Managing the Financial Side of Commercial Fleets

10 Mistakes When Managing Executive Fleets and How to Avoid Them

Like it or not, executive fleets are different from the rest of the fleet population, since senior decision makers receive vehicles as part of their compensation packages. Fleet managers need to handle these vehicles with kid gloves.

May 2012, by Staff

There are a number of different missions that company-provided vehicles must achieve. Some carry people, others carry products, some provide service to customers, while others deliver products to them.

Then, there are executive vehicles, those provided to the most senior managers in the company. The C-level — CEO, CFO, COO — as well as senior vice presidents are often provided vehicles as part of their compensation packages, which are designed to attract and retain the most talented managers.

Managing an executive fleet is, like it or not, different from managing a sales or service fleet. The level of responsibility senior executives have is far higher, their time is dearer and more expensive, and the vehicles they are provided (or should be provided) all demand a level of attention that outweighs that of a sales or service rep. Here are 10 mistakes fleet managers often make when managing executive fleets:

1. Guessing when Selecting Vehicles
It is fairly standard practice in managing a sales fleet to offer drivers a selection of several vehicles from which they can choose. There are good reasons for this, including driver morale, minimizing problems that may arise with a single model, and the ability to benchmark costs. There are usually several models within the vehicle type to choose from, and the selection process typically works well.

The same process is not as clear-cut when using a selector for executives.

Since the executive fleet’s mission is compensatory, practical considerations (passenger room, cargo space, and towing power) aren’t relevant. The value of the vehicle as compensation is the primary criteria.

The mistake many fleet managers make is not consulting with human resources to determine how a company vehicle fits into the proposed executive compensation package. Just hearing that a “company vehicle” is part of the package isn’t specific enough. Guessing wrong will often leave the company behind if the competition is offering a vehicle of greater value, thus offsetting the purpose of the program. A fleet manager can ensure that he or she is on the right track by simply asking, “What value should we place on the company vehicle for this position?”

2. Having a Lax Ordering Process
The new or replacement vehicle ordering process for most fleets is similarly standard. A driver is hired or the driver’s vehicle is due for replacement. He places his order with the fleet manager, who, in turn, orders the vehicle (with the driver choosing model, colors, and any sanctioned additional equipment) via the fleet supplier — a dealer or a lessor. It is all done primarily electronically, via e-mail or directly online. There is little direct interaction between the driver and the fleet department. Some six to eight weeks later, the new vehicle is drop-shipped to a delivering dealer, where the driver picks it up and the old vehicle is dropped off to begin the resale process.

This works quite well with the bulk of the fleet: Vehicle choices are limited, equipment is standardized, and the process is routine. It doesn’t work well when executive vehicles are involved.

Some fleet managers make the mistake of using the same, or nearly the same, process when ordering executive vehicles. Doing so can create a number of problems. First, as is always the case, a senior executive’s time is dear; schedules are full, with weightier matters crowding out taking the time to choose a vehicle. How this should be handled depends somewhat on the makeup of the executive fleet:

■ Some companies only provide compensatory vehicles at the highest level: the C-level, the president, and a handful of very senior vice presidents. In such cases, a fleet manager is wise to take time to either meet or speak directly with the executive, provide vehicle information (equipment, colors, etc.), and, in general, walk him or her through the ordering process.

■ Even if vehicles are provided on a wider scale — regular VP and/or director levels — and time constraints do not permit the above, it is still wise to make certain executives know their options, and that fleet managers minimize the possibility of errors.

The bottom line, of course, is that it will be the fleet manager who will bear the brunt of executive ire if a vehicle comes in with the wrong color, wrong equipment, or some other “mistake.”

3. Not Being Hands-on at Delivery
Another mistake some fleet managers make is in the delivery of a new executive vehicle. The normal fleet process will have the driver notified that the vehicle is in, and it is the driver who is responsible to go to the dealer, “walk around” the vehicle to make certain that all is as it should be, and take delivery of the new vehicle. This process is adequate for a large, geographically dispersed fleet, but it is a mistake to do the same with executives.

Customizing the delivery process for executives is a smart move. First and foremost, fleet managers should meet with a local dealer to negotiate such a custom process for the delivery of executive vehicles. Ideally, the process should proceed as follows:
■ The fleet manager is notified directly that the vehicle is in.
■ He or she then contacts the executive to determine the best time for the delivery to take place.
■ The dealer is asked to deliver the vehicle to the executive (rather than vice versa), preferably at the office, where the fleet manager can participate.
■ The dealer representative, the fleet manager, and the executive then inspect the vehicle to make sure what was delivered is exactly what was ordered.
■ The dealer should then walk the executive through the features of the vehicle: how to open the fuel cap, how the sound system works, how to set up Bluetooth (if so equipped), how to use the GPS system, etc., addressing questions as they occur.

