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:

- Why scaling creates more dysfunction and information asymmetry at the board level

- How to distinguish symptoms from root causes in financial and operational issues

- What soft controls and people-focused leadership look like to maintain alignment

This episode is ideal for for Founders, Owners, and CEOs in stage 5 of The Founder's Evolution. Not sure which stage you're in? Find out for free in less than 10 minutes at https://www.scalearchitects.com/founders/quiz

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/

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?

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.

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?

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.

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,

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.

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?

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.

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?

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.

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?

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.

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.

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

[email protected] That's FoundersQuiz.com. It'll pinpoint

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