64. Finding Your Why as a CFO with Ashley Harlan - Part 1

Foreign.

CFOs. We're all looking for that alignment between what it is we do as CFOs, who it is we're doing it for, and most importantly, why we're doing it. And when we get those three things working together in concert, man, that's where we get another level of energy and aliveness and purpose. That's where we really get to that point. We got the swag and we're excited to come to work every day and serve on a whole new level. But how do you find that alignment? My name is Michael Keaton and welcome back to the CFO Report. Today is part one of a two part interview that I'm having with Ashley Harlan. Ashley is in my CFO mastermind, and I can tell you Ashley embodies that synergy between the what, the who and the why as well as anybody else I know. But how did she get there? Was it something that she just kind of woke up one day and said, I want to be a fractional CFO and this is how I'm going to do it and this is who I'm going to do it for? Or was there a bit of a rougher road? Was it more of a journey that took her a couple years? We're going to unpack exactly how she got to the point that she's at today. This is an amazing interview. If you're looking to figure out that alignment between the what, the who and the why, I want you to get out a pen and paper if you can. If you're driving, don't do that. But if you're at a place where you can sit down and take notes, this is a golden episode. I know it's going to serve you well. Let's check out part one of the interview with Ashley Harlan. I want to start by telling you how incredibly proud I am of the progress that you have made in your firm over the last year or so. It's been really inspiring.

Thanks. I mean, we have to toot your horn because I would not.

I was on the struggle bus before I joined the Mastermind. And so I have to attribute some of that success to your coaching in leadership, in challenge and poking holes in my ideas. So I'm very appreciative of the support.

My honor to do it. I love working with people like you because you take action. In fact, we'll dive into this a little bit later in the conversation. But I think that when I look at the hundreds now of fractional CFOs I've worked with, like the number one difference between those that stay stuck and those that succeed is the propensity for action. Like the people that are just willing to try things and do things and move forward. And you certainly, you certainly embody that. So it's, it's always exciting to work with you. But before we get into some of those things, how did you get started in this world? How did you even have the idea to start a CFO firm? And how did you get here?

Yeah, I would call myself an accidental cfo.

I don't know if anyone really branches out to be a fractional cfo, but ever since I was very young, I always just was attracted to understanding money, how money works. I was the kid in middle school that my parents drove me to Barnes and Noble and books a million and I was in the personal finance section reading like Susie Orman and Dave Ramsey and not the teen like love storybooks. So I always knew I wanted to do something, something in the financial services world. I wanted to advise people, talk to people about making money. And so I, I went down this path of desiring to be a financial planner. That was always the dream was to be a financial planner. And I built my career. I went to school for it. I worked in banking and wholesaling and financial planning and was studying to get my cfp. And then I was at a big insurance company when the pandemic hit. And I had a choice at that point in time, do I want to take my severance because we got laid off? So do I want to take severance and then go work for another insurance company or go into planning full time, or do I want to try to branch out on my own and see what happens with helping support business owners? Because I was doing that as a side hustle while I was working in insurance. And as things continue to progress, I decided to go the route of continue to help my business owners and do planning on the side. I did that for probably the first maybe six to nine months. I was a planner for a fintech company and I was running this business on the side. And I realized I really loved working with my business owners and talking to them about their cash flow and helping them get from point A to point B and how can we think about the growth of your business a lot more than I enjoyed talking about the nitty gritty details of, you know, investments in insurance and all of those things in the planning world. So kind of came to this crossroads of putting down this dream that I had for 20 plus years of being a financial planner and recognizing that that skillset transferred very well over to what we call a fractional CFO role, being strategic about how we grow businesses. And so that's how I kind of landed in this world, was that transfer from. I love helping people think about managing money and how to grow their money and not doing it for on the personal side, but helping business owners to be able to do it.

It's hard to let go the direction that we feel like we've had since, you know, a certain age and we go to school for it. When you were thinking about switching into the fractional CFO world, and what was it, 2019, 2020, around the time of the pandemic, did you have anybody around you either on the good side or the bad side, like, yes, go for it. Do the fractional CFO thing. Did you have people telling you it was a horrible idea and to. To stay the course and to stay in insurance or CFP world?

