IDEAS / POST
Your Numbers Are Lying To You
A conversation with Jeffrey Kishner on why the financial data companies trust most may be the thing keeping them stuck.
Lorraine McGregor and I occupy an interesting corner of the business world: we solve non-obvious problems that stall growth in founder-led companies. Problems that, all too often, are misdiagnosed as flaws in the system, when they’re actually rooted in psychology.
Jeffrey Kishner is the founder and president of Epoche Insights. He’s spent his career inside PE-backed companies that needed serious change, building strategic finance functions from scratch, closing the gap between growth theories and growth execution. He is not a commentator on organizational dysfunction. He’s the person you call when you’re inside it.
We sat down with Jeffrey (you’ll find the full podcasts at the close of this story) and talked about an Achilles’ Heel of financial thinkers: in most founder-led companies, the financial planning process is built to report the past, not illuminate the future. When you’re trying to diagnose why growth has stalled, a rearview mirror makes a terrible instrument.
Strategy, Budget. Budget, Strategy. And Never the Twain Shall Meet
When Jeffrey engages with a company, the entry point is almost always the same. He asks how the budgeting process connects to the strategic plan. The answer is almost always a polite version of: loosely.
This isn’t negligence. It’s a natural consequence of how companies evolve. Strategy happens in one room, with senior leaders looking outward. Budgeting happens in another room, with finance looking at last year’s numbers and adding a growth percentage. The two documents end up adjacent to each other, not connected.
The result? Resources flow toward things that made sense in a previous chapter. For example, the strategy says “we’re going after enterprise” and the budget still funds a sales team built for SMBs.
The misalignment isn’t visible on any individual line. It’s in the gap between the two documents. More often than not, nobody is officially responsible for closing that gap.
Jeffrey, on the other hand, is looking for that gap. He calls it the moment when companies outstrip their ability to operate in an informal way. The founder instinct that worked brilliantly at 20 people – intuitively closing gaps and connecting the whole operation – becomes the single biggest obstacle to clarity at 200.
The Founder as Bottleneck. An Uncomfortably Common Truth
In most founder-led companies of a certain size, all roads lead to the founder. Decisions get made in hallway conversations. Critical knowledge lives in one person’s head. The operating system isn’t a system, but a person.
Investors and acquirers have a term for this. Key person risk. When it’s unearthed in due diligence, deals slow down or fall apart. Jeffrey described a company whose core operating software, the code that allowed the business to fulfill its brand promise in the marketplace, was completely undocumented. If the person who managed it left, the company couldn’t run. Nobody on the leadership team knew this.
Lorraine’s frame here is typically direct: if you can’t prove it, no one can buy it. The value a company believes it has created and the value an outsider can verify are rarely the same number. And the gap doesn’t close itself.
The Silo Problem Nobody Thinks They Have
Earlier, I wrote that Lorraine and I deal in non-obvious problems. One of those problems is siloes. And the reason it’s non-obvious is that the people in them usually don’t recognize it.
As Jeffrey reflected, when you’ve spent years sticking to your lane, it’s hard to comprehend that your mission-critical outputs aren’t being seen by someone who needs them, three departments over. True, the C-suite usually grudgingly acknowledges information could flow more effectively. But the people actually doing the work are often blissfully unaware.
Jeffrey’s prescription is to build what he calls a learning organization. In his words, that involves creating a strategic finance function that doesn’t just count things, but actively moves information across the company: up to leadership, down to execution, and sideways across functions that should be talking and aren’t. The budget becomes the connective tissue, making the annual operating plan a document that maps explicitly to strategy.
It takes about two years to fully embed. And yes, if you neglect it, the silos grow back.
Go Slow to Go Fast (The Thing Founders Hate to Hear).
The instinct in most founder-led companies, when something needs to happen, is to just do it. Move fast, fill people in later, apologize for the process after the results are in.
This approach does work at small scale, although it brings fear and loathing along to the party. But at larger scale, it creates enormous rework, bad decisions, and cascading misalignment.
“It almost seems counterintuitively faster if you don’t engage all the people needed to maintain alignment,” Kishner reflected. “Whereas that often leads to rework, bad information, and making bad decisions based on incomplete information.”
This is, of course, the same thing we’ve seen from the brand and strategy side. The impulse to act on gut instinct feels like an accelerant. But the results don’t build the brand, or the company – they just enable you to lurch along, never building the system that scales.
On the other hand, companies that understand they need a system accept they need to slow down in order to speed up. That includes building systems that make the budget and the strategy speak to each other, replacing key-person knowledge with documented processes, creating information flows independent of the founder.
As Jeffrey put it, something surprising happens when companies chart this course. The conversations get better. People start working together differently. Creativity appears in places it wasn’t before. The potential that was always there, finally has somewhere to go.
Want to watch the full episode? Find it on YouTube and Spotify.
Frequently Asked Questions
Where do “your numbers lie” most often?
It doesn’t mean the data is wrong. It means the frame around it is. Most financial reporting in founder-led companies is built to track what happened last quarter, not to surface where the growth thesis is breaking down. You get accurate numbers answering the wrong questions, which is a more dangerous problem than bad data.
What is strategic finance and how is it different from regular finance?
Regular finance counts things. Strategic finance connects things. A strategic finance function doesn’t just produce variance reports; it actively moves information across the organization, linking the budget to the strategy, surfacing misalignment between what leadership believes and what the business is actually doing. Most founder-led companies don’t have one. That gap is often where growth stalls.
What is key person risk and why do investors care about it?
Key person risk is what happens when critical knowledge – how the company operates, how decisions get made, how customers get served – lives inside one person’s head rather than inside documented systems. Investors and acquirers find it in due diligence and it kills deals. The fix isn’t replacing the founder. It’s building processes that work independent of any single person.
Why do strategy and budget so often fail to connect in founder-led companies?
Because they’re built in different rooms by different people at different times. Strategy is outward-looking and aspirational. Budgeting defaults to last year’s numbers plus a growth percentage. Nobody is officially responsible for making the two documents talk to each other, which means resources routinely flow toward things that made sense in a previous chapter of the company’s story.
When should a founder bring in outside help to fix organizational alignment?
The signals are consistent: projects that keep getting de-scoped or running over budget, growth that has stalled despite clear market demand, C-suite members operating from different pictures of what “success” looks like, and a budgeting process that feels disconnected from the strategic plan. Any one of these is worth paying attention to. All of them together means the problem is already downstream of where it started.