The fleet industry’s big news in December 2022 was the finalization of the agreement to unite Lease Plan USA and WheelsDonlen. An integration of monumental scale that will merge three of the top six fleet management companies.
Automotive Fleet Editor Mike Antich sat down with Shlomo Crandus, CEO of WheelsDonlen LeasePlan, to explore the process of combining the three legacy companies.
AF: With this merger in mind, how do you take three companies, each with strong legacies, long histories and many long-term employees and combine them culturally? How do you go to market as a single company?
CRANDUS: It starts with having dedicated employees who are passionate about serving clients. As we looked at our three companies, we saw that we already follow four key principles that will guide us and shape us on our path forward.
The first principle is related to clients. Each of the three companies was obsessively, singularly focused on clients. I like to talk about it as being focused on client success because client success is about outcomes.
We are focused on delivering for our clients. All our companies are focused on acting with integrity and character, doing the right thing, being accountable for our decisions and our behaviors.
It means we all acknowledge to our clients that if we do something wrong, we'll fix it; we'll get it right. Each company sees that as an important principle to follow.
The three companies are focused on the company as a community, and the three communities coming together are friendly, productive, and high-performance oriented. We take care of our clients, and we also take care of each other. There’s a nice feeling in each of the companies.
Lastly, all the companies want to foster an environment in which we can innovate. And as you said, all three companies were leaders in the fleet space. We’re leaders because we brought different products and different thinking to the market. We’re so excited to do that together.
On the culture question. Astute question. One of the first things we’ve done was to create an analysis of our cultures. We’re acting in a very deliberate fashion to rally around our similarities.
AF: What are some of your similarities?
CRANDUS: Not surprisingly, all three companies are strongly client- and process-focused. We’re consistently polite and friendly as opposed to being argumentative. These are very strong cultural characteristics we can rally around.
What are our differences? I think we see opportunities in many of our differences. We communicate differently in the companies, and we try to be very explicit when we communicate with each other so we understand that, in some cases, we’re not disagreeing. We’re just used to communicating differently.
Another example of difference is that some of our companies are a little more incremental in their thinking, whereas others are a little more revolutionary in thinking. We have opportunities in some cases to be revolutionary and in other cases to take our time and proceed incrementally.
As I’ve said, we're being very deliberate. The process wasn’t easy. The teams had to get their heads around coming together because we’ve been competing for 40 years, since LeasePlan came to the U.S.
I’ve witnessed amazing leadership in all the companies: leaders have been willing to come together, work together, and present our merger to our employees in a unified manner. That has been a secret weapon.
Matt Dyer (former LeasePlan USA CEO) and Tom Callahan (former Donlen CEO) are my partners, and we all bring different thinking, different experiences. We come from different backgrounds. These two guys are super smart. They're strategic. They're passionate about serving clients. I'm so lucky to work with them also.
The most important element is our people, our differentiator. Our employees are dedicated, and they really care about serving clients.
They want to get the best answers and do things in the right way, both for our clients and for their coworkers. So I’m lucky. I feel honored and humbled to have these wonderful teams and wonderful clients that we serve.
AF: The fleet management industry is very collegial, which lends itself to these types of mergers, a key factor pointing toward your success. Concerning differences among the companies, such as incremental versus revolutionary changes, how do you create operational integration between three different companies? Do you take an incremental approach or do you take a revolutionary approach? How do you balance the two? For example, each of the three legacy companies offers different products delivered through different partners and processes. How do you integrate those and develop a joint strategy?
CRANDUS: Other people have done mergers before. So, part of what we need is a good process and good discipline. We have an integration management office working (IMO) on the merger between WheelsDonlen and LeasePlan. The IMO completed significant preparation and data gathering before the agreement closed. The teams have had great collaboration and open feedback before we ever got to closing.
We’ve leveraged our experience from last year when Wheels and Donlen came together and have been very open with our communication.
Our employees also have been really courageous about learning from each other. It’s not always easy when you bring competitors together, but the employees have been fantastic.
Generally, we are taking a measured approach – key to producing low disruption as we had when we brought Wheels and Donlen together.
