By Shlomo Crandus, CEO Wheels-Donlen
If you never scan the fleet industry newsletters, check out blogs, or connect to social media, you could have possibly missed the Wheels-Donlen merger news last month. After all, the transaction was kept quiet until after it was completed and this was on purpose as we did not want to disrupt our clients or distract our employees. While it was big news, it was also seen as a merger of two well-respected organizations, each with a reputation for integrity. There was little shock factor to the announcement. It made sense.
There are typically many good reasons for mergers: to increase client base and market share; create diversification in product offerings; and build economies of scale. And, there are many reasons that mergers and acquisitions can hit bumps in the integration road; we’ve all read the business media accounts of some challenging ones. While many ingredients combine to create both successes and failures, according to the experts, one key risk factor can be the clash of two very different corporate cultures. As an integration risk, culture clashes can impact both operations and growth decisions and prevent the two organizations from fully coming together as one.
With that said, the Wheels Donlen merger has the culture hurdle covered and then some. I think it’s safe to say that the over-riding impression that pretty much everyone in this industry has of either company is that they possess the foundational assets for a true synergy—largely due to the extremely compatible corporate cultures. For both Donlen and Wheels, it’s clients first—everything starts with clients.
Beginning with cultures that are already aligned, clients of both companies can see that this is a marriage that actually makes sense. The merger is starting from a position of strength and building upward from there. While both organizations have origins as family-owned businesses with customer-first philosophies, each offers just enough of a difference to make the relationship compelling.
Complementary Differences—A Strategic Benefit
Most people in the industry would probably agree with me on the cultural similarities, but what about the differences? No two companies can be completely in tandem. Of course there are dissimilarities, but rather than dissonant contrasts they are complementary differences. Many of these will actually strengthen the new organization.
Heading the newly formed FMC with the perspective of 15 years on the Wheels side, the variances I see at Donlen have made a very positive first impression. For instance, one thing that I actually love about the Donlen culture is that there’s a passion for innovation and testing out of new ideas. The Donlen folks are willing to look at new products, new vendors, and do pilots much sooner than the Wheels side would. It’s just a different approach compared with how Wheels goes to market. There’s more spontaneity and that energy will be a huge benefit as we bring the companies together. Donlen has a very collaborative culture in addition to being open-minded and willing to experiment.
So, you might wonder that as a company with a culture of more methodical planning, how does Wheels complement Donlen’s spontaneity? Well, Wheels is creative, careful, and also a collaborative organization. And over the years, Wheels has invested significantly in a number of products and services which will be brought quickly to the relationship—one example is the Reimbursement program. Another is Wheel’s recent investment in a new ordering system which we will be able to leverage rapidly as the integration progresses. As a larger company, Wheels has had more scale for these types of investments.
Parent Company Investment
The combined similarities and differences form a strategic benefit. Additionally, the merged entity will have a parent company, Athene, ready to further capitalize future developments. Emerging as the number two FMC in the space, Wheels Donlen will have the creativity, expertise, intellectual tools, and backing for future developments. We will be spending more on innovation and bringing these advancements directly to our clients.
Progression of the Integration
There’s a perspective in the industry that this have been done before, and maybe not done so well. And it would be easy for outsiders to view this merger through that lens. I’ve said often that we plan to measure twice, or even thrice, and cut once. Taking a cue from the Donlen side, we will gather information and plan quickly; with a nod to the Wheels side, the integration will be methodical.
The approach to the integration is to start by systematically collecting information and making hypotheses very quickly. One thing that was done very early in the process was to conduct interviews of the executives to discuss culture. We followed up with a company-wide culture survey. The purpose was to distill a snapshot of each culture without making assumptions and to be very deliberate in capturing the elements that are essential and should be emphasized. The fact-finding was done in a way that didn’t focus on one organization over the other.
Integration Next Steps
A baseline for each organization will be completed by the middle of December. This is incredibly fast given that the merger was announced weeks ago. Next, the newly announced Executive Team will review the collected information along with the hypotheses. And, since we promised to measure twice, we will do all of that again. And then, once again.
Some of the findings will probably be “no brainers” and it will be easy to say “Yes! — that’s the direction that we should go in.” But in many areas, there will be a need to drill down for a closer examination. And in some situations, gaps or strategic items that neither company has addressed may be discovered. While methodical, it will also be rapid—measurement will happen in 30 days, again in 60 days, and once more at 90 days. Measure three times; implement once.
The final result will be a plan that extends out as far as four years. This is more than an integration; it is also a strategic plan, a roadmap, for the near future. We expect Wheels Donlen to emerge as the most client-centric FMC in the world. What we’re doing is much more comprehensive than just trying to bring two companies together.
And we’re not forgetting client feedback. What we do for our clients, is complex; there are many parts to it. Therefore, there’s a track of the integration that we call “Voice of the Client” which includes checking in with customers and sharing plans about future actions. This integration can only be successful with client feedback.
We have the unique advantage of not being pressed to meet a specific timeline—each company will be conducting business as usual while a very thoughtful integration happens in the background. During this time, communication on all fronts will be key. Wheels Donlen will keep communication lines open not only with clients, but also employees and vendors. This can’t be rushed. It is a start on our journey
The Journey to the Future
It’s an exciting time to be in this industry; we are experiencing once-in-a-century revolutionary changes. At this point in time in the evolution of the mobility space, many new technologies have emerged. All of the players in this space will need to decide whether they’re in it for the long term or not. You can guess where Wheels Donlen stands.
With the commitment that our new owner is making in the merged organization, we are definitely moving ahead full throttle. Our parent company is enthused over the future of the fleet business and wants to grow the new organization. While growth will be organic, there could also be inorganic opportunities. These exciting advancements will include access to new manufacturers and other businesses that are tied into our owner’s network. Wheels Donlen investors are connecting us with other organizations in the mobility space because they see this as a huge opportunity for them to invest even further. Looking to the future, clients will benefit through the introduction of new products and services.
2022 and Beyond
Yes, there will be change, but it will be positive change—and it will be incremental.
One thing will not change: we will honor the legacy of the two organizations. Wheels Donlen will be a company that acts on principles and does what is right for the client. In the end, what we have done, what we will continue to do, is to endeavor to understand our clients’ problems and work with them to develop the best solutions to solve those problems. There are just some things that will remain in the DNA of this family tree.