11: Your People are Your Product with Heinan Landa

12
Feb

Heinan Landa, Founder and CEO of Optimal Networks, an IT firm that serves law firms and associations in the Greater DC Area. He is the author of the bestselling book, The Modern Law Firm: How to Thrive in an Era of Rapid Technological Change.

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Your People are Your Product with Heinan Landa

Our guest is Heinan Landa, who is the founder and CEO of Optimal Networks, an IT firm serving law firms and associations primarily in the greater BC area. Optimal three unique are measurable business impact, a talent-attracting culture, and thoughtful, proactive recommendations. So, Heinan has been in business for 30 years, of which three years being running an EOS company. And actually, he went to Johns Hopkins, he studied engineering at Johns Hopkins, then he did an MBA at Wharton. And lately, earlier this year, he published the Modern Law Firm, which became number one Amazon bestseller. And it’s a really good book. You should read it, especially if you’re running a law firm or a professional service firm. It really gives you what the future is going to look like and how you can take your firm to the future. So without further ado, please welcome Heinan Landa. Heinan, how are you?

Steve, I’m blushing with that sort of an introduction. I’m going to have to bring my mother into the call to make her proud.

Okay, well, I’ll send you the link and you can share it with her or play it to her. I don’t know how tech savvy she is.

Well, she’s my mother. She’s extremely tech savvy.

She’s around 90 years old, right?

Only 75, yes.

I’m sorry, okay, then don’t share this with her. So let’s start with your story. I mean, you’ve been running Optimal for the last 30 years, but how did you get into becoming an entrepreneur and a professional service entrepreneur? How did that happen?

It’s a great question. And you know, it’s a story. So my parents moved here from Israel when I was about two years old and after many years of hard work, my dad decided that he wanted to start his own company. And it was really interesting. So at home, the discussion was always about the business and sales and manufacturing and applications and all sorts of things that had to do with the business and financials.

And so and then my mom and somewhere in 1980, I believe 1981, my mother went and joined my father in the business. And so that was the total discussion. Everything at home was always about business. And it was I always found it fascinating. And I went to Johns Hopkins and I studied engineering and that was fine, but it was not as interesting to me as all the management and all the business talks.

So I was just, when I went to Wharton, I really wanted to, I already knew I wanted to start my own business, and I went through the entrepreneurship track at Wharton, so I got exposed to many, many different types of businesses, and I realized that one of the best uses of my skills and one of the best places where I could help people sort of and help organizations was in technology and helping them use technology better. And so that was I came out I actually wrote the business plan for Optimal inside of business school and came out and started it.

That’s very visionary of you because that was around 1990, right? When you did that.

Yeah, near there, right, exactly, 91.

Just taking off, I remember the first word processors came out around that time and it was very clunky with a floppy disk, I constantly lost my documents. It was a very rough time in IT business, I think, especially the corporate IT.

Well, networks didn’t even really, they were just starting out back then. Most of it was just one or two PCs in the accounting department.

That’s right. Yeah. So, you know, Optimal is like a quintessential professional services firm. You advise low firms who are professional service firms themselves, so it’s a professional service providing it for the professional services industry. So how is it, you see a lot of professional service other than your own even, how is it different to run a professional services organization from running any other type of organization?

Well, I think the biggest difference is that people are important in every type of firm. Your team, the folks you have, your leaders, your producers, your providers are very important in any sort of, in any company, but in a professional services firm they are your product. The caliber of the people, the talent of the people, their skills, their expertise, their demeanor, their service orientation, all of that comes to bear in how your clients perceive you and the actual work you do.

So it’s not just, hey, I’m selling a widget, I’m selling lemonade, and the person serving the lemonade needs to be nice. The person is the product as well. So you need to pay a lot more attention, I think, to the type of culture you have, the type of leadership you want to bring to the table. And I don’t know that it’s, I mean, every business seems like has its own complexities, but I think professional services firms also tend to tackle some very difficult subject matter.

