CFO Studio Magazine, 1st Quarter 2012
Teams that identify problems early and can act quickly to develop alternative responses deliver effective management – and success.
Act, don’t react.
At Avis Budget Group, that statement is far more than hopeful advice for the company’s millions of business and leisure customers. Indeed, it’s a guiding principle for David B. Wyshner, senior executive vice president and global chief financial officer, who believes proper planning, especially in the face of adversity, is the key to long-term success.
“There will always be difficult choices to make,” says Wyshner. “Knowing when it’s time to make them can position a company to weather a storm — and position it to do well and succeed over a long period of time.”
“Being proactive is the only way to be,” he adds, noting that a team that identifies a problem, works together to develop alternative responses and acts quickly is the very definition of effective management. It’s the strategy he has employed and has instilled in every member of the Avis Budget financial team since he joined the firm – then Cendant – in 1999. Wyshner, 44, has been holding the financial reins at Avis Budget since August of 2006; prior to that, he served as the company’s treasurer.
When Wyshner, the board of directors and shareholders at Avis Budget – even the global marketplace – reflect on 2011, they will collectively view it as a year of strategic action.
Hope is Not a Strategy
“When someone says, `I hope it’s not going to be a problem,’ or `I hope this problem is going to solve itself,’ that’s a strong signal to me that it’s time to come up with a plan of action,” Wyshner remarks. “Hope is not a strategy.”
He explains that in the past few years, those signals were coming through loud and clear. Call it the “perfect storm“ for a vehicle rental company. The world markets were in deep recession. Two of the largest auto suppliers – General Motors and Chrysler — were headed toward bankruptcy, and the entities Avis Budget had historically counted on to finance its ever-growing fleet had ground to a halt.
As if those storm clouds weren’t predicting impending doom, the market for leisure travel was drying up and, in an effort to maximize capital, businesses worldwide were coming to depend more on technology than travel.
“We, as a company, were going through a very difficult internal recession,” Wyshner recalls. But, he and his team stuck to that overall guiding strategy: Act, don’t react.
Faced with current and oncoming adversity, the company acted swiftly, closing unprofitable locations and realigning headcount to keep in line with customer volume. It moved away from negative margins and aggressively toward keeping fleet levels in line with demand.
It was a group effort, for sure, but Wyshner certainly led the charge to take action. “I see myself as a member of the senior leadership team working with great people to move the business forward,” Wyshner explains. “It’s important to me that we are being thoughtful and analytical from a financial perspective in all of our decision-making across the board. We are more than the finance team at Avis Budget. We are part of a much bigger, broader operation that is always focused on doing the best for the people we service.”
“I’m incredibly proud of the
actions we took during difficult
times, and the fact that we were
able to do them in a way that
didn’t negatively impact our
customers was an overall success.”
One Focus, Always
“I’m incredibly proud of the actions we took during difficult times, and the fact that we were able to do them in a way that didn’t negatively impact our customers was an overall success,” he says, noting that satisfied customers are a strategic focus every hour of every day in every country that Avis Budget operates.
“Customers are the lifeblood of our business. Having happy, satisfied customers is critical,” he explains. “I’m not here to focus on just the numbers. I take a much broader view of our business. Every month I review a reporting package with my team that includes Voice of the Customers’ scores. I believe that keeping those numbers at the forefront allows me to think about this company strategically, from every angle.”
In fact, make no mistake about it. All this talk about customer service isn’t fluff. Wyshner says that focusing on the customers does add up — literally.
Consider that Avis Budget has two highly recognized brands that meet the needs of both commercial and leisure travelers. The company handles more than 27 million transactions a year. Every time the company makes a change, even the tiniest change, there is an exponential impact on the bottom line.
“When we focus on the customers’ needs,“ says Wyshner, “we are constantly looking for ways to do something a little better. We look to handle the transaction more efficiently, which saves time.
If we find a way to offer the customers something extra that they are asking for, we can get a little more for a rental day. Those financial impacts, up or down, get multiplied by 27 million. If we save five cents a transaction, times 27 million transactions, that’s a number that can’t be ignored.”
By serving two audiences – money-conscious travelers with the Budget line and premium travelers through Avis rentals – the company has figured out a way to wrap its collective arms around the overall market. The company reported $6 billion in revenue last year.
A Bigger Piece of the Pie
Avis Budget has a global presence; it has the leading market share in Australia, #2 in the United States, and operates through both corporate owned locations as well as a network of licensees in more than 175 countries. Wyshner’s team, however, felt there was a way to strengthen the company and expand its reach.
He led an initiative to acquire Avis Europe to reunite the global operations of the Avis and Budget brands under one corporate umbrella. The deal closed in the fall of 2011; Avis Budget Group acquired all outstanding shares of Avis Europe for about $1 billion.
Prior to the merger, Avis Europe was an independent publicly traded company that operated the Avis brand via a network of more than 3,100 locations in 112 countries, through wholly owned subsidiaries in 13 countries and through license arrangements in an additional 99 countries.
Avis Europe also operated the Budget brand through 950 locations in 59 countries.
Wyshner believes the initiative was a win-win for the entire company. First, following the deal, Avis Budget made moves to create three new operating regions – Europe, Middle East and Africa (EMEA); North America; and Latin America/Asia Pacific – that will further integrate worldwide company operations.
According to corporate projections, the company believes the strategic initiatives it has implemented have accelerated its revenue and profit growth and that it is well-positioned to realize significant benefits from the acquisition and integration of Avis Europe.
“Our overall initiative is allowing us to more effectively service customers worldwide and rapidly grow international markets while at the same time produce operating synergies of more than $30 million a year,” Wyshner explains. “We believe, strategically, that it is very important to reunite our
brands on a global basis. These decisions allow us to offer a consistent message for our brands worldwide.”
“And, the fact that we have been able to achieve all this in a financially and strategically attractive fashion is both important and satisfying.”
Keeping his Eyes on the Ball(s)
In addition to guiding the team that accomplished the Avis Europe acquisition, Wyshner’s duties include overseeing all financial duties at the company, as well as corporate communications and information technology. He says he balances it all by focusing on driving revenue, driving shareholder value and growing profitably.
Mission, hopefully, accomplished. The company’s initiatives to reduce costs and enhance productivity provided approximately $65 million of incremental savings in 2011 compared to 2010, bringing the annual savings from the company’s actions since 2008 to $575 million.
Outside of his Parsippany offices, however, he is focused on the ball field – literally. Though 2011 was the year of the huge Avis Europe deal, Wyshner looked back on it as the year his daughter’s Little League team – the one he helped coach – finished third out of eight teams. When Wyshner recalls the story, his voice reveals more than a little bit of excitement.
“We won the playoffs!” he exclaims, reminding anyone within earshot that success outside of the boardroom is just as important as inside.
“I’ve been quite fortunate in terms of the opportunities I’ve had so far,” Wyshner reflects. “I was a senior vice president at age 31, an executive vice president at 33 and CFO of a Fortune 500 company at age 39. I’ve had so many opportunities to grow as a manager, as a finance team leader and as an executive over many years. With that being said, I feel like I have a long way to grow. There are always ways I think I can grow, develop and do better. I want that for myself and for Avis Budget.”
|Read other articles|
|Suggest article topics of interest|
|Download the flip book for any issue|
|Follow CFO Studio on Twitter|
|Request an invitation to attend a CFO Studio Reception|
|Request an opportunity to appear in a CFO Studio On-Camera Interview|
|Recommend a CFO for an On-Camera Interview|
|Submit an Article|
|Register for the CFO Studio Knowledge Registry|