Meeting the Challenge of an Executive Fleet
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While executive fleets share many of the same characteristics as their non-executive counterparts, they also present some unique challenges.
The vehicles often are part of an executive’s compensation package and don’t necessarily reflect the models in the fleet.
This means fleet managers may be in a situation where they have to handle care for a vehicle that may be markedly different than the rest for the fleet’s needs as well as take into account a driver who expects and can demand a higher level of service.
These are only some of the challenges facing fleet managers when dealing with an executive and his or her vehicle. The good news is that there are strategies that fleet managers can follow to overcome any of these challenges and make the program both run efficiently and keep the executive satisfied at the same time.
Getting time with a busy executive and his or her team is a challenge fleet managers will likely experience no matter the industry or size of the company.
“Meeting the needs of an executive team with varying schedules takes the efforts and coordination with not only the executive but admins, dealers, and vendors as well,” said Adam Orth, CAFM, fleet services manager for General Mills, who oversees an executive fleet of 110 vehicles.
Christy Coyte Meyer, director of Global Fleet for Johnson Controls, echoed Orth.
“My biggest challenge has been administration and the amount of time that has to be spent when an executive has a problem,” she said.
Another issue is one fleets struggle with across the board: vehicle costs.
“Average price of executive-level vehicles is going up,” said one fleet manager who asked to remain anonymous. “Management does not want to change the allowance offered, so drivers cannot obtain the same vehicle they might have had previously.”
Orth noted that maintenance costs can be a challenge for some of these vehicles.
“Another challenge is utilizing fleet management company discounts and process for executive-level cars,” he said. “Many dealers have become accustomed to having expenses for these vehicles taken care of via a credit or corporate card. We continue to work with our dealerships to enforce the importance of our maintenance program and its critical aspect of payment and tracking.”
Overcoming these challenges has required different strategies from each of these fleet managers.
Orth of General Mills said that he’s overcome the challenges faced by his fleet by building a “great team,” but, more important, by building consistency into the executive fleet program.
“Our executives know the process, what to expect, and they appreciate the services we provide. The coordination by my team and their availability is critical to its success,” he said.
Consistency has reaped a number of benefits for General Mills and its executive drivers.
“We utilize certain service advisors at the particular dealerships we use,” Orth said. “Not only does this benefit us from a time and priority standpoint, but it contributes to the overall consistency of the program. Another best practice is to have a good team that keeps the vehicles on their proper schedules, and most of all, is comfortable following up and escalating items.”
Coyte Meyer of Johnson Controls said that one of the ways that she has eliminated the challenges surrounding administration of the program has been to outsource it to the company’s fleet management company (FMC).
“By doing that, the administration has been almost eliminated,” she said.
One of the ways that Coyte Meyer has also kept the executive fleet program’s 183 vehicles operating efficiently has been by having a strong, well-defined fleet policy that has the support of senior leadership and backs her up if an executive has violated the policy, such as not paying a parking ticket.
“We have a firm policy and a strict policy for seeking exceptions to it,” she said.
Fleet managers also have to be prepared to be advocates for the executive drivers and be there to help them, particularly, is there has been some push back about pricing and adjustments to the vehicle selection has to be made.
“I try to guide them to the vehicle that would best fit their personal needs at the best overall price,” said the anonymous fleet manager.
Avoiding challenges with consistent service and clear guidelines and expectations is the best policy, but there are times when difficult situations do arise. What should the fleet manager do in this situation?
“Be honest and straightforward when delivering difficult news,” the anonymous fleet manager advised. “For example, non-compliance situations are touchy as are negligence. Over the years I have been forced to charge drivers for blown engines as a result of driver negligence. Senior leadership needs to have your back, and you need to simply present the facts. It is important to let executives know you are responsible for effectively managing these assets and enforcing policy.”
This fleet manager echoed both Orth and Coyte Meyer by advising that fleet managers should be consistent and not allow exceptions.