So if you look at other professional service firms like lawyers, like accountants, like advisors, like yourself, these are all complex topics that require a lot of ingenuity, creativity, brainpower that you are bringing and advising other people. So you know it’s just it’s a different format from running a restaurant. It’s a different format from running a retail operation. And I find it extremely challenging, extremely interesting. And one thing it never is, is it’s never boring. You never, you never come home at night and say, God, I’m so bored. Or just nothing to, nothing to do today. It’s not, not something you’ve ever heard me or anyone in my company say.

You’re definitely not. I mean, one of the things that you do is to create this fun culture at the company. And it’s kind of a light bulb moment that you explain this. We’ve been working together for three years. I’m kind of ashamed of not getting it earlier. But I always thought that this talent attracting culture was all about having, attracting this right kind of people to your firm so that you have good people. But it sounds like it’s at least as much about attracting the right kind of people who will be liked by the customers, the eventual clients themselves. So it’s not so much about them liking the firm, but them being likable and them being good type of people. So customers get what they want in formal service.

It’s both, right? Because one of the ways that professional service firms grow is by being able to retain their people for a long period of time. Because if you have, let’s say you’re providing, well, I don’t know, let’s say you’re providing technology services to a bunch of clients and you have turnover every year or every six months you have a year technician or your engineer who comes on site is leaving and you give it to not you get another one. Well, the clients don’t like that the clients like some distance II they like someone who gets to know them gets another imagine if you were a law firm and You’re all the lawyers Changed out every year that would not make your clients happy, right?

It would be terrible for the firm. So it’s really both. You really need someone who the clients will love and appreciate and respect their knowledge and what they’re bringing to the table. And you also want someone who feels that the company is really aligned with their way of life, with their values. And that’s why our culture is actually built on these values that we have. Tell the truth, do the right thing, and everyone benefits. And these values are the beginning of lots and lots of decision-making, hiring, firing, and sort of allow us to have the fun that we have and allow us to serve the clients with sort of a compass through North.

That’s really true. And in EOS, we have also this concept, the core values and how important they are and how you use the core values to drive your culture, to attract the right people, to repel the wrong type of people, and to then strengthen the culture to the point where it’s being projected out to your client. So they feel your culture. You don’t have to tell them what your values are. They just feel the kind of people you are.

By the way, I want to share that I had the same experience when I was building my investment banking firm. It took me several years to get to a point where I could attract the right kind of people because as a startup firm, no one believed that it was going to be viable. So it took time to attract them. And then they attracted the right kind of people. And it was, as you say, it was super critical that I didn’t lose my good people because that was the firm itself. So that’s a challenge. What other challenges there are for a professional service firm that you’re facing and you need to overcome or have to overcome?

I mean, you know, that’s clearly the key is that piece of it. And then because it’s a people-based firm, you always are struggling with the right balance of how many people to have in the organization in order to serve the number of clients that you have. You know it’s an interesting balance because if you have more people you can provide better service but you lose your profitability and it’s quite an art form it’s not really incredibly scientific but you get better at it over time at predicting you know when you have new clients coming on board and how much you need to staff that up in order to keep the service better.

So that’s always a challenge. And then the other challenge is to know what level of people you need to bring on board, how many entry-level people versus how many experienced people and what is the right ratios for all of that. We’re very lucky. We work with a company that benchmarks the industry. And so, we do have some guidelines that we follow and metrics and that helps. That helps a lot. And you know, what else helps a lot is the EOS scorecarding on that, if I may throw you a bone. The weekly scorecarding really, really helps keep an eye on how to manage that. That firm.

I also have another interesting challenge that we’ve actually been struggling with recently is that we are so service-oriented and client-focused that sometimes to our own detriment, and we tend to say yes sometimes without thinking through all of the ramifications. And that’s a very interesting challenge that you have to have people pause and think before they just jump to say yes to whatever a client wants because sometimes that’s not actually in the client’s best interest. And you want to at least talk through the options with them before. These are all ways to serve the clients better, actually, you know, and that’s and these are all the trade-offs we make to try to serve them as best as possible. And hopefully that grows the reputation and grows the company.

