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Theme park line management: interview with Lo-Q CEO Tom Burnet

Patience may indeed be a virtue, but it’s hard to be saintly when faced with a long queue for a theme park ride and a couple of small children in tow.  Lo-Q was founded over a decade ago when Leonard Sim was inspired by waiting hours in line to invent the Q-bot and with it the concept of virtual queuing.  The rest as they say is theme park history, and now there are few parks that do not offer visitors some kind of option to beat the queue. 

lo-q ceo tom burnetLo-Q has enjoyed phenomenal success with a multi million pound turnover; double digit annual growth; a listing on AIM [Alternative Investment Market] and a Queen’s Award for Enterprise.  However, this rapid development of the company slowed in 2010 and the Board took the decision to reassess both strategy and leadership.  Tom Burnet (see image left) was appointed as Lo-Q CEO in October 2010, bringing to the role a wealth of business experience, to steer the company through the next stage of its evolution.

At 18, Burnet was the youngest officer in the UK army.  Forsaking the Black Watch, a Highland Regiment, for combat in the world of business, he has had a varied career ranging from growing his own start ups to managing divisions of multi billion dollar organisations including technical consultancy QinetiQ and defence services provider Serco.  The Lo-Q Board have tasked Burnet with an ambitious strategy to kick start future growth and realise the company’s potential.  Nearly a year in, Blooloop finds out how it’s going…..

Blooloop: Please tell us about your career path to date. 

Burnet: I was a precocious 14 year old.  I got a scholarship to go to Sandhurst [Royal Military Academy] and at that point wild horses couldn’t hold me back and I decided not go to university.  I went straight off to be a soldier, which was all I’d ever wanted to be and followed in a family tradition.  It was jolly good fun for a few years, but eventually I realised that it wasn’t something I wanted to do forever. 

When I left the army I did a bunch of things: a bit of time working for myself in small businesses which I grew, and then working with much larger organisations.  In my last role [Managing Director, Defence Services at Serco] I had the privilege of having a team of 5000 people working with me.  The challenge in running a big division of a big company is that it takes a great deal longer to get things done and having a personal impact is difficult. 

I’ve found myself back in small cap land with Lo-Q and I’m delighted both to have chosen the leisure industry and to have come back to small business because things move so much faster and you can make your presence felt more effectively.  It’s also a first for me to be involved with a business listed  on AIM and I’m really, really enjoying that part of the job – it’s excellent.

Blooloop: What key lessons have you drawn from your career to date?

Burnet: The key lesson for any leader of any business is to hire the very best people you can; it doesn’t matter what industry you’re in.  I’ve run big defence contractors, a technical consultancy, a house builder, and every single firm that I’ve been involved with has sunk or swum on the quality of its people.  As a chief executive your job is to surround yourself with fantastic people and empower them to do a great job for you and the shareholders.

Blooloop: You’re new to the Attractions Industry so have there been any surprises?

Burnet: The first thing that struck me is that there has been incredible consolidation at the top of the market, a great deal of the global theme and waterpark attractions are controlled by a small number of companies, but I’ve been surprised at how undeveloped the supply chain is to that market.   Having come from running big service businesses, I think there is enormous potential for the supply chain to mature through consolidation in order to service these big customers in a more efficient way.

Blooloop: What attracted you to the role at Lo-Q?

Burnet: The opportunity to make an impact and to create shareholder value.  We have some fantastic technology and patents and a hot house for generating even more ideas.  Right now we address a small part of the leisure market but clearly our potential market is much, much bigger.  There are queue lines all over the place!  So the opportunity was on many, many levels: not just that its small cap, not just that I hoped to make a personal impact, not just a that it’s a listed business, and in that respect a new experience for me, but most importantly the huge opportunity to grow the business both in our existing and adjacent markets.

Part of me felt, “Why hadn’t I heard of this business?  Why isn’t everybody in the world using our technology?”  It’s an absolutely fantastic idea and I think that we’ve only just started.

Blooloop: Please can you tell us about your strategy for growth? 

Burnet: The Board had been pondering for quite a while how we were going to mature strategically and there were a number of options.  The Board’s decision was to go for growth and the first thing they did was to hire me.  They are extremely supportive of my ambitions to mature the business in its existing market, to introduce new products into those markets and then in due course to the stretch our wings beyond our existing markets.