That's a great question. So at the fintech company, I was at my, like the head of financial plan and I built a really great relationship. And she knew all about, you know, me running the business as well. And she told me, she's like, I think you, you can really do well in that world. Like, your personality suits it. How you think about money and growing money really suits you in that world. And I was very conflicted because like you said, this has been the dream for a very long time to be a planner. I spent thousands of dollars on CFP prep. I was halfway through a couple more classes to take, and then I was going to be sitting for my exam. I was in a study group, right. So there was a lot of preparation to continue to plow down the CFP routes. But I think her encouragement, because she could see my work and she could see where my passion was, was very helpful. And then, you know, I have amazing parents who told me, like, we know this is what you wanted to do, but if you want to try out being, you know, a fractional cfo, and I didn't know that was the name of it at the time, had an accountant friend who I was telling them what I was doing. He said, you know, that's like CFO work. Oh, okay. His input and my parents kind of support and just my, what I call my personal board of directors, their support was just like, try it. If you fail at it, you've got your licenses, you can go back and finish your classes for the cfp. I'm licensed as a planner. I'm just not a practicing planner. So I can go get a planning job. So it's like, what do you have to lose?

You know, that's so awesome that you've got that support. I'm interested to hear more, though, about this personal board of directors.

Yeah, so I consider. My parents are my personal board of directors. My brother, interestingly enough, my brother is a CFO in corporate, which is, I mean, probably a unicorn out there, but he does that in his corporate world. So he's definitely on the board. My significant other, he is probably the emotional support of me, more so than anyone else, because he sees firsthand the highs and the lows and the stress of running a business and being a practitioner and all the things. And then I have two really good girlfriends that I would consider on my personal board of directors that are there to listen to me, vent and give me encouragement and really help me to stay the course and remember the first iteration of this business in the first place. They're there to help remind me of that.

What was the first iteration? What did it look like? You make the decision like, okay, today I'm going to be this new thing. What was V1 of the CFO journey like for you?

So of the CFO journey, I would probably take it before, like, way back when, I first had this idea that I wanted to help people managing their money. And I had is a very long name, but I had this business called Ms. Sister Nomics. So I mixed sister with economics and put Ms. In front of it. And I had a podcast, I had a newsletter at that time. And a lot of it was centered around talking to black and brown women, specifically about how to better manage their money. So it was a lot of financial literacy, like budgeting and insurance. And so I would go speak at churches and host workshops and give talks at the library, all about, you know, managing your personal finances for that specific group. And so it's just continued to grow and change and morph over time. But that was the starting point where I had terrible graphics and a name that no one could spell. But it was my start to where I am today.

So you got into it. It's changed a lot from V1 to V. You're probably at four or five now. You know, you've been.

Yeah, probably so about four or five. Yeah.

Can you walk us through what that journey was like? So you got started. You're in the libraries, you're at the churches talking about those things. How did that evolve into what it is today? What would you say, like, the key things that you learned or discovered along.

The Way were I would say, One thing that I've learned that is universal is that money is a lot more emotional and driven by behavior than it is by the dollars and the cents. I think once I started to see that trend in that pattern, it helped me to not necessarily separate out. Okay, now I'm helping people with personal finances. I'm helping people with business finances, because, as you know, when you're a business owner, the business serves two purposes. It has to float us in the business, and it's got to float us in the personal life. But so much of the decisions we make are based off of our values and our desires and whatever beliefs we have about money. And so throughout the journey, I've tried to focus more on how to understand behavior and habits of people and how they think about money. And then each kind of version was me up, leveling the technical skill set that I needed to be able to tell a more simplified version to whoever I was working with so they could take action. Right. So I define success like, if I can go through something with someone, whether it's cash flows or financial reports, do they understand it? Am I simple and concise in my explanation, and will they take action behind whatever it is that we're talking about? So I think if I wrap that into your question, it's been me more so understanding the skillset that I needed to build up to get people to take action more quickly. And each version has helped me to get better and better at that over time.