I totally resonate with that, both ideas. So the first one I want to react to is when you say that to determine the right number of people in the organization is difficult. It reminded me of an interview I went to a big investment bank, Schroeders, which I think became part of Salomon Brothers and part of Travelers Group over the years, but it was one of the blue cheap investment banks in London in the early 90s.

And I went to an interview and the guy was telling me that they actually always deliberately understaff their department because they find that it’s the most effective way for them to work. So they always, everyone is always stretched, they understaff, but then they see someone that is really good, then they’re gonna hire them even if they don’t have a position for them because they know that that person is gonna earn their keeps. So that was kind of a nugget I wanted to share, which is really interesting.

That’s interesting, yeah.

So, switching gears, if you look back at your 30 years career, what was the greatest success that you feel like was the moment when you really broke through and you felt that things are never going to be the same, that you really made it. Can you pinpoint that?

No. Wait, let me think about it some more. You know, it’s very difficult to think back on a greatest success over a 29 year. I think we’ve had a lot of successes, a lot of really good moments, and I can tell you some of them, but I think it’s probably wise to put it in light of sort of my darkest moment. So let me actually give you a contrast. So probably 25 or 26 years ago, you know, the company was just a few years old and truthfully I didn’t know what I was doing.

I wasn’t, I was a young kid and I was trying to put together this business and I wasn’t particularly good at managing money and I didn’t know exactly what was happening and I couldn’t seem to get things going. I couldn’t get things going. I remember sitting in my office and one of the people who was working for me was actually a very accomplished CFO. He came to me and he said, look, we’re not getting any sales and it seems like we’re in debt. So how much debt are we in? I’m like, I don’t really know. He goes, why don’t you count it up? I go, that’s a great idea. So I sat down and I counted up my debt and it amounted to nearly $100,000.

And I have to tell you that with no sales and no real revenue coming in, look, facing $100,000 of debt was like a mountain that I cannot, I did not seem like you could climb it. And I came home that night and I was depressed. I mean, not clinically, but I was upset. And I sat at our kitchen table and my wife came home and she greeted me with a little gift. And it was like this long box and I opened it up. And I don’t know if you remember it, it was a tie. And it was one of the save the children ties, you know, with all the children on it. And it had a little card on it, and it said, guess what? You’re going to be a daddy. Oh my gosh.

Success is not about one breakthrough moment but a culmination of countless victories and learning experiences over the course of a career. Click To Tweet

Okay.

And I have to tell you, Steve, that that was probably one of the most difficult moments of my life. Not personally, I of course was happy to be a father, But how do you, are you looking at this, you know, fledgling business that’s faltering and you’re saying, oh my God, what have I done?

Mistakes suddenly double.

So I sat down and I did like the Benjamin Franklin. I literally took a piece of paper and I took a line and I put it down the middle and I said, what are the pros of continuing this company? What are the cons of continuing this company? And I figured you know I could probably get a job. You know I was a Wharton graduate I should probably be able to make a reasonable amount of money. How long would it take me to dig out of a hundred thousand dollars worth of debt and what did my future look like if I did that? Versus what if I actually figured out a way to make optimal networks function and grow and succeed.

And I said and I looked at the two and I said no I must make this company work. What’s what’s my biggest problem? Sales. I don’t know how to sell. Well what do you do this is a conversation I was having with myself. Right. The problem with sales. Well what do you do when you don’t know how to do something. You read about it and you learn about it and you figure it out. And I went and I bought a bunch of sales books and back then they had Zig Ziglar was a sales master and Tom Hopkins and whatever.

I read like a whole bunch of different sales books and I was like, oh, so this is what I need to do. And a year later I had grown this company to about a million dollars in business through personal sales efforts. And you’re like, from a company that was almost zero in revenue to a million dollars in the course of the year, that’s huge, it was a pretty decent success.

But how many people did you have in the company at the time?

Four.

Okay, so there’s high gross margin, right? It’s all gross profit.

Yeah.

Most of it, yeah.