Our first priority is to get really, really good at what we do by sharpening up, both operationally and commercially.  So that’s looking at everything from who our brokers and auditors are, to whether we are listed on the right stock exchange.  We also need to comply with best practice in how we look after our existing customers, whilst also making sure we communicate our strategy and competency better to potential customers.  The list goes on and on in terms of what you can do with what you’ve already got. lo-q credit waterpark

Then we can look at what products we can mature and develop in our existing market.  This year we have launched Q-band (see image left), a wristband based product for virtual queuing in waterparks, on a season trial at Six Flags White Water in Atlanta.   The trial has exceeded everyone’s expectations, our customers and their guests, and we now have very considerable interest across the industry which is fantastic.

So after looking at our core market I guess it’s back to the point about the opportunity to consolidate the supply chain within the leisure industry.  Perhaps we could be a catalyst for that and we’re certainly looking for opportunities to grow both organically and inorganically by acquisition.

Blooloop: You had £6m in cash on your balance sheet at the end of October 2010.  Are you looking to spend it? [The Lo-Q Annual Report says “we see merit in adding IP in areas that complement our own queuing excellence”.]

Burnet: We’re very lucky we have some cash in the bank but its not burning a hole in my pocket!  As a listed business there’s a bunch of things you can do with cash and clearly you can pay a dividend.  We’ve decided right now that actually we can show more return for our shareholders by spending the money in a different way.  Certainly we will be continuing to beef up our team internally in terms of size and bandwidth, product development and hiring more technically gifted people to help us.  But absolutely in terms of acquisition, we are, and have been for some months, looking at a potential pipeline of acquisition.

Blooloop: What are the benefits of Lo-Q’s products for operators?

lo-q products for theme parks and waterparksBurnet: They’re multi- tiered.  The best way to give an idea of our company ethos is to go back to where we started with Leonard Sim standing for two hours in a queue at a theme park.  The ride broke down irretrievably and suddenly two hours of his day had evaporated and at that point he wondered how the guest experience could be improved. 

Our product at its core is that you wait in a queue but it’s a virtual queue so you can choose to use that time in ways that you would like to rather than be trapped in a line.  That clearly that has benefits for the guest experience and people attach real value to it.  So guest experience is at the core of the original solution but it turns out that there are subsidiary benefits as well.  Customers who aren’t trapped in a queue line can go and do other things: enjoy more rides and distribute themselves around the park in a way that might be helpful to the park operationally, but also to consider other spending opportunities.

So from an operational point of view clearly there is a double benefit: first guests are delighted (we had well over 1 million users last year) and then also a secondary spend effect.  Happy guests and happy theme park operators!

Blooloop: Has there been any resistance to the concept of virtual queuing in terms of creating different “classes” of theme park guests?

Burnet: It’s clearly an objection that we have encountered over the years, and there are still some groups out there who resist, albeit the last major one has just introduced its first trial of front-of-line ticket system.  When we started, our product was a completely novel idea and absolutely there was potential for resistance both from guests and park owners.  What we’ve found over the last 10 years is that it is pretty much the norm and that there are precious few parks where in some way or other there aren’t a strata of guests, whether it be you’re hiring a room in a property and you get privileged access to the park in the morning, or you get access to a fast pass system via a direct sale of a ticket for an express customer or a Lo-Q system.  It’s now as ubiquitous as getting onto an aeroplane where some lucky people take a left and the rest take of us take a right.  All my customers obsess about providing a great guest experience so if we can help them combine that with optimising revenues then that’s fantastic.

Blooloop: You’ve been brought into Lo-Q at a really interesting time, as it matures from a highly successful tech start up that has grown rapidly, into potentially a much bigger organisation.  I wondered what changes you’ve made in terms of processes and management to equip the company for the challenges of future growth.

Burnet: I think one of the reasons I was brought in to Lo-Q was that I could bring a new perspective to a group of people who had been together for a long time.  They started literally from a garage with a soldering iron and a good idea, and now employ about 600 people in the thick of summer, are stock market listed and making a good profit.  So they have done amazingly well.

I’ve been lucky enough to run companies which have been literally start ups and at the other extreme I’ve run companies with approaching billion dollar turnovers and a few others in between.  On that scale Lo-Q is one of the smaller ones but all companies change and morph all the time.  As a company grows, enjoys success, starts to take on more people and have a bigger geographical reach, things have to change constantly.  

