Interview: LeasePlan USA's CEO Discusses Changes
Photo of Schlesinger by Andy Lundin.
Jeff Schlesinger was named president and CEO of LeasePlan USA, a fleet management company headquartered in Alpharetta, Ga. Schlesinger succeeded Mike Pitcher, who retired as president and CEO at the end of 2016.
As LeasePlan USA’s new president and CEO, Schlesinger brings extensive experience in advising local and global clients on long-term fleet strategies, mergers and acquisitions, and project financing. Schlesinger joined LeasePlan as the company released strong annual results for 2016, marked by a 7% year-on-year increase in underlying net result.
Schlesinger is a 20-year veteran of GE Capital. The last eight of those years, Schlesinger was senior vice president and managing director at GE Capital Fleet Services, where he was responsible for global initiatives, strategic planning, and international joint ventures.
To learn more about his goals, AF interviewed Schlesinger at the recent NAFA conference in Tampa. Here are excerpts from our interview.
AF: Is LeasePlan USA for sale?
Schlesinger: LeasePlan USA is not for sale. When I was in Amsterdam with the chairman in early April, the first words out of his mouth were: “LeasePlan USA is not for sale.” He said it three or four times. In fact, we have developed a plan for LeasePlan USA through 2020 and beyond.
AF: Recently, there has been a company-wide transformation. What is the purpose of this transformation and where it will lead?
Schlesinger: The entire fleet management space is changing. Change normally means you walk out one day, then walk in the next day and things have changed. A transformation process is a smooth transition from one point to another.
For example, 10 years ago no one knew what a smartphone was. Now everyone is walking around 24/7 with them. Where is the fleet space going to be in five years? Where is it going to be in 10 years? If we wait until year four to worry about year five, it’s going to be a change. If we plan for year five now, it will be a smooth transformation. And this is what we’re planning for at LeasePlan.
AF: LeasePlan is also in a midst of a new rebranding campaign. The new tagline seems to summarize your business philosophy – “What’s Next?” With that in mind, what are your short- and long-term goals as president of LeasePlan USA?
Schlesinger: At the end of last year there were a lot of changes at the senior leadership level throughout LeasePlan. We’re in a better spot today than we were then in terms of our transformation. We have a new commercial leader on board and a new operations leader.
We are now in the process of hiring a transformation leader, who will focus on the short-term, as well as the long-term strategy. Once those strategies are in place, the process, timeline, and project management of each one of those initiatives will be measured and monitored on a monthly or quarterly basis.
AF: Let’s build upon your tagline “What’s Next?” Since LeasePlan is headquartered in Europe, mobility is a major initiative there. What’s next with mobility from the perspective of LeasePlan USA?
Schlesinger: Europe is a different market. The macroeconomics in Europe versus the United States, are much different. What’s next for LeasePlan USA? We confirmed internally that the core of our business model is international customers, which reinforces the answer that we are not for sale.
You can’t sell the largest part of the portfolio, which is in the U.S., and make that model work.
What’s next for the U.S. is to maintain the global initiative with our international customers and expand our reach to those in the 300- to 1,000-unit domestic customer base.
We are also examining how we will serve the entire mobility space that is coming to the forefront. Eight years ago, Uber didn’t exist, five years ago, Lyft didn’t. How does a fleet management company convert into a fleet mobility company and advise our customers on whether it is one-person-one-car model or whether there is another mobility solution? The mobility solutions we will bring to the U.S. will be different than the mobility solution in a European country.
AF: Your vision of becoming a fleet mobility company is very interesting. Could you elaborate further on that?
Schlesinger: LeasePlan entered into a pan-European partnership with Uber. We are the first and only fleet management company that has a relationship with a 21st century mobility company. In addition to our partnership in Europe, we’re looking to expand that partnership to other parts of the world.
We’re also looking at other forms of partnerships, not just with vendors in the fleet management space, but in the fleet mobility space. We can expect announcements over the next few months on other partnerships in different parts of the world. We are not only saying we’re going to be a fleet mobility company, we are entering into relationships that will transform us into a fleet mobility company.
It’s a new day at LeasePlan USA, and I’m excited to be a part of this family to lead this transformation.
AF: You said the core of the clients you’re targeting reinforces the importance of having a global footprint involving LeasePlan USA. Could you expand on that?
Schlesinger: We’re the only truly international fleet management company. Every other fleet management company relies on global partnerships; LeasePlan has a global footprint in 30 countries. We have boots on the ground, and those boots on the ground carry a LeasePlan business card.
AF: Getting back to your tagline of “What’s Next?” Let’s examine what’s next in terms of fleet management technology. What is your vision? How do you see fleet management technology evolving?
Schlesinger: As you know, I am heavily focused on safety. I envision offering a global safety program that our international customers can partner with us, along with an international fleet safety company.
AF: Would you see that capability being organically developed, or is it through a partnership or acquisition?
Schlesinger: I’m not looking at acquisitions unless one is too good not to move forward with. I’ve spent my entire career building strategic alliances and want to leverage the core competency at every part of the supply chain. I want to have the best-in-class in each one of those offerings.
AF: You believe innovation is going to be the catalyst driving this industry. Specifically, what types of innovations do you foresee as being the most promising in the area of fleet management?
Schlesinger: Innovation in fleet management will occur in products and services. We’re working on solutions that are better every day with safety and driver scorecards, such as OneScore, which we recently launched at NAFA. Scorecards can be expanded to include more inputs from telematics data to include fuel and odometer readings, as well as hard stops, and fast accelerations, giving the fleet manager an overview of what the driver is doing on a day-in and day-out basis.
