New Statesman: One game Camelot can't win - Camelot Group PLC's public image

The lottery operator has a terrible public image, and for reasons largely beyond its control.

Every year MORI carries out a survey on "corporate social responsibility", asking the public, voluntary-sector activists, MPs and others about the impact of Britain's companies on local communities and society in general. One question asks respondents which companies take their social responsibilities seriously. Guess who came bottom this year? No jackpot for you if you picked Camelot: the people who brought us the famous crossed-fingers logo are consistently fingered as Britain's No 1 corporate pariah - in this survey beating even Railtrack in public antipathy (although interviews were conducted well before the Paddington tragedy).

Railtrack provides an interesting comparison. Generally speaking, there's a close correlation between perceptions of how well a company performs commercially and how well it performs socially. Railtrack's commercial performance has been relentlessly attacked in the media: it's seen, however unfairly, as doing a bad job. Camelot is the only company I can think of that has a poor reputation precisely because it's doing a good job. The more Lottery tickets it sells, the more money it makes for good causes - and the more profit for its shareholders. That's what businesses are supposed to do, isn't it? What's the problem?

The problem is that although running the Lottery is a complex business activity, its image in the public mind is that of a public service. So attitudes to Camelot are bound up with a general hostility to the muddying of the public/private distinction that has been such a feature of the past 20 years. The only difference is that Camelot, a private company from the outset, has performed spectacularly better in business terms than most of the companies that have had private-sector status thrust upon them. Perversely this has made the problem worse, not better.

There's a further complication unique to Camelot: the role of the "good causes". Institutionally the distribution of Lottery funds is nothing to do with Camelot. That's why, in the early days, Camelot downplayed the "good causes" element in its marketing. The thinking was: "If we go on about the good causes too much, people will think we're the ones dishing out the cash, and then we'll be held responsible for every capricious award of Lottery money that happens to annoy the tabloids." Surprise, surprise, that happened anyway: after all, it's far easier to blame a company with a simple, memorable name and a swish logo than something called the National Lottery Charities Board, which no one's ever heard of- and that's just one of 13 equally anonymous organisations.

So a combination of cash for the Churchill papers and cash for the Camelot directors conspired early on in Camelot's life to pin a tail of public ignominy on the rear end of the spotted lion. The company has since tried to restore public confidence: proportionally the largest charitable foundation in British business; directors donating some of their bonuses to charity; an array of community development initiatives through the network of local retailers; and, most recently, the appointment of Sue Slipman, a respected campaigner, as director of social responsibility. Slipman's first act was to institute a comprehensive social audit of Camelot's stakeholder relationships, and no one who knows her can doubt that it will be scrupulously open, honest and hard-hitting where it needs to be.

Will all this make any difference to Camelot's image? When Mao was asked about the effects of the French revolution, he replied that it was too early to tell. Similarly, it will be a long time before the British public settles down to an acceptance of private business running the Lottery. As the licence comes up for renewal, let's not fool ourselves that a "not-for-profit" operator is the solution to public disquiet. As long as private companies are involved in the Lottery, there will be profit-taking: otherwise why would businesses bother - and, more importantly, why would they bother to do a good job?

The answer is not to pretend that running the Lottery is a charitable activity, but to ensure that the way it is run is consistent with society's expectations - precisely the purpose of Camelot's social audit. The immediate challenge will be to take the work of the audit and ensure that it comes alive in the public imagination.

The good-causes question can be resolved in a more straightforward manner: it's time the bodies responsible for distributing Lottery funds put aside their egos and allowed high-profile branding of Lottery-funded projects in order to bring home the true extent of the Lottery's impact on our national life. Indirectly this would help improve the image of the company without whose skilled operational abilities the projects wouldn't have been funded in the first place.

In time I can see the company that runs the Lottery rising to the top of MORI's survey. But don't hold your breath: there's no way it's going to happen before the next round of bidding for the Lottery licence. Camelot will have to hope that those making the decision will base their judgement on the reality of what it's doing, rather than on public perceptions.

Steve Hilton is a partner in Good Business, a social marketing company