One of the reasons I was attracted to Lo-Q was that I was sympathetic to the stresses and challenges of running small business and yet could see what might be needed to mature the business which could be much larger.  That includes looking at the third parties you surround yourself with and the composition of the Board to guide and help with strategy.  Also setting priorities and helping people understand what you think is important and empowering them to do it.  So we’ve looked at our advisors and made big changes in the Board structure, bringing in new people with some new ideas, experience and enthusiasm.  Ultimately it’s a question of tone, balance and focus rather than anything fundamental because clearly they were already doing pretty well!

Blooloop: The 2010 Annual Report talks about the Board’s intention to drive new park sales, address “weaknesses in marketing”, “develop a cohesive longer term strategy for growth” and build a “strong and cohesive management team”.  That seems like quite a “to do list”!  How is it going?

Burnet: It’s what makes me get up in the morning.  I love it. There are plenty of things to do but I don’t think I have a sense that anything I’m doing is unique.  Any chief executive who is trying as hard as they can to deliver value for their shareholders will be doing the same things.  Its pleasing that we are making some pretty good progress across all fronts. 

lo-q queing theme parksBlooloop: Lo-Q invested £0.8m in research and development in 2010 (2009: £0.4m).  One of your biggest risks must be around keeping up with technological developments, in particular in terms of mobile technologies, and protecting your intellectual property.  

Burnet: The world is changing and we pride ourselves on our ability to innovate technically.  I’m enormously lucky to work with some great people here who continue to have fantastic ideas about maturing our product and what future products might look like.  We invented the whole concept of virtual queuing and we have some strong patents around that which make it extremely difficult for other people to copy what were doing and help me sleep at night.
In terms of how we address new markets, well I guess the thing that is really changing is that we all have a smart phone in our pocket or we will in two or three years and it’s interesting when I talk to customers in Asia and they’re not interested in anything other than a smart phone solution.  I think that Asia is definitely leading the technical charge but the rest of the world is catching up. 

In terms of ticketing and mobile payments and how we move into a mobile world, we’re working on that flat out right now and we’re in advanced discussions with a number of customers around how to provide all of those types of services: mobile queuing solutions plus ticketing plus payments on mobile devices.  That’s happening right now and I’m hopeful we should be able to announce some deals shortly.

Blooloop: So you see it as a natural progression for Lo-Q to be able to offer all those services?

Burnet: Absolutely and that’s a huge wind of change blowing through this industry and many others.  Where technology will ultimately replace traditional methods of service delivery, like ticketing and payments for example, we will see traditional business models being challenged.  Whilst these changes present operational challenges it is also a huge opportunity for the industry as a whole as far as were concerned.

Blooloop: I understand that you were surprised to discover that as well as being a high tech company, Lo-Q has a large service element to its business, and that you saw opportunities for delivering other services. 

Burnet: Well I was.  I thought that this was a great technology company and then it turned out that the technology is only part of the solution, because you need someone to bring the product to life for you.  Collectively we have many thousands of man years of experience in operating line management systems in theme and water parks and that’s a really important part of Lo-Q’s intellectual property – our DNA.  I feel that there are opportunities to develop our service offering in the nine countries where we hire, pay, manage and lead our employees today.  Once you have thelo-q theme park q-bot systems and processes in place to make teams operationally  effective, incentivise them to do a good job and hopefully attract them to come back to work for us next year, then you ask yourself “what else could that organisation offer our customers?”  It’s back to this consolidation idea: what else could be done and have I got an asset that would be useful to other people?

Blooloop: Are you looking for partnership opportunities?

Burnet: Absolutely.  We’re currently having several conversations and we’re always open to more.

Blooloop: How are you looking to grow in the existing market?

Burnet: We’re cutting it in a number of ways: by group and also by geography.  Where are we best placed to do the best job for customers where can we add most value? We try to make sure that we spend what marketing budget is available to us in communicating our values to those parts of the market which we think have the best potential for us.  So who can we do the best job for and who will make the most money from working with us.  Once you’ve worked out that go and make sure that they understand your proposition and with luck they’ll agree to give you a go.  Also of course to build on the great relationships we already have – and happily we have lots of those.

Blooloop: And finally, where do you see Lo-Q in 5 years time?

Burnet: It would be fantastic for us to be globally recognised as a significant provider of technical and technically- led services to the attractions industry globally. 

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