You said, I think it's really wise. Money is a lot more emotional than logical. I kind of summarize it that way. It's less about the. The dollars and the cents and, like, the mathematics of it. It's more emotional driven. What does that look like? If there's somebody that's just getting started, what are they gonna see in their clients that's like, oh, okay, I get it. It's not that they're making a bad decision necessarily. They're trying to do the wrong thing. They're just approaching this from an emotional perspective instead of a logical perspective. So what are the signs of that and how do you combat that or kind of get them to take the action that you know is going to be better serving for them?

Yeah. So what I think is really getting to understand and learn your client, because the more conversations you have with people and the more you understand, you talk about the goals, dreams, aspirations. Right. I really take my first meeting with people seriously to talk through what their vision is for the business and how they want to grow because I pick up nuggets on what's important to them and what they value. And then I try to take notes of, of those things. The more I'm working with someone, the more I can tell, like if I'm having a conversation with them about something in particular, if they get triggered right, maybe they start to get really defensive or maybe they start to really lean into what we're talking about. I'm trying to constantly make mental notes of those things because when they make a decision that I may not agree with, then I have to sometimes check myself to say, okay, they value this. And so I'm going to be beating a dead horse if I'm trying to get them to do something different in this particular area. But I may need to frame the story of what we need to do to get them to take action because I know it's not beneficial to them. Right. So it's really paying attention and understanding how they think and what's important to them. And sometimes shutting down my own bias or my own values. Right. And making it more about them. Listening, Right. It's kind of those soft skills, like the listening, the taking note, ask great questions has helped me to then kind of tailor how I will present a solution to them.

Yeah, I think that's so wise. A lot of times, so much less about the technical skills and the certifications and the reports, and it's more on the soft skills that are required to drive people take action. You know, like a better chart or KPI Rarely is the thing that inspires somebody to shift the way they think as a CEO or approach problems. One of the things that you said, Ashley, that really stuck out to me is you learned that you have to reframe how you tell the story. What does that mean?

So I'm gonna give you an example because I just got a slack message yesterday from a client who is running a successful business but also has a full time job. And I got just like, you're not gonna like this, but I quit my job this morning and I'm like, okay, all right. That was not a great idea in my mind. I have a meeting with her in two weeks. This is going to change everything, right? As you know, because she's going to have to pull more money out of the business and all of this stuff. So I had to stop myself because I know she values and she's very passionate about her business. So I'm having to think through when I had my meeting with her, okay, here are some truths, some hard truths that you have to be faced with now because you made this decision that you just woke up and decided to quit your job, but also is the CFO is her thinking partner. Right. How do we brainstorm? How do we come up with ways in which we can close this gap that you're now going to have so you can still keep the lights on. Right. So we got to have some hard truths and have some conversation around that. But also we need to look at the numbers and make very data driven decisions based off of your numbers now to see what we're going to do in the future. Because you can't go back and get your job. Right? So if I come into that conversation and I am putting on my values in my disappointment and saying, you shouldn't have quit your job and why did you do that and why didn't you tell me? Right. She's going to shut down. It's not going to be a very productive conversation. I'm thinking through right now, what is the outcome of that meeting? What do I want to know for sure as far as the plan when we come out that meeting? And so that's what I'll spend my time prepping for and figuring out how to build a financial story to help her see this is a consequence of your, your decision.

Like, literally, I'm like writing notes as you're saying all this because there's so much good information in there. Can we drill in on a couple of these things? I'm really interested to hear your thoughts. The first thing that you said that really stuck out Ashley is you had to confront her with these hard truths. And I know for a lot of times people in our industry, this was hard for me for a lot of years. It's awkward to bring the hard truths in front of our clients. And so I'm wondering, like, how did you kind of get the courage to confront her with it rather than just being like, yay, you quit your job. Let's all celebrate. How did you, like, kind of dig down? Was that hard for you? Or is that just something that comes natural based on your personality?

No, I'm very conflict avoidant.

