Dave Johnson | Crain's

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Dave Johnson

Background:  

Aimbridge Hospitality owns 475 hotels worldwide with 20,000 employees, including 350 in the corporate office in Plano. The hotel management company has come a long way since Dave Johnson founded it in 2003 with just eight hotels. At the time, his office was an empty hotel room, a far cry from his previous gig at Wyndham International. The company reports having had 20 percent compounded growth for the last nine years. 

The Mistake:

Sometimes ambition can get the better of you.

In the late 1990s, I worked as an executive at Wyndham International where we’d just gone through an IPO and a merger with Patriot American Hospitality.

We started to raise equity but quickly made some bad decisions and got over-leveraged. We assumed the growth we’d enjoyed in the past would continue.

Instead, we were on life support before the Sept. 11, 2001, terrorist attacks.

Resting on my laurels during that turbulent time turned out to be a tough lesson. You have to change and challenge yourself and know that every year will be different.

While I was earning a nice living and had a great office, I realized I had to get out.

Growth for growth’s sake will get you in trouble fast.

The Lesson:

Everything I learned at Wyndham International has helped me build a successful hotel management empire at Aimbridge Hospitality.

Everyone wants growth. It’s exciting and keeps shareholders and employees happy. But it needs to be managed.

We can’t just say 2016 was awesome and do a carbon copy for 2017. Never let the financial part of the business drive too many of your decisions. Growth for growth’s sake will get you in trouble fast.

I’ve walked away from deals because I didn’t think it was in the best long-term interests of our company.

We have to differentiate ourselves from our competitors. 

Photo courtesy of Aimbridge Hospitality.

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