In this perceptive episode, Jonathan Maharaj, Founder of Aurora Financials, shares how to bridge the growing information gap between you and your team as a stage 5 founder. If you’re leading executives but struggling with confidence in the numbers and hidden dysfunction, you won’t want to miss it.
You will discover:
– What soft controls and people-focused leadership look like to maintain alignment
– Why scaling creates more dysfunction and information asymmetry at the board level
– How to distinguish symptoms from root causes in financial and operational issues
Episode Transcript
Scott Ritzheimer
Hello, hello, and welcome, welcome once again to the Start, Scale, and Succeed podcast-the only podcast that grows with you through all seven levels of your journey as a founder. I’m your host, Scott Ritzheimer, and if you’re one of those founders listening today, especially from level five, you’re leading a team of executives, your business is running strong, reports are coming in, compliance is handled, the machine is moving, and everything looks like it should be good. But you’re still not confident that you’re making the right decisions, and and there’s still something bothering you-not just about financial clarity, but how it’s going to show up in the organization. Well, if that’s you, you are not alone. It’s a common challenge in this level, and here to help us out and solve it is Jonathan Maharaj, who is a financial thought leader and founder of Aurora Financials, based in New Zealand. For over 20 years, he’s worked as a CPA across auditing, consulting, and strategic finance, helping founders, executives, listed companies, and global brands focus on what truly matters. He helps leaders see the story behind their numbers, so they can move faster with more confidence and have fewer financial blind spots.
Jonathan, welcome to the show from the other side of the world. Here with us, bright and early. Well, thanks for being here. Really happy to have you on. Excited for this conversation. I want to start with a question here because you’ve had the opportunity to to walk into meetings with boards with executive teams, and there’s this situation where the financials can look okay. Maybe the compliance checklist is there. Folks are kind of doing what they’re supposed to from a process standpoint, and no one can quite put a finger on it. But there’s just not the confidence that they need. What’s going on there?
Jonathan Maharaj
This level that. Thank you for having me, Scott. Firstly, I really appreciate the opportunity to be here and to speak with you and also share insights with your audience. This level is really crucial because your your business or your organization is scaling fast, and the challenge that a board has is that a board governs, a board does not operate, and I call that a challenge mainly from an information asymmetry point of view. The operators of the business who are at this stage most likely to be your senior executives, your middle-level management, and actually your staff, the you know the front line, they’re the ones who have access to the most up-to-date information. They know what’s happening. You know, they know that a project’s going to go over budget. But at the board level, you only get access to what you get given by management, unless you have concerns about what’s happening, and so I think you know the topic we will talk about today is really interesting and valuable because in your gut you know that something is just not adding up. You know, based on you know your experience as the founder who started from the very beginning and started to scale it, and you know the metrics, and it just doesn’t make sense. Or an independent board member who’s coming in with with relevant industry insights and and things just you can’t put your finger on it, but you know that that there’s something missing from the story that you’re getting from the numbers you’re being presented.
Scott Ritzheimer
Yeah, how do you start to chip away at that? Because it’s a really big divide and it’s one that I think a lot of founders struggle with because you know if they look back over the history of the organization most of it they were right there they were in the thick of it they didn’t have to worry about what was getting filtered to them or what wasn’t so with a founder who who’s now kind of struggling with that gap and wondering if they’re actually getting the information that they need, or if it’s getting filtered more than it should. How do you help folks to start to chip away at that?
Jonathan Maharaj
I think the first thing is really to get to the root cause of the issue, and a lot of times, many founders they are focused on the symptoms. So, for example, right, sales may be less, or sales may have fallen this quarter compared to projections, right? I would say that is a symptom. I don’t think that is a root cause. The root cause is further down the channel. Was there something that happened with the quality of our products or our services? What is our, you know, what are our customers saying, and and the thing I say is like as the founder, as the business scales, the founder really gets detached from the day to day running of the business, right? And so my goal with them is you know you don’t have to go back onto the front line, but you do need to kind of walk the shop, as they say. You still need to kind of figure out. Hey, when I was on the tools, building this business, this was how we did it. What’s changed significantly? And if sales is the issue, if sales is down, then you know, typically management at this level, it becomes political, right? And and I want to share this because we do audit. Right, and and I am an auditor.