Notice I say low disruption. I never say no disruption because our business changes and evolves continually. Our clients don’t want us to standstill, whether we were merging or not, regarding products. Each company has grown and developed independently across their mobility journeys. Our clients’ needs have always been the catalyst for all the companies to develop products.
We know clients will benefit from diverse thinking, processes, and products.
As we bring the companies together, we've been very respectful about identifying differences, explicitly looking at how we serve clients differently. Our focus is on enhancing our ability to serve clients as opposed to selecting a “right way.” Because we’re a larger company, the end answer is there will be multiple ways to do things because we need to meet multiple client needs.
We can move quickly in some areas. We can bring corporate functions together quickly. But we’ve been very careful and deliberate in client facing and operations and technology areas to ensure we understand exactly what we have and not disrupt our clients or our employees.
AF: Clients likewise have very strong relationships, loyalties, and affinity towards their legacy account management teams. Will there be changes among the account management teams?
CRANDUS: Let me say first that you are correct that our clients and account management teams have very close, productive relationships, and we do not want to disrupt that unless a client requests a change.
In some situations, clients want changes as we do this integration, and our employees are really focused on their primary mission of delivering value and success to clients.
Not only are we not changing account management teams, but we’re also careful not to change the way the account teams are managed until we understand it very well, especially between WheelsDonlen and LeasePlan. As I said, there's multiple ways to meet client needs, and it's likely we will use multiple strategies to manage the teams to support clients.
The bottom line is our focus is, has been, and always will remain on our clients. Our transition will be deliberate and thoughtful and will communicate with our clients and our employees.
AF: What platform will the combined organization use going forward?
CRANDUS: We have not decided on a combined platform for the three organizations. We continue working to unify WheelsDonlen technology through the Wheels platform.
We’re evaluating technology as well as future plans. We have a legacy LeasePlan and the legacy WheelsDonlen. When we step back you might not see this, but our clients will know all our technology was developed over time.
We've begun a project where we’re taking a more holistic view and examining client needs and business processes, along with our thoughts about future needs, both for the company and our clients.
Once we’ve defined all the needs and the direction that we want to go in, then we’ll look to marry that with our technology choices.
The goal of our integration effort is to use this heightened period of investment to evolve faster. All three organizations have incrementally invested in systems over time, and we’re in a period in which we have some extra people, ideas, and investment dollars we can use to evolve our technology more quickly.
I’m being really specific with the words and talking about evolution and revolution in this case, because our clients and our employees completely want us to change, but they want us to do it at a pace they they can come along with us. The goal here is for our change to be positive and beneficial to both our clients and our employees.
We’re pretty much the market leader with many of our capabilities, and the goal here is to improve what we provide clients. This means that as we look at technology, we want to be more scalable, more configurable; we want to use modern tools to analyze the rich data we have. The one thing we want to change is we want to do it a little faster and get it to our companies and our clients quickly.
AF: WheelsDonlen has always had a strong global presence, dealing with many multinational companies. You’ve partnered with another major fleet management company, ALD Automotive. But now the new entity, the legacy company LeasePlan USA, brings a whole new element. How do you envision structuring the global integration in the newly combined company, and will you continue to engage ALD Automotive?
CRANDUS: In the short term, the WheelsDonlen business will serve global clients through our existing global alliance with ALD. Our LeasePlan business will serve global clients through a cooperation agreement with LeasePlan Corporation.
A comment on LeasePlan: It is the company that really brought global to North America back in 1983. They pressed the rest of us to figure out how we take care of clients who needed fleet services around the world. We can thank LeasePlan as a competitor in the old days for making us better.
Regarding ALD: we have a great relationship with ALD at the senior level, the mid-levels and down in the trenches where the people really get a lot of the work done.
One combination with LeasePlan USA will make the relationship even stronger and more collaborative for clients after ALD completes its acquisition of LeasePlan Corporation. We believe that will occur in the first quarter 2023, when their acquisition is done. As part of their integration management effort, we will join up to determine the best way to serve our then-combined clients who will be in 60 different countries, and we'll together manage more than 4 million vehicles worldwide.