2 Case Study

Marilyn’s Excellent Adventure

Marilyn Hall is packing the contents of her Los Angeles apartment and thinking

about her new job. Monday morning Marilyn takes over as the President of the

Lottery Corporation (LC) in Pilot Mound, Canada. Marilyn has worked in the gaming

industry for years and has been very successful in her latest role as CEO of Ex-

Works, a manufacturer of gaming equipment. Her take charge, no-nonsense

approach turned this near bankrupt company into one of the leading

manufacturers in North America. Despite her experience and successful track

record Marilyn is having doubts about her next challenge – what will she do first? –

what will it be like to work in the “back woods” of Canada?

You’ve been hired as Marilyn’s Executive Coach to help her determine the best

approach to turning the LC up-side down.

The LC is an independent body created to administer and operate lottery and

gaming activities on behalf of the province. In addition to offering lottery

games and overseeing video lottery operations, LC’s mandate includes the

management of gaming technology, gaming design and financial and security

controls.

LC has been very successful since its creation 25 years ago. Running the

provincial lotteries has basically been a ticket to print money and annual

revenues are well over the 100 million dollar range. However, their playing field

has started to change. Competition for the “entertainment” dollar is on the rise

and market research has shown that “gaming” competes with other forms of

entertainment (e.g. movies, theatre, restaurants) for the consumer’s dollar.

There are also more opportunities for people to meet their gambling needs – the

number of National Games has increased (Lucky 7, 649) and e-gaming, that

allows you to play 24 hours a day, is on the rise. Some experts in the field

prophesize that the day of the scratch and win ticket may soon be over. For the

first time in its history the organization is at a cross-roads and must make a

strategic decision regarding the business they are in – do they “gamble” and

remain a “lottery” organization or do they enter the quickly expanding e-gaming

industry.

Although LC has a profitable track record the Board of Directors has become

very dissatisfied and are ready to force big changes in the organization. They

are convinced that the margins could be much higher and that the organization is

not efficient or well-managed. In a rare and bold move the Board commissioned

an Efficiency Study on the operations of the entire organization. Shortly

thereafter the President of 25 years resigned. The Board is ready for significant

change in the operation of the organization and are quickly growing impatient.

The culture of the organization has been described as warm, friendly and staff oriented.

People like to work at LC. It’s the type of environment where VP’s know staff by name and

take a personal interest in the well-being of individuals. Abnormally low turnover has resulted

in a workforce that is very experienced and long tenured. This low turnover is attributed in part

to their staff-friendly culture and their very strong preference for promoting from within.

However, pockets of staff aren’t as positive and describe the culture as stagnant, complacent

and not performance driven – basically a culture of entitlement. Some would say that

motivation to perform is non-existent. Most of the Senior Management team have been with

LC for several years. When the organization was formed 25 years ago the most experienced

and senior people filled the Executive roles and for the most part have remained with

the organization since. A few of the VPs are new – one actually worked her way

up in the organization from a mail clerk. Another left a partnership position in a

top Toronto ad agency in pursuit of a simpler life. The Senior team is relatively

cohesive although the beginnings of a rift between the “old guard” and the “new

blood” is developing. The old guard is reluctant to dive into the e-gaming field

and abandon the lotteries that have been the life-blood of the organization. The

new blood is convinced that everyday they aren’t in the e-gaming business is a

day wasted. After all, a lack of strategy has never stopped them in the past and

everything the LC has tried has been successful – why would e-gaming be any

different? The “power games” and politicking between these two groups are

starting to take there toll on the organization.

The day the President of 25 years (the only President the LC has ever had)

announced his “retirement” people were crying in the hallways. Since his

departure 6 months ago the organization has been in a holding pattern – some

people are anxious to move ahead and others are terrified of what may be

coming next.