Market Trends

Why is the Fleet Manager the Last to Know?

March 27, 2013

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During the course of a year, I talk with hundreds of fleet managers and one common complaint is that they are often the last to know when significant corporate decisions are made that impact fleet operations. In these instances, fleet managers are not afforded the same consideration given to their counterparts managing the company’s core businesses.

For example, when there is a reduction in work force, invariably, the fleet manager finds out at the same time as the rank and file, despite the fact that vehicles may be needlessly ordered or retained. Or, how about the Fortune 100 CEO, who announced to shareholders that the company fleet will switch to an alternative fuel, but never told the fleet manager, who learned of the decision at the same time as shareholders. Similarly, many fleet managers learn, after the fact, that management issued a fleet-related RFP.

Another example of fleet’s isolation occurs with corporate acquisitions. Many fleet managers don’t learn of an acquisition until it is publicly announced, despite the fact that the acquired company may have an existing fleet requiring integration. The same is true for divestitures, which, if not handled correctly, leaves money on the table from a fleet perspective. When fleet is included in implementing a divestiture, it is often controlled by teams from legal and HR who have no understanding of fleet and whose lack of knowledge unnecessarily complicates what should be a straightforward process.

The lack of communication to fleet managers is not a new phenomenon. Since the dawn of our industry, there has been an ongoing disconnect between HR and fleet. When a driver is fired or quits, invariably, the fleet manager doesn’t find out until after the fact. Many times, this makes vehicle retrieval difficult and challenging. Fleet managers always struggle to get advance notice of driver terminations, both voluntary and involuntary. Advance knowledge of work force reductions avoids the needless expense of ordering unnecessary replacement vehicles and provides time to cost-effectively plan the remarketing of excess units.

Why Fleet Managers are Kept Out of the Loop

A key factor contributing to a fleet manager’s isolation is where the fleet department resides within the organization’s hierarchy. When fleet resides in sales operations, typically, communication is more frequent. These fleet managers know others in the sales organization and are more likely to be invited to meetings that may have an impact on fleet. However, this is often not the case for other fleet managers who report to procurement.

Sourcing groups are often single-focused on cost cutting and are not as concerned about total cost of ownership. At other companies, fleet may belong to a shared service group that typically resides outside the sales divisions. While the fleet department serves the different sales and service businesses within a company, it is not organizationally part of any of them. By not being a part of that “inner circle,” the fleet manager is not included in many initial discussions on potential decisions that may affect the fleet. Or, if the fleet manager is included, it is as an afterthought in the decision-making process.

This isolation is also exacerbated by the physical separation of the fleet office from field locations. Typically, the only time the fleet manager is contacted by a branch office is for a vehicle-related matter, such as a truck breaking down or having an invoice approved. At these companies, operational managers often do not feel the need to consult with fleet. They have a silo mentality that perceives the fleet manager as someone who only implements, but doesn’t influence policy. Similarly, they tend to view fleet as an expense, not an asset that needs adroit management. It takes time and effort to change this self-centered mindset.

Another factor contributing to fleet manager isolation is the size of the company. Larger companies, with many layers of management, take much longer to “cascade” information to lower management levels. This is especially the case when the corporate headquarters is located abroad.

When the HQ is in another country, important decisions, such as environmental strategies, are made without proper knowledge of what’s possible in the U.S. market. For instance, it is not uncommon for global fuel-efficiency goals to be established that are impossible to achieve in the U.S.

Importance of Building New Relationships

Every company is unique. Likewise, every fleet manager’s position differs. How much respect a fleet manager receives and the power he or she wields depends on the organizational culture and the mettle of the fleet manager. It is also influenced by the philosophy and personalities of top management. The reality is that most fleet managers aren’t high up in the corporate management hierarchy and must rely on their immediate management to properly represent fleet’s viewpoint.

One strategy to counteract exclusion is to expand and build new relationships within the company. Fleet managers must demonstrate value, on an ongoing basis, to their internal partners. One way is to proactively develop standard operating procedures (SOPs) to handle expansions, reductions, and other contingencies and to share them with senior managers. The problem with senior management’s perception of fleet is everyone thinks they are an expert based on their own “automotive” experiences. But, as we all know, you cannot cost-effectively operate a fleet based on personal experiences. Unfortunately, the best strategy may be to simply develop a thick skin and professionally deal with whatever comes your way. Let me know what you think.

mike.antich@bobit.com

Comments

  1. 1. Wendy [ March 29, 2013 @ 06:11AM ]

    Mike - this is spot on; have you been listening outside my office door?