That was my first job at PwC, and even in our firm today, we do audit, accounting, tax consulting. Right, which gives us the 360 of what’s happening. So I always have this auditor mindset when there’s issues, and we’ve always been trained to have this level of professional skepticism, where you trust but you verify. And so when there’s an issue as a founder, typically there’s three buckets that I’d put them in. Right? There’s either it’s the system issue, it’s a process issue, or it’s a people issue. And I would say in most of my experience, it’s the people issue, because you can have an amazing system, you can have an automated process that you know does everything perfectly, but you still need people to press the right buttons and to do things right. And as you scale at this particular level, the hardest thing to scale is culture, and having the right people with you that had the same vision that you had when you started, had the same genuine care for your customers, had the passion and drive to kind of go above and beyond, you know, the job description. Because as you get bigger, you know, the office politics starts getting introduced as well. Whereas when you were at the founder level, when you were building it, it’s just you and your customer. There’s no gap between.
You know that you don’t have to worry about all this other stuff. But the bigger you get, people tend to start self-preserving. So what that means is that because you have a say stable or secure job, even though job security there’s no such thing as a job security, jobs can go at any time if markets change. People tend to preserve or self protect. You know, so if things things are going wrong, rather than escalating it promptly and you know getting the heat for hey you were the manager why did this happen on your watch, people tend to go like oh you know things will sort themselves out and and until they don’t until things get bigger, and then you know by the time the board starts sensing that something’s wrong you the the whole the horse has basically left the stable right it’s out there in the wild, and they’ve got to rein it in, and it’s hard. It’s hard to do that. So, I mean, founders do still need to be quite close to the business and quite close to the customers, and I think the customers is an important one because they can give you unfiltered feedback on what’s happening.
Scott Ritzheimer
I think that’s really good, and and one of the things that I like to see founders at this level do is if you kind of look at the history systematically, we’ve been moving them further and further from the front line. Right? They used to do it, then they manage the people who do it, then they lead the people who manage the people who do it. Now they’re leading the executives who lead the people who manage the people, and it and it can create so much of a gap that two things happen. One, this this kind of information problem that you’re describing, but then for a lot of founders, they started the thing because they love the thing, and so not only do you start to lose some of the information, but you can lose the love for whatever it is that you do in the first place. And so, what I like to see them do is to create space, and it looks different for everyone, to get back to the front line because you can, not because you have to, right? So you don’t have to be the one, you know, soldering pipes, you know, when they burst, you know, at three in the morning or whatever it might be, but being giving yourself an opportunity to be close to it again, I think, is so helpful from an emotional perspective and from a financial or informational perspective. Would you agree,
Jonathan Maharaj
Scott? The point that you really are touching on is that leadership changes as the business grows bigger, and I don’t mean the fundamentals of what makes a really good leader changes, right? You know, so servant leadership, empathy, providing good feedback-all of those things, those ingredients still stay. But I think the type of leadership changes mainly because you can’t, or you are not now leading every single frontline worker directly, you are now leading and influencing, you know, your first degree of management, and hopefully through them and their values, beliefs, culture, and alignment with the organization, and you, who hired them, will be able to kind of perpetuate the same culture and and and beliefs across the organization, right? And I think the key thing here is, as leaders, you know, and this is a this is I don’t know if this is scientific or not, but it’s just my experience. The bigger the organization, the more dysfunction there is, and the reason for that is because you get to a certain level where executives are very well paid, and you know you as the founder, you’ve kind of checked out of the organization mainly because you know when you were in the early stage of the grind or the hustle, as people call it, like you’re there, you know, 24/7 If if something breaks with the pipe, if it’s plumbing, you are there on the front line. Your customers see you. You build the value, but.
