“You’ll forgive me if I’m not really focussing on the share price at the moment” said Nick Varney, shooting down Kay Burley’s ambulance chasing questioning. It is the Sky News interviewer, not the Merlin Entertainment CEO, who is now feeling the heat. More interrogation than interview, Burley’s aggressive approach has generated more than 1,000 complaints to Ofcom and calls –from tweeters to online campaign sites- for the presenter to be sacked.
None of this is overlooking the fact that Merlin has questions to answer following the tragic collision of carriages on the Smiler roller-coaster. 16 were injured, 4 badly. A 17 year old girl lost a leg. The emergency services weren’t contacted immediately and the protocols for dealing with the accident were initially less than seamless. It could have been worse but given Alton Towers’ glowing safety record the incident was undoubtedly the biggest test the group’s CEO had ever faced.
What the softly-spoken Varney may lack in charisma he makes up for in visible empathy- as demonstrated by the sympathetic response to the Sky grilling. Behind the scenes he is also proving to be shrewd in mobilising support where it matters. Having worked for the company since the mid-80s, rising to its top job in 1998, Varney has an encyclopaedic understanding of his industry and knew who to reach out to.
Timing: Within hours of the incident Varney had come up to Derbyshire and had made the wellbeing of those affected his priority. His legal team must have been cringing; Merlin had barely the time to tot up the damage and rehearse its signed-off lines before Varney’s intervention. Contra Thomas Cook: the initial refusal of the travel operator to apologise to the parents of the children poisoned in one of its resorts was a result of an equation of responsibility with culpability: legal logic trumping humane sense.
Reputation matters:. Varney gave the order for the park to be kept shut for the day after and, for the ‘foreseeable future’ promised full refunds for those who’d pre-booked. As you’d expect, @AltonTowers suspended its commercial promotions; but it didn’t go silent, instead operating as an information notice board for customers.
What it meant: Closing the park in the height of the season and shutting down some of the headline attractions for an extended period on the basis of purely precautionary risk was an expensive gesture, with losses estimated to be £500,000 a day. But for Varney it was a necessary one. As someone who had given his best years to Merlin he has an in-build long-termism that prioritises legacy above share price.
Responsibility: While acknowledging the park’s glowing safety record he took full responsibility for what happened.
What it meant: Where a Tony Hayward would have said “accidents happen” and a Thomas Cook that “we will have to await the outcome of in the investigation” –both fair points but utterly toxic for public relations- Varney went on the record that he won’t “shirk responsibility” and that one accident is too many.
Actions and words: Hand-delivered letters were sent to all of those affected and Varney has personally reached out to all the families. He pledged to fully support all the injured and reassured all affected that there is no question of their needing to go through the anguish of arguing for compensation.
Much of the coverage focused on the recovery of Leah Washington, the 17 year old whose severe leg injury resulted in an above-knee amputation. Leah had intended to attend a One Direction concert- her conditions meant she had to forego this. A campaign initiated by Leah’s friends to #Ger1DToLeah inspired thousands of tweets and within a day the band had sent Leah a private video and invited her backstage to a future show. With heart-strings thoroughly yanked, this story provided an uplifting twist to an otherwise tragic event.
This may not have anything directly to do with Varney – Merlin Entertainment does have dealings with 1D’s people, Syco Entertainments, and wouldn’t be beyond pulling some strings. But more significantly, this focus on recovery couldn’t have happened had Varney not expressed Merlin’s contrition and accepted full responsibility.
In the short run the Smiler crash may have wiped, according the share price watchers, £200m off Merlin’s value -something to cause no small amount of exec board teeth grating. But in the long run Varney’s actions afforded Merlin something that is not a quantifiable as stocks: respect. And the proof of this is the customers. A week after the crash people are coming to Alton Towers (not in droves but steady numbers still). And customers are tweeting not to boycott but to celebrate the park.
Ultimately this story shows that when a brand is shepherded by a responsible leader who registers the human angle rather than the bottom line it can prove to be surprisingly resilient. Varney put his money where his mouth is- a seven figure sum has been reportedly been set aside (Merlin’s theme park revenue in 2014 was £331m). And having spent much time cultivating relationships he was able to call on his network of support and gain the benefit of the doubt when crisis struck.