Just weeks after taking up his new job at the Post Office, Nigel Railton was keen to build bridges with his workforce.
“To say it’s been a difficult time for the Post Office would be an understatement,” he is understood to have told postmasters at a meeting in central London last week.
“But I passionately believe that the positives for our business far outweigh the negatives.”
For Railton, the former boss of lottery operator Camelot, the comments signalled the start of a root-and-branch strategic review aimed at securing the future of the scandal-hit organisation.
The Post Office is reeling from the Horizon IT scandal, with the inner workings of the organisation being picked apart at a public inquiry.
At the same time, its executive team has been decimated amid allegations about workplace culture and public mudslinging by current and former bosses.
Railton, who took up the role of chairman at the beginning of May, has now turned to two former colleagues at Camelot as he parachutes in trusted executives to help steady the ship.
But as the new Post Office chief buckles down to his strategic review over the summer, he will be doing so under the full glare of public scrutiny – and his reputation as a turnaround expert will likely be tested to the limit.
Railton, who grew up in Crewe, has a CV quite unlike most at the top of the business world. After leaving school at 16, he started his working life making tea and cleaning the signal box at the railway station in his hometown.
He remained with British Rail for 12 years before qualifying as an accountant in 1995 and, following short stints at power tool maker Black+Decker and automotive group Daewoo, joined Camelot, which had just secured the licence for the new National Lottery and set up its headquarters in Watford.
Railton, now 57, spent more than two decades at Camelot before stepping down last year.
For Kemi Badenoch, the Business Secretary, it was Railton’s track record in turnarounds that made him an ideal candidate for the Post Office role after she sacked his predecessor, Henry Staunton.
Announcing his appointment last month, Badenoch said: “I want to thank Nigel for stepping up to public service at a time of need, and I know he can help fix the issues of the past whilst transforming the company for the future.”
Railton took over as chief executive of Camelot in 2017, just after the company had made the controversial decision to add 10 extra balls to the lottery – lengthening the odds of winning the jackpot from one in 14m to just one in 45m.
The executive has acknowledged that the National Lottery was in a “bad way” when he started and that Camelot’s retailers were “frankly disgusted with us”.
It was against this backdrop that Railton launched a strategic review and embarked on a turnaround plan that helped to reverse declining lottery sales and returns to good causes, driven largely by a focus on improving the lottery’s digital offering.
Camelot’s National Lottery sales hit almost £8.2bn in the year to the end of March 2023 – the second-highest figure in the game’s history.
Railton’s tenure was not without its difficulties. In 2022, Camelot was fined £3.2m by the Gambling Commission over errors on its app that wrongly told winning players they had lost.
And ultimately Railton was unable to retain the National Lottery licence, which changed hands for the first time in almost three decades earlier this year after Allwyn, the company run by Czech billionaire Karel Komarek, emerged victorious from an auction.
Allwyn subsequently bought Camelot’s UK operations from previous owners, the Ontario Teachers’ Pension Plan Board, marking the end of the company’s short life.
Nevertheless, Railton, who also chairs currency management firm Argentex, has gained a reputation as a turnaround expert and is well-regarded by those who know him.
Ian Hannaford, a former marketing director at Camelot, describes Railton as “very smart, very driven, but certainly fair”.
“He’s a straight-shooter who calls it how it is,” he says, adding that his background in accountancy means he will be very focused on the commercial performance of the Post Office.
Another executive who has worked with Railton describes him as a “very impressive operator”.
Yet the Post Office role is Railton’s most high-profile – and likely most challenging – position to date.
The company has been thrown into crisis by the Horizon IT scandal, which saw subpostmasters pursued for thousands of pounds by the Post Office due to errors caused by faulty computer systems.
The scandal, which was dramatised in the ITV series Mr Bates vs The Post Office, led in some cases to suicides and prison sentences. A public inquiry is ongoing.
As a result, Railton will be tasked with managing the ongoing fallout from the incident, while the company is also braced to pay out millions of pounds in compensation to victims. The new chairman told postmasters last week that compensation was his “number one priority”.
The Post Office is also facing wider scrutiny over governance and culture issues at the state-owned company.
Staunton – Railton’s predecessor as chairman – was removed from the role after he was accused of making sexist and racist comments about a female job candidate. A bitter public row ensued, with Staunton rebutting the allegations and taking aim at Badenoch and Nick Read, the Post Office’s chief executive.
Read faced a string of other claims about his behaviour, including that he oversaw a culture of misogyny, but was recently cleared of any wrongdoing by an independent barrister.
Meanwhile, a number of senior staff members are absent. The Telegraph revealed in March that finance chief Alisdair Cameron has been on sick leave since last year amid a clash with Read.
It is also understood that Kathryn Sherratt, the finance director who had been serving as interim chief financial officer in Cameron’s absence, is not currently working.
The company is also losing its public inquiry director and Owen Woodley, deputy chief executive and chief operating officer who has been at the Post Office for eight years, is also leaving the company this summer for personal reasons.
As a result, one of the first priorities during Railton’s short tenure has been to restore some order to the leadership team – at least on a temporary basis.
The Post Office last week appointed Preetha McCann, who stepped down from Selfridges earlier this year after just four months, as interim finance chief. Neil Brocklehurst, who succeeded Railton as co-chief executive of Camelot, will join as interim chief operating officer.
The Post Office has also appointed John Dillon, another former Camelot executive, as its interim general counsel.
The appointments highlight how Railton is turning to trusted former lieutenants as he looks to stabilise the business. For Hannaford, they underscore the chairman’s focus on personnel.
“He’s very aware and focused on people and making sure the culture is strong,” he says. “He always makes sure people are valued”.
Getting his team in place is only the first step, however. Railton has committed to a 12-month term as chairman and is expected to complete his strategic review in the autumn.
Cost-cutting is likely to be at the heart of his approach. Postmasters are currently campaigning for greater remuneration from the products and services they sell to consumers, and Railton is understood to believe that cutting central costs could help to boost their pay.
At the same time, the Post Office chairman will be tasked with leading negotiations with the new government to secure future funding for the struggling company.
Railton has said he is coming into the Post Office with his “eyes wide open”. But with public scrutiny showing no signs of abating, the turnaround expert must now prove he can deliver change.