Now you’re relying on others to do that, and I think that you get to a certain level as the founder that you just can’t be everywhere always, and you need people, and you have to trust that they’ll do good. And this is why I say it’s really hard to scale culture. But what I’ve seen in organizations is that you know if you have the right person and you have the right values. You treat your people well. You’ll be able to attract the right kinds of managers and people into your organization, right? Because you know if there’s an issue, or people, your people know that you will handle it transparently, consistently, and fairly. You know, and that you know what does that mean as a leader? It doesn’t mean that you sugarcoat everything, but it means that you think about the people that are working with you, your you know your loyal staff, and if market conditions change and you have to restructure the business, you have to let people go. You know, for me, it’s always the hardest decision as say a CFO or somebody who’s supported founders in turnarounds because behind the numbers is people, and that’s why I’m saying. When you look at the numbers, you think about the story. Like, how did we get here? What did people do? What decisions did they make? What families will be impacted by this? And you have to be upfront. You have to say, look, guys, we’re doing the very best to save as many jobs as we can, but these are the situation. These these are the circumstances that we’re facing, and I feel you know at this level, leaders they still need to lead, but it’s leading differently.
Scott Ritzheimer
From this kind of auditor perspective, where do you see where do you see this go wrong? So, founder again, I think it’s pretty safe to say for the vast majority of them, there’s a base assumption that they they really care about the work that they do. But like you said, as organizations grow, and this is like shocking for for me, even though I’m in this world, to still say it. But it’s like the idea that businesses get more dysfunctional as they grow is so true. But it feels like it it’s the opposite. It feels like it’s more put together. It feels like we’re doing more of the right things. It feels more mature. Where do you see that that kind of disconnect show up, especially from an auditing perspective?
Jonathan Maharaj
I think the key thing is a lot of times when we’re thinking about issues, we focus on what we call internal controls, right? And the the version of internal controls that we have is often described as a hard set of internal controls, right? So you’d have two people or three people signing off checks or bank payments before they go out, right? You have layers of you know preparer, reviewer, approver, that kind of thing, right? And all of those things, those mechanisms, I would say, fall into the systems and processes bucket, right? Those things are easy to fix. I think the challenge when it comes to really this part of scaling is the soft controls, you know, the psychological safety of workers, the alignment of values and beliefs, right? Whether your people are actually okay, are they worked to the bone? Are they, you know, is it unsustainable? And maybe this is an issue of sustainability as you’re trying to scale and grow faster. There’s a physical limit on how much your people can do, how many boxes they can pack. Do we need to invest in automation, right? And I think the soft control side or the people side is really the shift in the leadership. So at the early stage, right, the founder is really built is focused on building the business and making the customer happy, and that’s all around the systems and processes. Then as you start scaling, you’re getting more people, more people.
Now you’re getting investor funding. Now your reputational risk is the highest concern that you have because investors don’t like what you’re doing. It’s going to be in the media. It’s going to affect the next round, your next business, your legacy, all this stuff, right? And I think you know, as you get to this phase, that’s what complicates it. That’s what makes it a bit dysfunctional because it’s no longer just one to one you and your customer without all of this other stuff. There’s now more stakeholders involved, and I feel as a founder, the key thing is to get the right people on the bus with you, right? Because if you trust that they’ll do the right job, if they’re competent, if they are paid well, if they are have got very clear KPIs, and KPIs, I think, is where the founders and the board can really start shaping what they want to see. So, for example, right, if you want to see, you know, if your net promoter score is low, and most of the complaints that you get is really about your contact center or some other thing, right? People are waiting in the queue for too long, right? So you make sure that every single level, from top to bottom, has a KPI that’s related to solving that level of root cause.
And when everyone is aligned, and I and I really bring it back to like the soft controls probably will be stronger than the hard controls because if every. One is incentivized to make sure that the net promoter score goes up because a higher net promoter score means, you know, your your Google reviews, your you know Glassdoor ratings, all of this stuff increases, and you you’re able to attract more customers. Then everybody is going to put in the extra effort because they know there’s a link between doing stuff and getting the incentives. Right? If the link is broken, people will be like, you know, why should I, why should I do 20% more if there’s no certainty that I’ll get this bonus? So you know, the dysfunction really is trying to manage all of these different interpersonal situations and people and behaviors and stakeholders, while trying to just put everything, you know, keep everything coherent and growing together.
