Executive fleet — these two words elicit a number of reactions from fleet managers, most of them bad. It can be time-consuming, frustrating, and even frightening to have to deal with executives whose company vehicle is a treasured perk.
That said, there are mistakes that fleet managers make that can make a difficult task even harder. Here are some of them, along with simple solutions that can help make the job easier.
1. Using a Selector
Now, this isn’t necessarily a fleet manager mistake; however, when the fleet manager is the deciding factor in developing executive vehicle policy, a selector isn’t the best way to go.
Most true executive fleet vehicles are provided as part of a compensation package. For that reason, the vehicles are nearly always intensely personal to the driver; giving them a choice that the company (fleet manager) has developed can lead to the built-in biases that nearly all of us have regarding the cars we drive. The higher up in management you go, the more likely it is that there will be dissatisfaction with the choices provided in the selector.
The solution is a simple one: Use a monthly dollar stipend, or set a total vehicle cost level, and permit the executives to choose any vehicle that falls within the limits set in the policy.
2. Accepting Existing Policy
Along similar lines, many fleet managers simply accept the executive vehicle policy that is already in place. That policy may include the aforementioned selector, or dollar limits — perhaps even the provision of a single model for all executives. The problems that can arise are the same ones noted previously, and can make it difficult for the fleet manager to carry out the policy.
Avoiding this mistake is a matter of learning where the policy was originally set. It may have been a previous fleet manager, or human resources, and/or other company disciplines involved in setting compensation levels. If there is an issue with the policy, carefully note it, and develop a solution. Bring that solution to the above stakeholders — human resources, and perhaps even the legal department — and make the case for whatever changes are needed. Doing so will not only create a newer, more workable policy, but also help the fleet manager avoid conflicts the old policy may be creating.
3. Applying Regular Policy
This can be a tricky one. Standard fleet policy normally covers vehicles provided strictly as business tools, and on a much wider scale — both in numbers and in geography — than true executive vehicles. Requiring drivers to use maintenance management programs, for example, where preventive maintenance and regular repairs are usually funneled to national account providers, is generally not a good idea when applied to executive cars. Why? Executives who choose high line, luxury imports, for example, won’t be as
comfortable bringing the cars to a local tire retailer who is in the national shop network of the company’s fleet management company (FMC) maintenance program.
On the surface, one part of the solution is relatively simple: Find a local dealer and set up an agreement for them to provide service, service loaners, and pick-up/drop-off service for the company executives. Whatever makes and models the executives choose, a local dealer will generally be happy to help.
What can be a more touchy part of the solution is explaining to senior executives that, for some parts of standard fleet policy, you will be exempting them, and setting up these local relationships. Some executives won’t mind that at all — some, indeed, may be expecting it — but others, particularly at the “C” level, may not be quite as accepting, and may even insist that they not have any special policy carved out for them. However, explaining to them that the higher responsibilities they carry make their time more valuable to the company, and keep them mobile, is one of the fleet manager’s key responsibilities. It will make that part of the job more productive and efficient if the executives agree to this kind of “high touch” handling.
4. Not Applying Regular Policy
There are, however, other parts of fleet policy that fleet managers sometimes are unwilling to apply to their executive fleet drivers that should be. This happens primarily in the area of safety and accident review. Many, if not most, fleets have a policy surrounding the provision of fleet vehicles, MVR performance, and accident chargeability, along with the consequences of violating the policy. Most companies with an executive fleet have drivers whose driving records aren’t in line with policy, who have multiple chargeable accidents, or who even refuse to submit to the consequences of such policy violations. A regular fleet driver, for example, might be in jeopardy of losing company car privileges — or at least personal use privileges — if they incur certain serious moving violations (speeding, reckless driving, DUI, etc.).
The solution to this is not an easy one, either. The first step is, again, to carefully make the case for the application of the safety and accident review policy for all executives. Why the exemption, for example, from the standard maintenance management program, but not for safety? From a legal and financial standpoint, the company is at greater risk when senior executives create safety issues, or have chargeable accidents, than when a regular fleet driver does the same. A service employee driving a van changes lanes without signaling and hits the car in the next lane? Happens every day, and the claim is usually settled quickly by both parties. The CFO does the same, and it’s all over the news, the Internet, and the media, and the adverse party sees very deep pockets for a lawsuit.
But, equally important is the example executives set for the rest of the fleet drivers by subjecting themselves to the very policy some or all of them have approved. Imagine the rumblings in the field when word gets around that the aforementioned CFO has had a third chargeable accident in less than two years, but is still driving a company vehicle. Make these arguments as high up in the company hierarchy as possible. The CEO or president will most likely agree.
5. Not Knowing the ‘Market’
The market for talented executives is extremely competitive. Companies spend a great deal of time and resources to find the highest level of executive talent — they pay recruiters, both internally and outsourced, to try to fill key senior positions. A major part of this market — as with most any labor market — is compensation. Salaries, bonuses, stock, and perks are all used to lure executives from one company to another.
An important part of executive compensation is often a company vehicle. Fleet managers don’t often spend much time surveying that market when assisting HR in setting executive fleet policy. Knowing what competitors for executive talent are providing should be the basis for doing so.