Only then would the vehicle delivery be complete; the dealer rep should provide his card, as well as the service manager’s.

4. Ignoring the Local Dealer
Even if the vehicle is leased via a fleet supplier, fleet managers often make the mistake of neglecting to develop and foster a good relationship with the local dealer. This is a critical element in managing an executive fleet.

Sometimes, this can be challenging. After all, if the vehicle is factory-ordered, that local dealer isn’t getting a sale; it is merely handling a drop-ship and delivery. But, most dealers, especially those for high-line and luxury vehicles, understand that if they provide excellent service to an executive for a company vehicle, they may well get a sale for a personal one, and also the advantage of word-of-mouth advertising. Local dealers can provide a number of “high-touch” services that shops in the company’s maintenance program network may not, including:
■ Pick up and delivery. When service is required, a local dealer can pick the vehicle up (at the executive’s home or office) and deliver it back when it is done.
■ Loaners. Some dealers provide loaner vehicles to drivers whose vehicles are in the shop.
■ Onsite service. Service can sometimes be performed onsite at the office or home of the executive

Whatever the “extras” may be, that local relationship is a critical part of a successful executive fleet program, and fleet managers who neglect to develop one are making a major mistake.

5. Not Being Available
Fleet managers generally have very full days. Time is a precious commodity, and getting home after a work day or looking forward to a weekend away from the office is a relief. Unfortunately, an executive fleet often demands more than that.

A fleet manager could take the position “look, I put in my work hours, I do a good job, but away from the office, my time is my own,” and be entirely justified. He or she can also get a less-than-pleasant phone call or e-mail from the CEO on Monday morning, after his or her company vehicle broke down Saturday afternoon, and didn’t know how to handle it.

It isn’t a bad idea to provide executives with cell phone numbers and home phone numbers, and tell them that if they need anything related to the vehicle to please call any time.

Is not doing so actually a “mistake”? The argument could be made that it is a stretch to believe that an executive would expect the fleet manager to be at his or her beck and call 24 hours a day. But, a fleet manager who is looking to keep issues to a minimum would do well to consider the possible consequences of not doing so when developing executive fleet processes.

6. Not Building Relationships with Executive Drivers
Considering that a true executive fleet (one that includes only the most senior managers in the company) will bring a fleet manager in contact with those with the ultimate decision-making authority, not leveraging that contact into relationships that may, at some point, help him or her to overcome a challenge or implement change would be a mistake.

At the C-level, nearly every aspect of the fleet manager’s responsibility can be impacted. From financial decisions to fleet policy to systems, leveraging executive fleet contacts can often make or break a fleet manager’s efforts to implement change. Such efforts, however, should be subtle, tactful, and ongoing.

Relationships with senior management should be developed over time. Obviously, a fleet manager who overtly suggests a quid pro quo to a senior executive when offering high-touch treatment risks not only being rebuffed, but his or her career as well. Initial contacts, whether by phone, e-mail, or in person should be strictly business: working with the executive on vehicle selection and ordering, or scheduling a service pickup. The fleet-related interaction will often evolve into a more comfortable, personal one. If the fleet manager does the job well, building trust, executives will be more likely to respond when asked to help on other matters. Failure to consciously foster both personal and professional relationships with executives, using the interaction arising from the executive fleet program, is a mistake that fleet managers will inevitably regret.

7. Not Following Up
Much of what occurs in the normal course of the day in a fleet department is routine. Orders flow in, authorizations for various activities are given, communications come in and go out, and a good fleet manager will have these and other processes down pat.

However, there is little routine about anything that occurs within an executive fleet program. This is not to say that everything that happens is somehow unique or unusual — a new-car order is a new-car order, a brake job is a brake job. But, when that order or that brake job is for an executive vehicle, a fleet manager had better treat it as anything but ordinary or routine.

The mistake fleet managers make is doing exactly that once the vehicle is ordered, the repair authorized, or the logistics of a maintenance pickup is accomplished, thinking that will be the end of his or her involvement.

Taking for granted that things will proceed smoothly can have serious consequences. The key here is follow up: request status reports or updates throughout the process. Don’t assume anything or assume that something will go wrong at every opportunity, and be prepared to address the problem as soon as it arises.

A fleet manager tells the story of being asked by the company president to have his company car moved from his home down to his summer residence on the east coast of Florida. The fleet manager asked when this needed to be done, and was told that he had several weeks to plan and move the car. The fleet manager contacted the drive-away company and, knowing he had time to spare, contracted for a “casual” move (that is, a move where the drive-away company places an advertisement in the local paper looking for a driver). Flash forward a few weeks, and the fleet manager receives a call from the state police in a state along the way, and is told the driver has been arrested, and the car impounded. The driver had several pounds of marijuana in the trunk, and was using the car to transport it to Florida.