I can be very straightforward and assertive. But for whatever reason, when it comes to conflict, you know, because I want people to like me. And I think it's a skill set that I'm building up. And I will say, I think working with you in particular has helped me to build that muscle of they are paying me for my perspective, they're paying me for my executive leadership. You talk about that a lot. My Executive leadership. And sometimes that leadership is me putting aside my fear or anxiety or whatever and just telling them what they need to hear and not telling them what they want to hear.

To me, in my journey, that's why we get paid. That's what separates the thousand dollar or two thousand dollar a month CFO from the ones that can charge 8, 9, 10 thousand dollars a month is because they trust that you're going to be that person that challenges them. And I love what you said, like conflict avoidant. Right. It feels icky, it feels awkward, like it stresses me. I don't want to get on the call like, but recognizing like I'm here for service and service calls for me to just have that hard conversation. I love that approach. Another thing that you said that I think is really important is you said that you kind of leaned in as a thinking partner. Right. So she's this client is in this situation where cash flows are changing from the business because she's got to keep the lights on in her life. And so that introduces challenges.

Yes.

And what I heard you say is you became a thinking partner with her and you took like this data driven approach to figuring it out. Where I see a lot of people kind of going sideways there is they take the burden on themselves as the CFO to figure out, I have to figure out how she's going to keep the lights on. But you said, no, I became a thinking partner with her. What is that about?

I think because I have taken on that burden before, that I recognize that I'm making it more about me in that instance and less about the client. So being intentional about setting the meeting up and sending the agenda. A lot of things that I've learned from being in the mastermind is, you know, sending the agenda, setting the expectation. We're going to have a brainstorming session to talk through, you know, what things need to look like in the next six, 12, 18 months. Right. Because you've had some major shifts in the business. And so setting that expectation ahead of time, setting it again in the meeting, and then setting the time aside for us to have the conversation. I'm asking questions, giving her space to answer, giving her some homework afterwards. Like we need, okay, these are your next steps. You need to think through X, Y, Z. And then we're going to circle back in and follow up on that in our next strategy meeting.

What kind of homework do you give a client that's counterintuitive for a lot of people. What is homework?

Oh, I love giving homework.

So I want to Know what kind of homework would you give and why do you love it? Why is that important?

So in her case in particular, because of the type of business she runs is a very seasonal business. So when I first heard that she quit her job, my instinct is like, okay, this is your busy season, so it feels like you've got more money. But the issue we're going to run into is when it gets cooler and now you're not in busy season anymore. So right now I need her to be thinking about when Q4 hits around September, October ish hits and we lose all of the income we're going to have over spring and summer. How are we going to close that gap? How are we going to make sure that we still have some consistent revenue coming in? Some homework for her would be to think through what offers are you going to have? Are we going after grant money? Are we trying to get. Because she does a lot of influencing and stuff. So are we going to try to close so many brand deals that you can work on during those periods? Periods of time and then how much money do we need to start setting aside in cash reserves during busy season, smooth things out? Right. So but I need her to be the person that's going to think through the marketing and the revenue streams and the brand deals and all of that. And I need her to come back to the table to me and say, okay, I need to get three brand deals. My brand deals on average are xyz. We're going to pitch for this. Right. I need her to have the marketing, the sales plan, the revenue generating services in her mind and then we can put them numbers to that.

So you didn't take that burden, that obligation on yourself to figure it out. You said, hey, look, we've got to figure out how to bridge this gap during slow season. You go tell me what it's going to be. And then your job then Ashley, was to kind of build that into the financial model.

Yeah. So when I typically we try to give a due date, we set up a task and click up like, you know, Ashley needs to know, you know, these things so she can put this into the projections. And so we know where we're trying to go. Because especially with a seasonal business, right. It's really tough because it goes back to behavior. Right. They feel great during busy season. It's like they forget this is like six months. And then in six months there's no more cash flow coming in from your main offer. And so I need her wheels to be turning and I need her to Be thinking in the future, which is our role. Right. I need her to be thinking in the future about how are we going to close this income gap, because in previous years, it wasn't as important for her in some ways because she had the cushion of a knockout, a 9 to 5. We don't have the cushion of a 9 to 5 anymore. So you got to be a lot more intentional about how we're going to close that gap.