  2. 2. Steve Kibler [ March 29, 2013 @ 07:17AM ]

    Mike, The timing of your articles sometimes makes me believe you're hiding in my office (like Wendy). Just three days ago, I read (for the first time in our City's "Sustainability Plan") that by 2020, 30% of the City's fleet will not rely on fossil fuel. This equates to approximately 140 vehicles powered by something other than petroleum based fuel, in the next 7-years. Achievable but I wish I had known of this promise a year ago. Fortunately, I'm already working in this direction - without knowing the goal. Like you say: the fleet manager is "the last to know..."

  3. 3. William Forsythe [ March 29, 2013 @ 09:59AM ]

    Mike, Great article as a reminder that we all be more proactive on expanding internal relationships. " Developing trust and proving value continuously is key. Not only does it keep you knowledgeable, when the time comes to implement a new process or strategy, you have already gained the trust of your peers. Next time a big sales meeting is going on make sure you find a way to attend. There is no better way to know the business units we serve than by looking from the inside. Listen, Participate and ask questions shows you support and are interested in supporting their business needs

  4. 4. Rachel Johnson [ April 01, 2013 @ 06:37AM ]

    Again, right on target! I will add SOPs to my targets for this year.

  5. 5. Phil Schreiber [ April 02, 2013 @ 08:17AM ]

    It took me a while to convinced people at HQ the importance of getting the information upfront. The fleet was a mess, and almost never updated. Now I am a memeber of the acquisition team. I get weekly information on all terminations, and all other information that can have an effect on the fleet. This allows me to have an early jump on vehicle acquisitions, or sales, and adjust the fleet to any increase or decrease of manpower. Management does not know the complexity of fleet management and the knowledge that is required to run a large multistate fleet. The article paint a sad story of complete misunderstanding of the responsibilities as well as the function of fleet managers.

  6. 6. Donna Bibbo [ April 05, 2013 @ 08:55AM ]

    Maybe it's because I report to HR or because I meet with people in the President's office on a regular basis, but I don't really have this problem. I pretty much know everything that is going on whether it affects Fleet & Travel or not. I consider myself to be very lucky in this aspect.

  7. 7. Rosalie Falato [ April 07, 2013 @ 03:12PM ]

    This one can effect the fleet manager from both sides of the fence. Although it is necessary to know where the fleet needs to be cut or orders need to be delayed, knowing who is going and when creates the need to be somewhat evasive with your drivers. I always had a good report with my drivers so knowing that one was about to be unemployed created the need to convince the driver that they should hold off on the order process.
    On the other hand I inherited a fleet that was soon to be down-sized with no knowledge of same. After the orders were placed and the vehicles arrived at the dealership we needed to tell the dealers NOT to deliver the vehicles. The drivers were calling the leasing company and the dealers to find out when they could get their new cars. The leasing company sometimes would indicate they had been delivered to the dealership. The dealership was under orders NOT to deliver the vehicle. The company was paying for the vehicle to sit on the dealer's lot which made no one happy. Shortly thereafter the game of musical cars began. Vehicles had to be shipped to different locations where orders had been delayed. The entire situation can be easily resolved with a better handle on order approval.
    The managers usually know which employees are slated for termination. Without their approval, the vehicle would not have been ordered. Let's get the onus off the fleet manager. We have no say in which sales rep does or does not continue with the company or eligibility for a new vehicle.

  8. 8. John Daigle [ June 06, 2013 @ 09:18AM ]

    This article is right to the mark !

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Author Bio

Mike Antich

Editor and Associate Publisher

Mike Antich has been covering the fleet management and vehicle remarketing markets for more than 20 years. During this period, Mike has written or edited more than 4,600 articles on the subjects of fleet management, manufacturer fleet activities, the fleet leasing industry, and vehicle remarketing. He was inducted in the Fleet Hall of Fame in 2010.

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