The moral of the story: Don’t assume anything. If you think you have weeks to move the president’s car, do a “pro” move anyway. If you’ve placed a new-car order, follow up regularly to make certain the right equipment and colors are on the order. If you’ve scheduled the pickup of an executive’s car for service tomorrow, call today to confirm it. Once you’ve been given the responsibility, it won’t matter if someone else causes a problem.

8. Making Exceptions for Executives
Thus far, it seems as though fleet managers should be cutting a wide swath for executives as it pertains to fleet policy. Do fleet managers actually think they can send a letter of reprimand to a CFO for having a second chargeable accident or multiple moving violations? Surely a senior executive should be allowed to skate in deference to his or her position and authority, right?

Absolutely not. Too many fleet managers do just that, either out of fear or the mistaken belief that the most senior managers are above such mundane policy enforcement. This is a mistake for one or both of the following reasons:

■ Doing so can create serious resentment within the ranks of the regular fleet drivers, as well as their immediate supervisors. As with any other organization, those at the lower or middle levels must be confident that the rules and policies that apply to them will apply to those at the top.

■ More important, most senior executives are professionals, who know and understand that those rules and policies apply to them as well, and, further, that they must set an example for the rest of the company via their own behavior. The mere suggestion that they’ll be given special dispensation could actually be taken as an insult, and reflect negatively on the fleet manager who proposes it.

If a fleet policy has been properly implemented in the first place, this should not be an issue. Getting the CEO or president to “buy-in” to fleet policy, a fleet manager should make it clear that the only way the policy will be effective is if all drivers from sales to field managers to the C-level are subject to whatever consequences it contains, and that it will be applied consistently and equally at all levels. Carving out exceptions for executives is a serious misstep.

9. Not Documenting
It’s advice that can easily be applied to whatever a fleet manager does: Keeping good, complete records of all transactions and all communications is smart business, for a number of reasons. Take vehicle ordering, for example. After meeting (or otherwise communicating) with an executive to present vehicle options, pricing, ordering options, and placing the order with a supplier, it is smart to get an order confirmation, and similarly go through it carefully with the executive to confirm that what was ordered is what was desired.

This also is true for communications. It is not at all wrong to keep copies of telephone call notes, to print out e-mail exchanges, and otherwise document any and all contacts. Remember: The company’s most senior executives are busy, and have important responsibilities. It would not be unusual for them to forget that you did, indeed, follow up with a phone call or e-mail to confirm a maintenance appointment, or that a new vehicle has been delivered to the dealer. Not doing so can result in a “fleet-manager-said-executive-said” conflict that a fleet manager will inevitably lose.

Keep a file for each executive vehicle driver, and put all such documentation (whether formal, as in a printed e-mail exchange, or informal, as in notes taken during a telephone conversation) into the file. Never forget that, absent such documentation, if the executive said you didn’t call back, you didn’t call back, whether in reality you actually did.

10. Being a ‘Gopher’
When all is said and done, after all the caveats above about high-touch treatment, careful documentation and follow up, and respecting the authority and responsibilities of senior managers, fleet managers should do all they can to avoid becoming a “gopher” for executive drivers.

Although this sounds like it is in direct conflict with all of the previous admonitions, it isn’t. Taking the job of providing compensatory vehicles seriously and doing all one can to consider the immense demands on an executive’s time does not mean becoming a personal valet or a servant. It is rare that professional managers at the highest level will try to take such advantage of a subordinate, but it isn’t impossible. Sometimes, offering a personal cell phone number and 24-hour access is misinterpreted as an offer to do favors and run errands. This is a very difficult situation to handle.

A fleet manager is responsible for millions of dollars of company assets, millions more in costs, and the job performance and safety of hundreds or thousands of fellow employees. This is the fleet’s primary mission. Anything not related to this (and yes, that mission includes executive vehicles) detracts from time spent on serving driver-customers. An executive that asks a fleet manager to perform a personal errand is doing exactly that, and a fleet manager is well within his or her rights to refuse to do so, carefully, and explain that other responsibilities (either personal or professional) prevent him or her from doing so.

The best way to avoid this kind of awkward and volatile situation is to deal with it upfront. When first contact is made with an executive, and the offer of personalized service is made, make it crystal clear, in a friendly, professional manner, that the offer pertains only to matters directly related to the executive’s company-provided vehicle, and nothing more.

Most executives will fully understand, and the issue will seldom arise. If it does, a simple, “I’m sorry, I have a conference call this afternoon, and a meeting with our supplier after that,” can defuse the situation, and send the message. The mistake? Doing it once.

Executive fleets are an important responsibility for many fleet managers. Handled properly, the headaches associated with an executive fleet can be kept to a minimum, and the C-level drivers can remain happy and productive. FF

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