Do you ever get pushback from clients when you tell them you have homework? Because I think a lot of people hear, like, you're telling your clients to go do work. Yeah, there's this mindset that, like, no, they're hiring us. We do the work. So when you give your clients work to do, what does that kind of result in? Is there positives to it? Are there any negatives to it?

I don't know if I ever really had anyone push back on the homework, but it probably has a lot to do with how I set up. I tell people like, you know, I was a previous financial planner and I did coaching. And so this is a partnership. We work together. You're an executive, I'm an executive. You're the CEO, though. Right. You make the decision. So I have to have your input. And sometimes that's going to require you to go do some work to bring that back to me so then I can put the financial data behind it and see does it make sense for us to do this. But, you know, we are partners, and I've had the situations where the CEO did not see me as their partner. And I, for my firm, I don't want clients like that. I don't want clients to tell us what to do. And, you know, you have to tell me to make all the decisions. I need them to have buy in and have ownership of their business as well, and understand that at the end of the day, it stops with them. Right. I can give all the recommendations in the world. They've got to execute on it. If they don't and if they don't care about it, we're never going to move the needle forward.

So smart. I find that homework increases engagement with the clients. The clients, we give them homework, they show up more prepared for the calls, they're more engaged, they're ready to do stuff. And I think the homework idea is genius. The last point that I want to pull out of that, because I told you what you said earlier, it was like, so dense with really good nuggets. I got goosebumps when you said this. Ashley, you Said I'm focused ahead of time on thinking about what the outcomes are that I want to have from the call. So you're like, intentionally before the call, before the CFO call your clients, you're already thinking like, these are the outcomes that I want to have at the end of the call. This, these are the truths that I want to exist. You walk me through, like, how do you think about that? How do you. What are those kind of outcomes? And how do you make sure that you're pushing forward to get those outcomes on the calls?

I didn't always do this, and I would feel like I'd have these meetings and we were just meeting to meet. I've been thinking through over time how to do a better job of. Towards the end of the meeting, after we get through all the financial financials and we have discussion, you know, can we set some objectives that we want to focus on for each quarter and then what those next steps need to be in order to hit those objectives? And we're always circling back to those. Towards the end of the meeting. It just kind of sets the tone that I'm going to walk away. That's how I set the homework. Right? We're going to walk away with the next steps. But, you know, I have a meeting coming up after we finish today. And as I was thinking about it, because my bookkeeper is going to be on there, and my client and someone from their team is going to be on there. That's a lot of people. It's going to be probably about five people on the call. What do we need to move the needle forward? Okay, we need to have an AP&AR process in place. Who's going to own what part of the process? So client is going to own this part. Bookkeeper is going to own this part. Clients, you know, assistant is going to own this part. Right. So I know that that's what I'm trying to accomplish from that meeting. I need to know what the process is going to be. I need to know who's going to own what and at what point those things are going to get done. Because I know that if I don't have that information, I can't do great projections. I can give the client, you know, the information they need. They're going to feel like I'm paying her and she's not really helping me because this is the bottleneck of the business right now. I don't know if that's quite answer what you. What you asked, but it's just, you know, what's getting us hung up. What am I feeling like is going to be a challenge? And where do I feel like the client may not be as happy with our services if we don't fix this thing Sometimes, which is in this case, you know, I'm trying to fix something that is just a process issue, but it can. It's bleeding into other things. So I know walking away from that meeting, we've got to be very clear on those processes and who owns what.

Really speaks to me, because I did that for a long time. Like, we show up, we have a meeting for the sake of having meetings.

It's like, I hate those.

I do, too, but.

But then you do it, right? Like, you hate being in the meeting, and then you wake up with it and you realize, oh, I'm running meetings.

Like, be the change you want to see in the world.

Right?

Be the change you want to see in meetings. If not, if not the world. All right, that's it for part one of this interview. Stay tuned next week for part two. As a fractional cfo, I can't wait to see you next week, my friends.