At PureGym, we recently published our 2023 results and, overall, they were pretty damned good. Our measure of cash profits/EBITDA (the one before some accountants in an ivory tower decided that rent was not a cost to deduct before looking at profits) was up by 39 per cent on 2022 at £132m. And, perhaps most welcome, we feel like we have (finally) left the pandemic years behind us and are no longer making increasingly fatuous comparisons back to 2019. 

My management team – all of whom are significant shareholders in the business – were pretty happy and justifiably pleased with what they have achieved. And at one level they certainly should be: they have worked incredibly hard over the past few years to deal with the existential threat of the pandemic and then the crises that followed.

Among other things, we had to manage with zero revenue for nearly 12 months, cope with high inflation and rampant energy costs, raise a lot of new equity capital and refinance nearly £1bn of debt facilities. The past four years have been as testing as any I have experienced in 35 years in business and we have come through in pretty good shape. 

So why do I say, “at one level”?  Surely, we should be hanging out the bunting and declaring victory? Or as one of my colleagues said: “We should have a bloody good party and celebrate – we don’t celebrate enough.” 

I love a party as much as the next person and I recognise the need to celebrate. But I have always held the view that a healthy degree of paranoia coupled with a prudent resistance to believing your own good news story is the most important response to a good year and great performance. 

Why do I hold these views? Well, let’s look at our own industry: gyms. PureGym is the number one operator in the UK by quite a distance and the number two across Europe. We are profitable, our investment returns are excellent and we have a good growth plan to extend our lead further over the coming years. Not bad for a company that didn’t exist 15 years ago.

But there have been market leaders who have been way ahead before. Fitness First and Virgin Active have both occupied that position and are now tiny by comparison to both us and their former selves. Others, such as LA Fitness, don’t exist at all anymore (in fact we ‘consumed’ them in the UK in an M&A deal in 2015).   

The question history asks of us, therefore, is quite clear: “What will stop PureGym from being the next in a lengthy line of former industry leaders?” 

I annoy my team by asking this question regularly – and usually not long after we have done something good. I am not a killjoy, but my experience tells me it pays to maintain a sense of healthy paranoia. After all, my working assumption is that every operator out there is asking themselves how they are going to catch us. 

That means if we want to stay ahead, we had better be asking that exact question of ourselves. I always remember our great friend and former business ambassador for PureGym, Sir Chris Hoy, saying that it was one thing to become a champion and something completely different to remain one. And he should know!

I can’t claim for a second that these thoughts are very original. I have been influenced by lots of people much smarter than I am. Daniel Kahneman’s enlightening views on our decision-making processes, Jim Collins’s challenges in From Good to Great, and the legendary Andy Groves, who built Intel and coined the expression “healthy paranoia” in his great book Only The Paranoid Survive. 

If you want a completely different take on being and staying good at what you do, take a look at the Mark Cavendish (another world-class cyclist, I am a bike geek) docudrama Never Enough on Netflix. It is a tale of the simply extraordinary effort it takes to remain at the top of your game. 

But I have embedded or tried to embed, the thinking from these and other great minds into how we behave and focus our time as a team. Pride in what we have achieved is OK, but we must remember that often pride leads to complacency – and complacency is almost always a prelude to failure.  

We have applied this thinking at PureGym in the way we have developed new gym formats, improved our product, taken innovative approaches to revenue management, reduced costs and make the tough choice to expand internationally. 

I think it is the sin of complacency that undoes many good businesses – management and leaders simply start to believe too much of their own schtick. They don’t ask themselves the hard questions like: where are we not as good as we like to think/claim we are and how will we improve? Where are the seeds of our own future downfall? How would we attack us if we were the competitors? What are we missing (because we are too big/confident/self-important) in the road ahead that will trip us up and what are we going to do now about it? 

In May, my management team celebrated after a good year. We encourage our colleagues to stand tall and believe in what we are doing. And we make sure we focus on our formula for success. But in equal measure, we ask ourselves those tough questions, challenge ourselves to be better, seek to adapt to what is happening and look to remain nimble as we get bigger.

Only if we keep positivity and belief in balance with healthy paranoia will we continue to succeed in the future. Ask me in five years’ time whether this approach has worked!  

Humphrey Cobbold is the chief executive of PureGym