Lotterywest: Risk management with courage and integrity
A case study of enterprise risk management at Lotterywest.
“They were not afraid to expose areas of challenge or difficulty to ensure that the design and implementation was effective and embedded over time.”
~Stella Rapanaro – Senior Manager Risk and Internal Audit
Lotterywest is as statutory authority that runs Western Australia’s state lottery. It returned $265.3 million to the community last year. Beneficiaries including hospitals, arts, sport & thousands of community groups.
Lotterywest reports to the State Premier. Their independent board ensures the operation of responsible lottery games that deliver annual returns to statutory and discretionary beneficiaries. Significant funds move through the organisation. As such, strong risk management is vital for ensuring Lottterywest’s success.
What did they want to achieve?
Following an internal review, Lotterywest wanted to better integrate risk management into the enterprise. They asked the market to propose a new risk management framework and policy. They also wanted to train internal risk champions to activate risk management.
How did Blue Zoo assist?
By designing a contextualised approach to risk management that resulted in sustained outcomes.
How we approach risk management. Risk management exists on a maturity scale. It is more than just a set of policy documents and annual review cycles. Enterprise risk management should be about exploiting opportunities in a consistent, controlled manner. It should cover everything from financial performance, to compliance, technology, staff wellbeing, culture and reputation. To be truly successful, risk management requires a robust risk culture supported by a well-articulated risk appetite and fit-for-purpose tools. It’s akin to having a skilled conductor leading a full orchestra to create music, not noise.
Why we didn’t give what they asked for. In early discussions, we explored how and why each factor mattered to Lotterywest’s success. We helped to paint a clearer picture of the organisation’s risk management profile and maturity, which wasn’t where it was thought to be. Using a collaborative approach, underpinned by respect and trust, we proposed a revised methodology to bridge that gap. We sought to ensure that the proposed enterprise risk framework would be accepted and enacted by the organisation.
What we did differently. Comprising of senior advisors, our team invested significant time in understanding Lotterywest’s business units. For example, their critical functions, language, risk profiles and maturity. This allowed us to build a highly tailored policy and framework that all staff could see themselves in. In doing so, we considered strategic risks through to operational risks.
A true partnership. What started out as a discrete risk engagement evolved into an ongoing advisory relationship. We spent the next two years educating and empowering teams to integrate risk management into their operations. It should became ‘business as usual’ rather than a siloed function. We showed their teams how to identify and assess risks in line with the organisation’s appetite. As a result, the increase in meaningful risk reporting to the Executive and Board fueled better informed and insightful decision making.
What was the outcome?
Practical long-term impact. Lotterywest took significant strides forward in their risk management maturity. It developed the reporting visibility to develop risk-based planning and prioritise resources more effectively. We delivered a highly tailored Risk Management Policy and Framework. It included a set of risk tables reflective of Lotterwest’s unique language, structure and delegations.
Embedding risk intelligence. We designed and delivered many workshop sessions. This training increased the overall awareness and understanding of enterprise risk and enabled Lotterywest to identify their success and build upon it. Accountability for risk became part of everyone’s role. The enterprise risk system added value to the organisational operations.
Genuine cultural change. By investing time in understanding their unique context, language and culture, Blue Zoo could map out a change strategy that was pragmatic, fit for purpose and embedded the knowledge within the organisation. They welcomed our advice to focus on the value of risk management and raising their risk culture. Consequently, this stimulated their appetite for change.
Making risk management their own. We focused on educating their workforce to make the connection between risk, resources and performance. Useful documentation and processes supported this. Lotterywest now have the skills, systems and knowledge to continue their maturity journey. They are increasing their resilience by making business systems more robust.
Stella Rapanaro, Senior Manager Risk and Internal Audit at Lotterywest, endorses our successful collaboration:
“Blue Zoo was a relatively unknown entity to us. They came to really understand our business, drivers and culture.
As a result, they gave us a successful and pragmatic enterprise risk management framework and system. They were not afraid to expose areas of challenge or difficulty to ensure that the implementation was effective and embedded over time.
We are satisfied that the risk management strategy they pro-posed is helping us to build corporate resilience in the long run.”