Managing the Financial Side of Commercial Fleets

'Training' the Boss: Dealing with Organizational Change

It is no longer unusual for a fleet manager to see the fleet function move from one area of the company to another, and each organizational shift brings a new boss with different priorities. Here's how to deal with such changes.

July 2009, by Staff

Last year, it was Sales and Marketing. Last month, it was changed to Sourcing. Next July, it might be Sales Administration. Changes in corporate structure involving fleet seem to be happening more and more often today, and these changes bring new priorities, new focus, and a new supervisor.

How does a fleet manager cope with what can be dramatic changes in priorities, focus, or expectations? Educating the boss in the importance and focus of fleet management is a critical step in securing the resources a fleet manager needs and in keeping a career path on the straight and narrow. The following tips can be used to avoid confusion and make certain the boss recognizes the value of a fleet manager's responsibilities.

On Which Side Is Fleet?

Initially, it is important to know and understand on which side of the company a fleet resides. Nearly every company operates with two overarching sides: revenue and cost.

The revenue side consists primarily of sales and marketing, though it can include production, product development, and other disciplines. The mission of revenue producers is to push as much product out the door as possible, presented in the best manner possible. It also includes new-product development and can also cover human resources.

The cost side covers just about every other organizational function. Administration, finance, treasury, operations, and sourcing/procurement are some key areas on a company's cost side. The primary responsibility of these functions is tracking and managing cost. Clearly, the two missions can easily conflict, and understanding possible opposing goals and activities can help a fleet manager cope.

Fleet Involves Cost and Revenue

Operating a fleet of company vehicles is technically a cost: no direct revenues can be attributed to providing vehicles to employees. Fleet, however, can also fall under the revenue umbrella.

The cost aspects of fleet are legion; a fleet of 500 vehicles can carry a total budget of $6 million or more, with additional costs such as fees for fleet management programs and departmental costs. When a fleet is primarily used for service or delivery, it is almost a business necessity. Requiring service or delivery employees to drive their own vehicles is not practical, particularly when their job requires vehicle upfitting or other specialties. At that level of expense, the focus is on cost tracking and containment.

But fleet can have a revenue component as well. Providing a high level of customer service can require dependable vehicles configured to do the job efficiently. While putting a revenue number on such qualities is difficult, management whose responsibilities include service and sales recognize the value.

Revenue-Side Priorities Differ

We can begin on the revenue side of the company. A fleet that reports to sales, service, marketing, or even production, all areas for which the primary focus can be revenue, faces priorities that differ dramatically from the cost-based functions in the company:

  • Driver comfort/satisfaction.
  • Vehicle configuration/specification (with a focus on making vehicles easier and more efficient for drivers to operate).
  • Company image.

Not that cost is ignored here. Certainly the sales department, for example, operates on a budget and is as pressed for cost containment as any other function. But its mission within the company is to sell, and sales likely views fleet as a tool to facilitate the sales process.

How might the revenue priorities manifest themselves in a relationship between, for example, a VP of sales and a fleet manager?  Here are the positive aspects:

  • Driver comfort and satisfaction are important. The fleet manager will be expected to engage the sales group in choosing vehicles and equipment.
  • Company image also is in play; the head of the sales group will want vehicles that reflect the quality of company products and service.
  • The result is that vehicles more likely will be well maintained and replaced on cycle.

What fleet manager wouldn't like well-maintained vehicles, models, and equipment erring on the upside, replaced according to schedule? Here are the negatives:

  • If drivers are sales or service staff, and the fleet manager reports to sales or service, he or she may find "circled wagons" when policy issues arise, and enforcing policy can be difficult.
  • Exceptions: tall drivers, those who don't like the vehicle selector, sales managers who want new vehicles - all manner of requests for policy exceptions occur, and it isn't a mystery whose side the boss will take.

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