So that was one success, but had to contrast it. Another success, interestingly enough, was when we started to do a couple of acquisitions. This was maybe seven to 10 years ago, we did a couple of acquisitions. One of them was cloud services company that we have invested a lot of money in. And we we closed the transaction and we were actually able to take this little germ of a company that we had bought in the cloud. This was the cloud before it was the cloud. Right. No one called it the cloud.

And we were able to transform it into what is now the basis for a brand new service we’re launching called Law Firm Anywhere. And you can go to lawfirmanywhere.com. It’s very exciting. It’s a whole virtual desktop specifically for law firms that we’re bringing into the marketplace regionally. And I’m very, very excited about it. So that was that end of it being a major success. And then the other successes, to be very honest with you, Steve, have a lot to do with how we’ve been able to really help our clients.

I don’t know how to explain the warmth that I feel every time we’re able to take a company that hasn’t done very well with their technology and turn them into a company that is working well with technology. That is a tremendous success and the compliments that they give us, the projects we’ve been able to do for organizations without disrupting their operations. You know, all these, when the clients come forth and they give us compliments and they say, you were fantastic, these to me all add up. And I think you were at our open house.

The true warmth of success isn't just felt in financial gains but in the satisfaction of clients whose businesses have been elevated. Click To Tweet

Yeah, about six months ago. Yeah, well after the pandemic.

Yeah, good timing. And you saw our clients come and our partners come together and our advisors and our vendors and our people and all come together. And to me that represented one of the greatest successes ever, which is that we’ve actually formed a community. And in fact, this is something I’ve never, I never expected. When I started this business, the last thing I expected was that I would be forming a community of business professionals, of people, a warm and authentic community of people who really like each other. And that, to me, is probably one of the best successes ever.

And that’s a very powerful position when you can do that, because when you become that centerpiece, that intermediary with your clients, you bring them together, they’re gonna sing your praises most likely, because that’s why they came, because they like you. So it reinforces the value that you’re providing. And then you add this extra layer of value. You’re not just providing the IT service, but you’re also providing these connections, which are super valuable for these people. So what is one thing that Optimal Networks, your people, I mean, you’ve got a great team. I always smile when I see your LinkedIn posts with these animals, you know, coming to the office and obviously it’s not happening right now, but you always have some fun activities for your people. And I guess that they reward that with doing outstanding work for your clients. But what’s one thing that Optimal Networks did for your clients that you didn’t expect when you were surprised?

The other thing that surprises me also every single time is how much I enjoy the company of the people I work with. And we have twice a year we have what we call spirit days. And it’s one of them is on a weekend and one of them is on Columbus Day. So hopefully it doesn’t affect the client service, but we turn off as much of the service as we can and we focus on doing fun activities, team building activities. We’ve done everything from whitewater rafting to taking over amusement parks to escape rooms, all sorts of fun things that we found a way to do. And we also spend time working on the business and trying to improve what we do as an organization. And every single time I come out of those days, I walk into them going, oh my god, what’s going to happen this time? And I walk out of them saying, what a phenomenal team of people I’m working with on a daily basis. Like, how privileged am I? How humbled am I? And I never really expected to be that way.

I think that’s one of the perks of being a business owner, that you can really choose the people you want to work with and you don’t have to put up with any nonsense that you don’t want to. Yeah. This is also something I like about professional services in general, that the people that you work with tend to be intelligent people, accomplished people, and that also makes life fun Who you can have a good conversation with. So let’s switch gears here a little bit. And I’d like to ask you about where do you get your information? So who are your mentors or who have been your mentors over the years and how do you tap into the knowledge of other people other than reading books and listening to seminars?

Well, it’s a good question, and I think it’s a question of what attitude you have. Are you someone who knows everything, or are you a perpetual learner?

Green and growing, or ripe and rotting, as we say?

That’s right. And I like to keep my eyes open everywhere. So first of all, I like to surround myself with coaches and advisors that are smart and can reflect back, who understand the business of a lot of experience. And this is true on all fronts, right? So it’s everything from my accountant, who runs a 80 person accounting firm in Bethesda, who knows entrepreneurs, who understands me and my situation really, really well.

