If preparing in oven, place oven rack in low position and preheat oven to 350 degrees.
In a bowl, sprinkle the cubed lamb and beef with one teaspoon of salt and one teaspoon of black pepper. Toss with the flour until evenly coated.
Add half of the butter and oil to the bottom of a 7 quart dutch oven. Heat to medium high. Working in batches, cook the floured meat until brown on all sides. Do not crowd the pan. Transfer browned meat to a holding dish.
Lower the heat to low. Add another tablespoon of butter and another tablespoon of oil to the same pot. Add the chopped onions and stir. Cook and stir for 10 minutes until the onions are golden and translucent.
Stir in the potatoes, carrots, and parsnips. Sprinkle with the remaining salt and pepper. Cook and stir for 10 minutes. Add more butter and vegetable oil if needed.
Increase heat to medium high. Stir in the beef broth, water, and Guinness. Add the Worcestershire sauce, thyme, and bay leaves. Bring to a boil, stirring frequently to prevent sticking.
Remove from heat, cover the dutch oven with a lid, and transfer the pot to the heated oven. Bake and stew for 2 – 3 hours. Check cooking halfway through, add more liquid as needed.