Scott Ritzheimer
It’s it’s so much and so little all at once. It really is a lot to think about and a lot to do. But you have to keep your eye focused in a very narrow window. Now, Jonathan, there’s this question that I have that I ask them. I guess I’m interested to see what you would have to say to it. The question is this: What is the biggest secret you wish wasn’t a secret at all? What’s that one thing you wish every founder watching or listening today knew?
Jonathan Maharaj
I think every founder starts a business focused on you know the vision of of how this company is going to be amazing, and you know, you start off with such enthusiasm. You invest your savings. You your family is supporting you, and all of that. But I think the biggest secret is, and and and this is just from experience, is that business is hard. It’s messy. You know, it takes a lot of courage. You face a lot of risk in the U.S. There’s a lot of litigation as well. You know, somebody scratches their finger, and all of a sudden it’s a lawsuit, and you know all of this other stuff. And so you’ve got to manage all of these things.
So I think you know, using my auditor background, like go in with a level of professional skepticism, still believe, still walk with faith, still you know do your best, but have a realistic approach, right? You know, like look at the market first. There are really big players in there. Like you will be crushed. You’ve got to fight asymmetrically. You’ve got to do things differently. And I think if you spend more time doing the planning and the thinking and the self-reflection of really this is where I can fight and play better, I think you’ll do really well because business is hard. And I feel like if you if you’re realistic about it, you your chances of not being in the statistic of what 20% of startups that fail in the first year and 80% in 15 years, you can you can break that trend. So go for it. Just keep doing your best, but you know, just keep your eyes in eyes open to changing market conditions.
Scott Ritzheimer
Yeah, Jonathan, there’s some folks listening that would love help just navigating this space, particularly from a financial perspective, where can they reach out to you and find more out about the work that you and your team do?
Jonathan Maharaj
Sure. So I’m on LinkedIn. You can connect with me on LinkedIn, or you can just come to my website, which is www.jonathanmaharaj.com, and it’s got my contact details there. But happy to continue the conversation there.
Scott Ritzheimer
Brilliant, brilliant. Well, Jonathan, thank you so much for being on the show. It was really a privilege and honor having you here. And for those of you watching and listening, you know that your time and attention mean the world to us. I hope you got as much out of this conversation as I know I did, and I cannot wait to see you next time. Take care.
Scott Ritzheimer
Hey everyone, Scott Ritzheimer here. Thank you so much for listening to the Start Scale and Succeed podcast. I hope this episode gave you exactly what you need for the level you’re in right now. If you want to discover what level you’re in, take our 10 question Founders Evolution Quiz for free at Foundersquiz.com That’s FoundersQuiz.com. It’ll pinpoint exactly where you are and give you tailored tips to move forward and reach that next level in your journey as a founder. If you got something out of today’s episode, don’t forget to subscribe, rate, or review. It helps us reach more founders like you, and let’s be honest, it means a ton to me, my team, and all our incredible guests. So keep starting, scaling, and succeeding, and I’ll see you in the next episode.
Contact Jonathan Maharaj
Jonathan Maharaj is a financial thought leader and Founder of Aurora Financials based in New Zealand. For over 20 years, he’s worked as a CPA across auditing, consulting, and strategic finance, helping founders, executives, listed companies, and global brands focus on what truly matters. He helps leaders see the story behind their numbers so they can move faster, with more confidence, and have fewer financial blind spots.
Want to learn more about Jonathan Maharaj’s work at Aurora Financials? Check out his website at https://www.aurorafinancials.com/
Connect with Jonathan through his LinkedIn at https://www.linkedin.com/in/jonathanmaharaj/
Check out his personal website at https://jonathanmaharaj.com/