It goes to my attorney, it goes to, you know, financial advisor, it goes to to you, who has been our EOS implementer for, you know, ever since we started with this, and you have a phenomenal background, and I know this is not meant to be a plug for you, but, you know, it’s important because we need your perspective to keep us on track and to keep us sane. And we do tend to joke around a lot and you help us keep on track and accountable to each other. So that’s really terrific. And then, you know, I first met you when you gave a presentation at Vistage.

And so that Vistage was a source and is still a source for people inside my company to surround ourselves with peers that are doing what we’re doing. You know, and my Vistage group actually broke off and now I’m part of the Boss World group, but it’s still always an attempt to surround yourself with people inside the organization and outside the organization who are gonna open your eyes to new ideas, to new thoughts, and, you know, make sure that you’re not wedging yourself into a bad attitude or bad behavioral patterns and help you find new opportunities.

There’s a Jewish saying that my father always used to say, that is, from all my students I have learned, right? So it’s not just people above you or to the side of you, it’s people who you’re mentoring, it’s people who are part of your team. You also learn from them, and they learn from you. And so it needs to be that way. That’s just an attitude. It’s an approach.

Surround yourself with mentors and advisors who reflect your aspirations, for their wisdom becomes the compass guiding your journey. Click To Tweet

Plus, when you mentor other people, you learn from that, too, because you actually have to express yourself. You have to connect the dots. And while you’re teaching other people, suddenly things become clear to yourself, and that’s very useful.

Yeah. In fact, you know that that’s one of our core behavioral traits, which is continuously improve self. We’ve actually woven this into the fabric of the organization, because those are the kind of people we want around us.

One of my other clients have the core value to willing to learn and teach others. It’s kind of both sides of the coin.

I love it.

And, you know, it’s great that you’re part of the great boss or the dead boss coaching world, David Dougherty’s group.

Yeah, Boss World.

Boss World. It’s great to have for you to have an outside coach because EOS doesn’t really do that for you. So the idea is that with EOS, you work on your team together with your team, but you still want to be able to bounce ideas outside of your company, people from other industries. You can have issues with your team that you don’t want to discuss with them because first you have to formulate your position. And I think it’s really important for people to have both connections, that work with your people outside and inside the company. Okay, so we talked about EOS. How has EOS helped your business? What do you feel you guys have gotten out of it? You’ve been doing it for over three years. You were one of my first clients and you’re still hanging in there. I tried to graduate you, but you wouldn’t.

We refuse, we refuse, frankly. Look, EOS came at an interesting time for us. And, you know, we’ve always, I don’t wanna say we’ve always had our culture because the culture is always a work in progress and it keeps improving. We had a lot of talented people in the organization and we had the desire to grow and we had lots of intentions to grow and lots of plans to grow. where everyone was doing what they thought was right, but people were not coordinated throughout the organization.

And when I saw Traction, when you gave us that 20-minute discussion on Traction as a management blueprint, I realized that that was what we needed. It was, we were trying this, and we were trying that, and we were trying the other thing. You know, there’s so many business ideas out there, right? And they’re all good, but you sort of have to pick something and you have to hang your hat on it, and it has to become the way.

You know how there’s like all these different management techniques where you do a five by five with your direct reports every week or every month, and there’s a 15 by three, and there’s a once a week pulse and there’s a it’ll drive you insane you know you could there’s so many different management ideas every management idea has merit you know a lot of them have merit and you could say but which ones do you pull together and it’s like it’s a whole different design so he said wait a minute someone has sat down and thought this through and read all these books for me. I mean, I read them too, but that’s not important, and distill the ideas into a how-to document that says, here’s how often you have to have your meetings, here’s how you run your meetings, here’s how you deal with your issues, here’s how you deal with your management team, here’s how you do your to-dos, here’s how you do your accountability, and someone’s gonna come in and they’re going to basically take this system and push it through my entire organization and train us and keep us accountable to it on a regular basis.

