Pushing People Buttons ’til It Hertz

The rental-car firm's CEO offers eye-raising views on CFOs and front-line workers.
David McCannNovember 14, 2013

In the late 1980s and early 1990s, while working at a news magazine called Business Travel News, I covered the car-rental industry. Oh, was it interesting. The competition among the five largest operators was hot like the sun. They hated one another with a molten-lava kind of passion. It was not terribly unusual for my articles to contain quotes of car-rental executives personally bashing counterparts at their competitors.

Opinion_Bug7One time, Frank Olson, the then-CEO of industry leader Hertz (and a close friend of O.J. Simpson), told me Avis would “never” pass Hertz as the biggest car-rental company. Next thing, I arranged to speak with Joe Vittoria, the chief executive at No. 2 Avis. I told him what Olson had said. “That’s a childish thing to say,” Vittoria observed. He then took the opportunity to lob some other potshots at Olson, who had once fired Vittoria for what the Avis leader now claimed were personal reasons. I went back to Olson, who decried Vittoria’s disgruntling and bitterly insisted — his voice quavering in anger — that the firing was over “his performance as a businessman.” (We printed much of this. Olson never spoke to me again.)

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Heavy consolidation in the car-rental industry has since dampened the rhetorical fires, but I just read a McKinsey & Co. article that left me gently wondering about the views of Hertz’s current CEO, Mark Frissora, toward current and former employees. I have no personal knowledge about his relationship with his CFO or the current corporate culture at Hertz, but I noted with interest some of the things he said in the article, which was in Q&A format.

Much of the article addressed how technology trends are affecting Hertz. McKinsey asked, “What are you doing to build the executive muscle you need to manage and stay ahead of these big technology shifts?” Frissora: “One way is that my CIO is not some second-tier executive delegated to the CFO.” Maybe that didn’t come out sounding as he intended, but the words seemed to imply not only a status report on the CIO but a stay-in-your-place sniff at the finance chief as well.

Picture of Hertz #1 Club Gold signage

Hertz has been the leading corporate car-rental provider for decades.

Does Frissora see the CFO’s role as an especially strategic and operational one that is not all about finance per se, as do many companies? He spoke about how he and 18 other top Hertz executives frequently visit front-line staffers without their managers or HR present. “We ask, if you were CEO for a day, what would you do? If you had a magic wand, what would you change about Hertz?” That is a commendable and insightful thing to do. But one gets the sense from the article that it’s only the CEO that asks the CEO question. Said Frissora, “The person who leads operations might sit with our mechanics or with the people who handle vehicle returns. The CFO goes to Oklahoma City, where several hundred staff members manage our accounts receivable.” A modern, strategic-focused finance chief acting as business partner to his or her boss would want to visit with workers in all departments.

(Left unclear was which CFO Frissora was talking about. Company headquarters will soon relocate from New Jersey to Florida, and finance chief Elyse Douglas resigned effective Oct. 1 rather than establish residency in the Sunshine State, as Hertz’s board asked key executives to do. She’d held the post for six years. David Rosenberg, CFO of Hertz International, is an interim replacement for Douglas.)

But here’s the Frissora comment that bothered me most. He spoke of Hertz’s culture being bound up with what the company calls TOM, or “total open mind,” a shorthand for an entrepreneurial, innovative orientation. He said, “We celebrate people who truly have a TOM attitude; we hold them up as examples. By contrast, with people who don’t walk the talk or just don’t have the values, you need to make an example of them as well. You have to make sure that when they leave the company everyone knows why they’ve left.”

I can understand why he feels that way. Still, it conjures an unpleasant image in my mind, perhaps of a medieval-style executioner roaming the aisles at HQ, lopping heads off the closed-minded in graphic public view.

At various employers during my career, I’ve been in meetings where the names of recently departed employees were dragged through the mud. I found that uncomfortable and, worse, unnecessary. The reasons for firings are usually apparent, and even if they’re not they generally get out in the open anyway, one way or another. And if a company strongly promotes a particular cultural attribute, employees who resist should be aware enough to expect consequences. But should they have to witness the purposeful denigration of former, perhaps-beloved co-workers?

Not that denigration is necessarily what Frissora was recommending. I didn’t intend in 1990 to pick on Hertz, and I don’t now. Oh, by the way, in their most recently completed fiscal years, Avis’s $7.4 billion in revenue was about a single coating of paint behind Hertz’s $7.5 billion. The companies will respectively issue 10-K’s for 2013 next February and March. I’ve got butterflies already.

Photo credit: Atomic Taco.