- IMD Business School

Transition expert Michael D. Watkins on CEO shifts at Uber and Expedia

IMD Prof Watkins looks at recent top leadership moves
4 min.
September 2017

On a transition gone right – Mark Okerstrom at Expedia

It’s not easy to be a successor CEO. Surprisingly, this is especially true when everything is going great, and a well-regarded CEO like Dara Khosrowshahi leaves to join a high-profile company like Uber.  As the new CEO, you may feel like you’re in (and may indeed be facing) a “nowhere to go but down” scenario. If things go well, credit goes to your predecessor “who laid the groundwork for sustained success.” If things go badly, well clearly you are not the (in Expedia, Inc.’s case man,) to fill the big shoes.

If Mark Okerstrom is feeling the heat, however, he’s not showing it. His initial messaging has been pitch perfect, and his focus taking Expedia to the next level globally seems right on, as does his emphasis on closer relations with Uber and the possibilities that opens up. Maybe Uber should buy Expedia and Khosrowshahi and Okerstrom can go back to running a company together; they clearly are good at it.

On transitions and boards – All’s still not well at the top at Uber

Has Uber outgrown its Board of Directors? It’s reasonably well understood that companies outgrow their founding CEOs and executive teams. The people who have the pathological optimism and disregard for convention required to be entrepreneurs often are not the people needed to scale a rapidly-growing company or to manage a large one (there are of course notable exceptions). What is less appreciated is that the same can be true of Boards of Directors. Uber’s Board, caught in perpetual internecine war and riven by warring factions seems to be a case study. The people who fund early stage companies and populate their boards may not be the people needed to take a company to full maturity. So perhaps it time for the investors to appoint more experienced, independent, large-company Directors to their seats.

On first moves and the right words – Khosrowshahi’s memo on anxiety at Uber

Uber’s new CEO Dara Khosrowshahi admits to being “scared” in a public memo. Well, of course he’s nervous, and rightfully so. Most leaders would experience some anxiety when taking such a challenging job. But it was a bad choice of words, especially given he’s diving into the shark-infested waters of Uber. Small decisions can have big impacts in leaders’ transitions, even ones seemingly as inconsequential as the choice of a single word. At least he didn’t say, “I’m so scared.”

On setting the right tone – What the new Uber CEO should do first

While there are some good recommendations for Uber’s new CEO in this Forbes article, such as working on the culture, building a diverse leadership team (which is part of the culture change), and improving driver relations, two of the five are remarkably bad ideas. To come in on Day One and apologize for Uber’s manifold sins would rightly be viewed as a gimmick, externally and internally. While the Holder Report does provide Dara Khosrowshahi with the basis for committing immediately to culture change, he needs to do his own assessment of the situation and, based on that assessment, craft a broader strategy for “turning the page on the Old Uber.”  Then there is the notion that he should denounce his own pay package, one he just negotiated with the Uber board. Why on earth should Khosrowshahi’s arrival be the moment to make some grand statement about CEO compensation? What possible purpose could it serve to inject turmoil into his relations with the board?

On selecting the right CEO for the job – Uber’s new pick

CEO selection processes often are weird and wonderful; Uber’s particularly so. This The New York Times piece raises the specter that Dara Khosrowshahi was chosen because he posed the least challenge to Travis Kalanick and his allies on the Board. And the notion that Jeff Immelt wasn’t successful at GE, or would be Kalanick’s puppet? That’s ridiculous. Lowest-common-denominator CEO selection is not likely to solve Uber’s severe governance problems.

Michael D. Watkins is Professor of Leadership and Organizational Change at IMD. He directs the First 90 Days, for leaders in transition. He co-directs Transition to Business Leadership (TBL), a program designed for experienced functional managers who either have recently transitioned or will soon transition into a business leadership position.


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