That was exactly what we needed at the time. It was like someone had written a prescription for the correcting for optimal networks. And we still have some management practices from before that we can’t quite let go of. But almost across the board, we are EOS. And from the top to the bottom, and it works, it works. And the people at all corners of the organization understand where the company is going on a quarterly basis, on an annual basis. And they all are rowing in the same direction.

And it was so helpful, it was so helpful to be able to sit with a leadership team on a quarterly basis and a yearly basis and design where we’re going and then be able to have that permeate throughout the organization so we’re all working together. I don’t even know how to explain it. Then, EOS really makes you think through where you’re going. It really helps bring the vision down to brass tacks. And I think one of the most amazing things that we decided as a team that was due to EOS was we were able to talk about our niche market, our actual market.

And we have for 30 years, we have served law firms, association and small business. And we decided to hone in on law firms and associations. And that was very powerful. That was very, very powerful. So it became more than just a marketing game. It became really who we were as an organization. That was very bad. That’s what helped prop the book, right? Because if you’re working very closely with one target market, you can really become knowledgeable in what affects that market and how you can help that market.And this book is getting traction, all puns intended.

I mean, we like to say less is more. So it feels scary in the moment to let go of some markets that you are serving because you feel like, oh, we’re gonna have less opportunities, we have less prospects, and how are we gonna compensate for that, and we are harming ourselves, and what if it’s not gonna work out? But the opposite happens. You start to focus on one thing, and the universe takes notice, and they will start to notice you because suddenly you are someone who is doing something specific rather than being all things to all people and suddenly you become much more attractive. And I think recently the law firm association chose you as their thought leader, right? You’re doing webinars for the-

So we’ve been doing webinars and lunch and learns for the local association of legal And because of the book, the American Bar Association has asked us to do webinars for lawyers across the United States for continuing legal education credits. So we’re doing that on a monthly or a bimonthly basis. It works. We were able to focus our efforts and get known even better in the legal field. And that was very gratifying.

That’s awesome. Moving towards the end of our conversation, let me ask you a couple of kind of funny questions, perhaps. OK. One is that you’re in a technology firm and it is easy. It’s sometimes it’s difficult for outsiders to really understand what you do. So if you if I ask your mother what her son is doing, what would you say? How would you describe what you do for a living?

Well, I don’t know what my mother would say. She’s a funny person herself. But, look, you have to get the sense of humor from somewhere. I would say that we basically help law firms and associations and professional services firms with their technology. So we can either be their IT team, or we can help their IT team if they already have one in there. Everyone needs a place to call when they have issues.

Everyone needs someone to work on their technology strategy so they know where they’re going over time, make sure that they have the right recommendations, make sure that they have a platform they can work. And in this day and age, make sure that they have a platform that they can work from wherever they need to be, whether it’s home or whether it’s the office, and you know that’s what we do for them. We keep them going and we keep them going forward. So I would say, I don’t know exactly how my mother would put it, you know what I’m going to tell you how my mother would put it. She would say he helps people with their computers.

It makes a lot of sense. So, she gets you.

Yeah.

That’s good. That’s good. So listen, I don’t want to, you know, we could talk all day. We could continue this conversation and we will continue this conversation in another forum next week. But for the benefit of our listeners, if they would like to learn a little bit more about you or about Optimal Networks, where can they reach you?

Well, so they can learn more about Optimal Networks at www.optimalnetworks.com. Okay, that’s easy. Easy. If they want to know a little bit more about my book, themodernlawfirmbook.com.

And it’s available on Amazon? Otherwise, it couldn’t have become number one?

Yeah, I think it’s just modernlawfirmbook.com. I always get confused. But, you know, it’s actually an interesting read. It’s a quick read. It’s around a little over 100 pages. It’s dense, but it’s very engaging and it’s worth it. What else can I tell you? Oh, and find me on LinkedIn. That’s the best place for me these days. I spend a lot of time there. I’d love to connect. You’re welcome to reach out. Welcome to connect with me. So I’d be happy to talk to anyone that’s in your circle, Steve Mix. I would be super pleased to talk to.

Okay, well thank you for that. So, Heinan Landa, CEO and founder of Optimal Networks. Thank you for joining us today. 

 

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