“Our executives are required to adhere to all the same policies and procedures of the rest of our fleet drivers. Executives are not exempt and this is fully supported by senior management. The only difference is their allowance,” said the anonymous fleet manager.
That being said, Orth noted that the best piece of advice he ever received about managing the executive fleet program also highlights the fundamental difference between rank-and-file driver programs and executive ones.
“The best advice I’ve received is to make sure to go the extra mile with an executive fleet. Going the extra mile is something we pride ourselves on at General Mills and I find it to be an essential part of a very hands-on program,” he said.
Photo of luxury sub-brand Genesis G90 sedan courtesy of Hyundai.
Being hands on is a fundamental facet of the General Mills executive fleet program.
“We have a white glove executive program,” Orth of General Mills explained. “Our executives play very critical roles within our organization. It is my goal and the goal of our program to make sure they have everything taken care of from a fleet vehicle standpoint. Whether it is fuel, washes, preventive maintenance, or swapping out snow tires, these items are taken care of while the executive is in the office. In our program, all of these items and their coordination are taken care of by my team. The executive parks his or her car in the morning and returns to it at night with nothing to worry about.”
General Mills does not have a selector list for its executive program.
Johnson Controls selector is also fluid, but informed by the fleet policy. There are several levels for the executive fleet program depending on the executive’s level in the leadership hierarchy, which defines the type of vehicle he or she can choose, as Coyte Meyer explained.
“It works differently at each level. In the first level, we have a strict selector — choose a sedan or small SUV and color, no driver paid options (DPOs). In the next level, there is a broad range — about 10 or so models — with no change in the vehicle type, and DPOs are allowed. The third level is freedom of choice, but the vehicle must meet three criteria: mpg minimum; max cap cost, and max monthly TCO. The highest level is freedom of choice with a cap cost. DPOs are also allowed,” she said.
For some fleets, the FMC plays an important role.
“Our program is somewhat unique,” said the anonymous fleet manager. “We have an allowance limit for each level. All vehicles are leased through our FMC, and drivers must adhere to specific policies — mpg limits, no manual transmissions, no convertibles, four doors only, etc.”
This executive fleet has about 250 executive vehicles, and no selector list, but a list of vehicles that fall into the company’s price ranges.
The company also has ways to simplify the process for the executive.
“The company also covers destination, mark ups, doc fees, etc. — it is part of their compensation package and is a good value,” the anonymous fleet manager explained.
Photo of Jaguar's 2017 XE 3 Series fighter by Paul Clinton.
As with any fleet program, executive fleets are under regular scrutiny by fleet managers and company leadership to measure its value to the company. Some companies have even gone so far as to eliminate its executive fleet programs and move to a straight reimbursement program.
Reimbursement, which may be the best option for some companies, can also come with its own set of challenges.
“From our recent review of this, there are two choices: a reimbursement through payroll or a reimbursement through a FAVR program,” said Coyte Meyer of Johnson Controls. “The latter is complex and additional work/admin on the driver, but is fair and defensible. Reimbursement through payroll is taxable and therefore the net reimbursement is not as high.”
While reimbursement certainly has some advantages, there are benefits for companies and company leadership to keep executive fleets in place as some fleets have discovered.
“Every two to four years management reviews our program — the due diligence is healthy. Each time a comprehensive evaluation is performed and the result has been to maintain our program,” said the anonymous fleet manager. “I am not privy to the details of why we keep our program, but conclude that, because it is well-run, fair, and provides drivers with internal fleet department support as well as the support of our FMC programs, it is deemed as a valuable and worthy program.”
Orth of General Mills sees the benefits of the executive fleet program extending far beyond fleet to help the general health and well-being of the company.
“At General Mills we pride ourselves on recruiting and hiring top talent. Our executive program is a great way to obtain and maintain an executive team that is critical to the growth, development, and future of our company,” he said. “Executives that join the program quickly realize that General Mills is an excellent company that cares about its employees. I believe that, as companies look at eliminating their formal executive fleet programs, they need to look at the entire picture. Are you eliminating cost, or are you eliminating talent?”