Interdepartmental conflicts are common in the medical and IT industries, and at most companies between sales and operations. However, for many years, fleet existed as a realm of its own. Management in other departments often didn’t fully understand the nuances of fleet management other than they got a new vehicle every 36 months. Fleet managers of that era (not that long ago) were the “kings” and “queens” of their own realms. However, that reality is rapidly changing. Consider the following e-mail I received from a fleet manager.
“Fleet managers used to be in control. Now there is SO much visibility to our jobs – sourcing, legal, HR, finance, sales, service, EHS, and Green. You can no longer do anything without getting approvals or buy-in from every department, which means you spend so much time planning and playing games. Nothing ever gets done in a timely fashion anymore,” wrote the fleet manager who asked to remain anonymous.
This sentiment is echoed by many other fleet managers and fleet suppliers. This has been going on since the last decade brought on by three powerful corporate crosscurrents – safety, sourcing, and resource constraints – which have reached a confluence at fleet.
Safety is an Interdepartmental Focal Point
Fleet managers are under pressure to minimize preventable accidents. Often the company HR, legal, and risk management departments are driving these pressures. For instance, corporate risk management has become more influential in the types of vehicles added to fleet selectors. Another department with a growing influence on fleet safety is the Environment, Health & Safety (EHS) Department. It is responsible for employee safety issues elsewhere in the company, such as the factory floor and workstation ergonomics; why not fleet vehicles? EHS departments are extending their reach into fleet because company drivers are one of the largest sources of Workers’ Comp claims.
The entire decision-making process in accident preventability management has evolved from being fleet department focused to corporate committees. In general, participants on these committees include representatives from HR, legal, risk, sales, and operations. In the past year, one supplier watched an HR department go from totally disinterested in fleet safety to totally involved. The moment risk management realizes the lost dollars involved in preventable accidents is when they decide to get involved in fleet safety. For instance, one company changed its risk management priorities by assigning a senior vice president of operations, two levels above fleet, full responsibility for every driver on the road. Likewise, finance and legal departments see the fleet safety “problem” in terms of dollars. Money always draws attention, especially when cost increases reach an arbitrary “red flag” threshold.
In a litigious society that views corporations as deep-pocket ATMs, cross-functional involvement in minimizing preventable accidents and subsequent liability exposure appears to be the new norm, with fleet being one spoke in a multi-spoke endeavor.
Sourcing is Another Crosscurrent
The migration of large corporations to strategic sourcing has caused corporate procurement departments to become the engines of change in fleet management at Fortune 500 companies. The emergence of strategic sourcing in the 1990s has altered corporate purchasing and forced changes in fleet purchasing and the supplier selection process. Procurement departments are very influential in vendor selection, contract negotiations, service level agreements, and ongoing supplier management. Strategic sourcing initiatives re-examine the way a corporation conducts its business and are tasked to identify opportunities to consolidate purchasing volume to obtain reduced pricing from key supplier partners. Strategic sourcing initiatives are launched on several fronts to reduce costs in a number of “spend” categories, including fleet management.
In years past (pre-1990s), most fleet managers negotiated sourcing decisions and vendor contracts, which were then submitted for approval to senior management. This responsibility has been migrating to sourcing groups. At many companies, this responsibility is now under the purview of strategic sourcing fleet groups, which typically includes a cross-functional team, which brings the fleet manager together with representatives from other departments in the company. The presumed benefit of a cross-functional team is a more thorough examination of the fleet purchasing and supplier selection process from a wider range of interests and perspectives. However, strategic sourcing groups are often single-focused in their goal. Frequently, the single focus is cost cutting. Looking forward, strategic sourcing will be firmly entrenched in fleet procurement for many years to come, perhaps permanently.
Fleet Managers are Stretched Thin
The third crosscurrent is that many fleet managers have taken on greater responsibilities, albeit without an increase in staff. The day of the fleet manager handling only fleet is gradually becoming less the norm. Fleet managers who excel at their corporations have taken on diverse management responsibilities, but the downside is that the total amount of time they can devote to fleet has been reduced, sometime dramatically. Fleet managers say they no longer have enough hours in the day to keep track of everything in our industry as was done before.
Since the dawn of the fleet management profession, fleet managers have faced the dilemma of balancing the HR/driver requirements versus finance/accounting department requirements, which are often at odds with one another. However, in today’s environment, this balancing act has reached a crescendo as fleet managers struggle to balance these internal relationships (not easy) while meeting the demands of the corporation and keeping drivers happy.
Persuasively Articulating Your Convictions
Fleet managers have limited resources at their disposal and are stretched thin. This gives rise to other departments encroaching into areas that have traditionally been the domain of fleet. The notion of interdepartmental conflict is not new. In researching this article, I have located management studies conducted as far back as the 1950s discussing interdepartmental conflict and its resolution. Interdepartmental conflict can have a corrosive effect on how departments work with one another. Out of this departmental friction, negative stereotypes develop, as do efforts to downgrade the performance of the other party – with fleet often the target of these barbs. Unfortunately, some (not all) fleet managers don’t have as powerful a voice as other department managers, despite the fact that decisions are being made that will impact fleet operations. Fleet managers need to persuasively articulate their positions to senior management and have the courage to take a stand based on their convictions.
Let me know what you think.