heart of the Wisconsin gestalt in 2018 … is the economic chasm dividing the state. Simply put, the good times celebrated in Dane County, the Milwaukee suburbs, the Fox River Valley and a few other lucky communities are not shared in the forgotten precincts of rural and inner-city Wisconsin….
Lost in the huzzahs of Wisconsin’s record-low jobless rate and other benchmarks of success is the stubborn fact that the recessionary downturn that took hold at the turn of the century never ended for the state’s left-behinds. Too often, these are neighborhoods of troubled schools, dead-end or non-existent jobs, broken dreams and lots of drug overdoses.
The candidates need to be judged on how they would create broad-based Wisconsin prosperity.
To see how I lay out the issues, please go here.
Yikes, I’m late in posting this story from October 2017.
Consider it a postscript to my two-part series on the “Two Wisconsins”. In researching how Wisconsin might create a vigorous 21st century economy I sat down with startup maven Troy Vosseller. He had strong, specific ideas. The piece begins:
The question put to the venture capitalist was: How do you juice up the Wisconsin startup scene when the state is judged the absolute worst in the nation for fostering new businesses?
Troy Vosseller, 32, who’s a sure-footed Madison entrepreneur, was in an expansive mood as he held forth on the evils of non-compete clauses and Wisconsin’s bad-news rankingfor startups by the entrepreneurial-focused Kauffman Foundation.
He also made a forceful case for upgrading and expanding UW-Madison’s computer science program, arguing that Wisconsin is critically short of tech talent.
We were in the temporary Gorham Street offices of gener8tor, the new-business incubator Vosseller runs with partner Joe Kirgues and others to nurture the ventures they invest in. Next spring, gener8tor moves up to Madison’s signature spot for startups — the new StartingBlock complex on East Washington Avenue.
“I can’t name a single venture-backed startup founded by any ex-employee of the Wisconsin Fortune 500 companies,” he tells me. These companies include giants like Rockwell Automation, American Family Insurance, Northwestern Mutual, Harley-Davidson and Johnson Controls.
“Yet if you look at robust startup ecosystems like Silicon Valley’s it’s extremely common. You have people who, say, worked at Yahoo who have a great idea, leave their job to create their own company, have their ex-manager who made a lot of money in her own startup invest in theirs, and later the company is bought by Microsoft or who knows who.
“The virtuous cycle continues in those ecosystems,” Vosseller explains. “It’s commonplace. Yet here in Wisconsin I can’t think of one example [of a startup spinning off from a major corporation]. This speaks to a cultural risk-aversion we have, but some of the blame also rests with corporate restrictive covenants.”
Ah, yes, the non-complete clauses that Epic employees face when they leave the Verona campus and have to cool their heels.
To read more, please go here.
I spent 20 minutes or so discussing the “left-behinds” of the Wisconsin economic recovery with co-hosts Veronica Rueckert and Rob Ferrett of Wisconsin Public Radio’s Central Time program.
You can hear it here.
I wound up writing two Isthmus cover stories on the Wisconsin economy. In the first piece I detailed how our recovery was starkly incomplete. Sure, the overall economy led by Dane County had bounced back from the Great Recession. But too many of us were ignoring a less pleasant reality: There is is a broad swath of economic “left-behinds” in rural Wisconsin and inner-city Milwaukee.
My second story outlines an economic strategy that could turn things around.
The problem is that the state’s commitment to manufacturing, even with its smart nod to high-skilled manufacturing, is one-sided and overwhelming. Part and parcel of the yesteryear economics that holds up the chimera of mining as the savior of northern Wisconsin.
And consider that the Foxconn package is the costliest manufacturing subsidy project in Wisconsin history by a factor at least 10. And that payback in new taxes generated by Foxconn, assuming the campus develops as proposed, won’t come until many of us are dead and buried. No less than in 2043, according to the Legislative Fiscal Bureau….
Here’s the point: Government does best when it sticks to the basics. Infrastructure! Education. Transportation. Safety. Health. Parks. And if it does incentivize certain economic behaviors government should do so carefully and in a way that provides public good and not private payoff.
And there has to be a vision. Or as hockey legend Wayne Gretzky famously put it, you need to skate “to where the puck is going to be, not where it has been.” That isn’t happening. Wisconsin tenaciously holds on to the economics of nostalgia.
Stories by Marc Eisen 