Expedia has promising candidates if it chooses to look internally for a permanent replacement for outgoing CEO Dara Khosrowshahi. Our guess for the interim pick is CFO Mark Okerstrom.
A survey of the company’s leadership team reveals a slate of executives with a diverse set of skills.
>> Editor’s Note: CFO Mark Okerstrom was selected as Expedia’s new CEO on August 30. Read the full story here.
Mark Okerstrom, as chief financial officer, has often stepped in when Khosrowshahi hasn’t been able to do a major task — be it a speech, an investor roadshow, or a negotiation.
Canadian-born Okerstrom, 44, is a rarity among C-suite executives in being fluent in numbers and skilled at public speaking. Unlike many people who spend their days in Excel and Powerpoint, Okerstrom is charismatic enough to represent his corporation in public forums such as television, investor calls, and global conferences.
He was also instrumental in the acquisitions of the online travel agencies Travelocity and Wotif. Earlier in his career, he handled mergers and acquisitions work for Bain & Company’s private equity arm.
Okerstrom has supporters. Brad Gerstner, chief of Altimeter Capital Management LP — a hedge fund that heavily invests in the travel sector and had a market value of $2.4 billion at the end of June — said on Twitter that it was a clear choice that Mark Okerstrom should be next CEO of Expedia because he is “a key reason Expedia is firing on all cylinders.”
The Operations Guys
Aman Bhutani has the advantage of being president of Expedia.com, Travelocity, Wotif, and Expedia’s joint venture with AirAsia. He also oversees product development, technology, and media across the corporate group.
Between 2010 and 2015, Bhutani was CTO and led brand Expedia’s engineering team. That type of position has tended not to be a stepping stone to the top job at most companies. But Bhutani, 41, may become an exception.
As CTO, he successfully led the creation of a new technology stack — a more nimble and adaptable core computing platform — and led the migration of new brands, like Orbitz, Travelocity, and HomeAway onto it.
While there were some more hiccups than expected with the Orbitz platform migration, Bhutani can overall point to a step-change in the productivity of the company’s marketing teams thanks to the flexibility of the new tech stack.
The new system matters. A small example shows the point: Since last summer, most advertisers have been given an option to bid on new “direct” Travel Ads listings. When a user clicks a sponsored listing for, say, a hotel, a browser tab opens to the hotel’s site — not just a link to the hotel listing page within Expedia. The underlying technology shift enables that to happen in a way it couldn’t have previously without a lot of bespoke coding.
Bhutani has also recently upped his public presentation game, appearing more frequently and in a polished fashion on several industry stages — including a presentation on voice-powered Internet last November at Expedia’s annual event for suppliers.
John Kim, currently the president of the company’s vacation rental marketplace HomeAway, had been a key person for Khosrowshahi to bounce innovation ideas off of during Kim’s previous role as chief product officer for Expedia.
According to corporate lore, Kim was the person who advocated that the company should adopt its so-called “test-and-learn” culture. In brief, decisions throughout the company — from engineering through human resources — are now encouraged to be vetted by a data-based approach that can be transparently presented for critiquing by other stakeholders in the organization.
While engineers worldwide long ago switched from using gut instincts and internal politicking to relying on data to make decisions, Kim is notable for having found a plain-English formulation and set of workplace habits that could be understood and applied across Expedia’s far-flung divisions, including marketing and human resources.
Expedia, under Khosrowshahi’s leadership, has also made gender balance a priority. About 52 percent of its workforce in 2016 were women worldwide, above the average for tech companies.
But the company hasn’t given the women on its leadership team as many of the opportunities that can provide good training for the top job as it might otherwise have.
For example, Ariane Gorin, senior vice president and general manager of Expedia Affiliate Network, Melissa Maher, the head of the global partner group for Expedia, and Jen O’Twomney, head of the tours and activities division, seldom get star opportunities at the annual Expedia conference for its business partners and they are seldom put up for interviews with the media. While media experience is certainly not the only skill that’s important to a CEO, it’s a signal of the broader narrative.
Of the bunch, Melissa Maher stands out for her work in managing the global business relationships with the company’s top strategic hotel partners. The company’s efforts to keep the global hotel chains on their side by offering innovations in loyalty program marketing and changes to contracts have been spearheaded by her and her team.
Barry Diller, chairman of Expedia Inc’s board, will have a crucial say in who the next CEO is as arguably the company’s most significant investor.
Will Diller and the board want to choose someone who is in the Khosrowshahi mold? Or would he look at senior leadership at other companies he has associations with to bring in new blood?
Unlike old school corporations like Proctor & Gamble, internet companies like Expedia have looser corporate hierarchies made up of less obviously structured networks who devolve a lot of power to self-managed teams.
So the old Politburo-style method of promoting a new leader from within the existing management ranks is less common. Many boards are looking for leaders who bring in a range of skills, contacts, and experiences that can take a company in a different direction.
Looking outside of Expedia, fresh faces like TripAdvisor’s chief executive Steven Kaufer might be a surprise pick. (Diller has served as a special advisor to TripAdvisor since 2013.) Stealing away Kaufer might have the added satisfaction for Diller of throwing a wrench in the plans of Liberty Media’s Greg Maffei, who own significant shares of TripAdvisor but who crossed swords with Diller in 2008 over control of Diller’s IAC.
Kaufer himself would come with an edge over the Expedia leadership team in having been a CEO for more than a decade. While investors have recently dumped shares in TripAdvisor because of an over-confident rollout of an “instant booking” product, Kaufer has presumably learned the lesson and is even more prepared for the difficult decisions of leading a global company.
Critics will parry that Kaufer doesn’t have a track record as a great technology guy, and a pick of Kaufer might not inspire investor confidence given TripAdvisor’s smaller size and share price decline in the past year of more than 40 percent.
A wild card might be any candidate with significant experience in Asia. Expedia has shown ineptness when it comes to growing its business in the Asian Pacific market, especially China. (Exhibit A: The eLong investment fiasco.) Many believe Asia will be a growth engine of the coming decades.
Khosrowshahi set a high bar for executive leadership. After a stint as a banker with Allen & Co, he worked as CFO of Barry Diller’s internet conglomerate IAC before Diller made Khosrowshahi the boss of Expedia in the mid-2000s. (Note: Diller hired out of the CFO role. Maybe he will again.)
Khosrowshahi has admitted that he made early mistakes, which he has since chalked up to inexperience.
Yet he went on to lead Expedia through years of double-digit revenue rises — a tough trick to follow.
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Photo Credit: Expedia CFO Mark Okerstrom speaking at the the 2016 Expedia Partner Conference in Las Vegas. Expedia
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