The answer is a simple one. HR recruiters are well versed in most areas of executive compensation; there are surveys available which can help fleet managers do the same. Various industry publications can be researched to help find the right vehicles for the right job. Fleet managers do this all the time — benchmarking their industry — to establish the regular fleet selector. Although executive selectors aren’t the best way to go, the types of vehicles, dollar values, and even makes and models can be found with some research.
6. Not Building Relationships
Relative to senior management, department heads, such as fleet managers, tend to be several levels of authority lower in the company hierarchy. Sometimes, fleet managers don’t make a serious attempt to contact, for example, the CEO or president in order to establish a relationship that will be helpful not only with executive fleet decisions and policy, but also with overall fleet policy.
Although their time and schedules are usually full, contacting senior managers’ administrative assistants or secretaries to request just a 15-minute or half-hour meeting is an excellent way to begin.
Remember: the executive vehicle is a treasured, very personal form of compensation. It may take a while to get time on the schedule, but it is the rare CEO who won’t agree to sit down and meet the manager who is responsible for that perk. Indeed, he or she most likely will be happy to talk about cars in general, and to meet. So, make that call, or send that e-mail, and get to know the senior managers. One more thing: don’t do so without a direct supervisor knowing about it, and why it’s being done. You don’t want to be perceived as not respecting the “chain of command.”
7. Not Acquiring Locally
Most, if not all, FMCs have ordering/purchasing agreements with luxury car makers, and it is tempting for a fleet manager to use those relationships when acquiring vehicles for corporate executives. The process is established, as is pricing, and doing so can help the acquisition process run smoothly.
But the fact of the matter is that a dealer selling a car will inevitably have a different view toward establishing the aforementioned local relationships for service compared to a dealer handling a courtesy delivery for a vehicle purchased elsewhere.
To help avoid this potential problem, get out in front of it. First, survey local dealers, which, even without a selector, will likely end up as executive vehicle choices. Add to those “domestic” OEMs, and communicate with them as soon as possible. Explain what kinds of relationships are being sought, and express the desire to have the company’s FMC acquire the vehicles from them. Be armed with FMC pricing, too, so that they know what both parties can expect. In most cases, it’ll be discovered that they will be agreeable to match — or come close to — pricing available now, and eager to develop a relationship with a large, local business.
Next, armed again with the information, approach the company’s FMC and explain what you’d like them to do. Again, you’ll find that they will be cooperative as well.
8. Neglecting a Disposal Process
When regular fleet sales or service employees, who have a company vehicle assigned to them, leave the company, fleet managers have a number of options available to deal with the remaining vehicle:
- Depending on time in service and mileage, the vehicle can be transferred to another driver whose own vehicle is nearing replacement.
- If the vehicle itself is nearing replacement criteria, it can be offered to the departing employee under an existing employee purchase policy.
- Lacking interest in that, it can be turned into the FMC for sale, provided the market will cover any unamortized balance.
- If there are any pool vehicle applications, surplus vehicles can be transferred to fill them.
Unfortunately, all of these options may not be readily available for vehicles left by departing executives. Being unprepared for such situations can be time consuming and leave money “on the table” when the vehicle is sold.
As with the disposal of any fleet vehicle, a written policy is the first step, and much of it will be at least similar to that for regular fleet vehicles:
- Offer the car to the departing executive for purchase.
- Offer the car to the local, purchasing dealer. High line luxury vehicles are usually in very high demand, and this option will usually be more lucrative than selling on an open wholesale market (wholesalers, auctions).
- Consider retailing the car directly. Place advertisements in appropriate publications, even set up a contingency sale via a local used car retailer.
However these transactions are handled, don’t get caught without a firm policy and step by step process.
9. Not Being ‘Hands On’ at Delivery
When the executive vehicle is ready for delivery, don’t leave it to the dealer only, or the FMC, to handle the process. Don’t follow the order-to-delivery process in the same manner as would be done for the dozens, if not hundreds, of vehicles ordered for the regular fleet. Most high line luxury dealers have thorough, high touch delivery processes in place; however, if the fleet manager isn’t directly involved, there is the risk of issues arising and problems occurring, and hearing about it after the fact.
First, if you are successful in setting up a local purchase for the vehicle, ask the dealer if it can arrange delivery on site — at the company’s offices. If the executive is coming out of an existing car, the dealer can pick it up and the resale process can begin.
Make certain that, whether the dealer agrees to an onsite delivery or not, you are present. Also make certain that the driver is given a thorough tutorial on all of the vehicle’s features and technology, from how to set up Bluetooth and use the GPS and other in-dash display technologies, down to very simple things such as which side houses the fuel door and how to open it, and how to open the hood and trunk. Make certain that extra keys are provided, an owner’s manual and all necessary paperwork are in the glove box, and the floor mats are installed. Get the delivering sales consultant’s business card, and make certain that the driver gets one as well.
10. Being Too Hands On, or an ‘Automotive Gopher’
Yes, fleet managers have to be hands on, need to be involved at a higher level than would an individual regular fleet driver, and need to get out in front of potential issues. But, too often, the fleet manager ends up being an executive’s “automotive gopher.” Most senior managers won’t go this route, but there is the occasional one that demands that the fleet manager manage his or her vehicle directly, before anything else. How many fleet managers have heard a senior executive demand that they fill the tank, or personally get the car washed?
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 manager’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 up front. 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.