I also believe additional innovations will be in safety, the capture of data, analysis of data, and providing insights to the fleet manager on driver performance.
Fleet managers can’t manage what they don’t know; so data is extremely important. The data is being captured by the car right now. It’s just a matter of synthesizing and presenting in a concise manner to change the drivers’ mindset toward telematics; it is not Big Brother.
AF: What do you see next in the area of sustainability initiatives?
Schlesinger: Sustainability in Europe and sustainability in the United States are very different. I had a discussion with several country managers in Europe and was asked how sustainability is viewed in the U.S. I had to say it’s behind compared to the laser-focus in Europe. Driving 15-mile-per-gallon cars in the U.S. is still an acceptable form of transportation. In Europe, it would be frowned upon.
In the next five years, certain cities in Europe will mandate that you can only drive an electric vehicle in the city center. Who would have thought that Oslo, Norway, would be the leading indicator of sustainability globally? They are far ahead of everybody. Can you imagine if New York City residents were told they couldn’t drive a vehicle into New York City starting in 2025 unless it’s an electric vehicle? There would be outrage. In Oslo that’s a great idea.
Five years ago, everyone wanted to move to diesel because it had great fuel economy and TCO (total cost of ownership). If you look at the carbon that’s coming out of a diesel car, it’s significantly higher than a gasoline internal combustion engine. Perceptions about certain fuels that were positive five years ago, may now have a different metric, which is not as good as we once thought.
AF: Is the forthcoming generational changeover in the fleet industry being factored into the transformation plans of LeasePlan?
Schlesinger: Yes. The other part of transformation is demographics, as millennials move into middle management positions. Millennials have a very different idea of the work/life balance, of what they want out of life, as well as the sharing economy.
In general, millennials are more interested in the quality of life versus quality of ownership; if they share an item as a co-op, it’s better. Fleet management companies need to understand there’s an entire age coming up — the millennial age — that we need to be adaptive to versus waiting to be reactive to it. It’s important the discussions on transformation include the different mindsets of those under 40 in addition to those over 40.
At LeasePlan, we’re not going to be reactive to it. We’re going to be proactive. I think that may separate us from some of the other fleet management companies.
We also know autonomous vehicles are over the horizon. It may not be until 2020 or 2022, depending on which article you’re reading. But if we wait until 2020 to react to it, it’s too late. It means modifying your mindset.
AF: Moving beyond LeasePlan and looking at the fleet industry as a whole, what other major trends are going to affect the industry in the coming years?
Schlesinger: There’s still cost pressure on many fleet managers. It’s incumbent upon the partnership between the customer and the fleet management company to jointly discuss better ways to become more efficient.
LeasePlan needs to become the most efficient fleet management company in the world to offer the best services for the best price so our customers meet their internal metrics. We need to show prospective clients that there is a better way to manage their fleets and LeasePlan is the better way.
What’s next is more efficiency, better services, better products, and a global view. LeasePlan wants to be proactive in what’s coming versus reactive to what’s here.
AF: How will you drive further efficiency in your business?
Schlesinger: Everything is open for discussion. Technology is very important for products and services. We’re asking the same thing of our vendors that our customers are asking of us. Can you squeeze a bit more efficiency out of what you’re delivering? We’re doing a product rationalization. Every product is under review. Do we have the right vendor? Do we have the right pricing? Can we do better and more cost effectively?
We want to make sure it’s the most efficient and that we’re aligned with the proper vendor, and, if not, let’s determine who is the proper partner and align with them.
AF: There are many potential industry disruptors on the horizon. How should the fleet industry prepare for these changes?
Schlesinger: I don’t view them as disruptors. I view them as opportunities. Any time there’s a transformation, that’s an opportunity for a company to do a better job and get ahead of the curve. I’ve spent my entire career with that philosophy of change, and I’m very comfortable with change and transformation. It gives you an opportunity to look at yourself and ask: Can we do better?
Anybody who scores themselves a 10 is missing the point that continuous process improvement is required in this environment. Every morning you should wake up and ask: What can I do better for the customer?
AF: Why did you take this opportunity to join LeasePlan? What attracted you to this position?
Schlesinger: When the opportunity came up, I met with Tex Gunning, the chairman. After an hour-and-a-half with Tex, I decided I wanted to work for him. He’s filled with energy. He’s filled with vision. The idea of transforming LeasePlan, a 54-year-old company, into the leader in the fleet mobility space was an opportunity I couldn’t turn down.
AF: What strengths do you bring to LeasePlan?
Schlesinger: You need to combine operational rigor with vision. By bringing a continuous improvement mindset to the LeasePlan model, it will result in great things going forward.
Being in the fleet space from the outside looking in, I bring a different perspective than someone who rose through LeasePlan with a singular view. I have a great leadership team, and we talk about what can we do to combine the two views. How can we think outside the box with a different way of looking at it? We have a lot of good conversations on what’s the best way to combine LeasePlan’s view, my view, and most importantly, the customer view.
AF: What closing message would you like to convey to fleet managers about your philosophy toward fleet and your vision of the future?
Schlesinger: LeasePlan USA is here for the long term. Every customer I’ve met gives great feedback. They love the team. They love the service. My vision is to have a conversation on processes we can do better.
My vision is to offer additional products and services that are outside the scope of the traditional fleet manager. That is where “What’s Next?” and “What does that mean to me?” will lead to productive dialogue.
As we move into adjacent spaces of the traditional fleet management, such as fleet mobility, it will be an exciting time to be associated with the most progressive fleet management company, LeasePlan.