What is the similarity between the 2018 Football World Cup and Major Capital Project Business Development?

As many of you will know, the decision was taken by FIFA to award the 2018 games to Russia. How could this happen? What was the basis of such a decision? Were England mistreated?

Whenever one approaches a major opportunity such as the World Cup, the decision-making process comprises three elements: – technical, commercial and political. The 2018 decision was no different. From the outset, I wonder if England had evaluated correctly the likely weighting of these three elements that would take place when the final decision was being made in Zurich. Many capital projects, have a decision-making balance where the technical and commercial components represent >90% of the decision with politics <10%. I should point out that politics can cover both legitimate and illegitimate (i.e. corruption) aspects.

However, based upon what has been reported, the England bid was both technically and commercially superior to the Russian bid. It can therefore only be assumed that the weighting in terms of the decision-making was that political considerations would provide greater than 50% towards the decision. This is perfectly legitimate, in the event FIFA had made this known to the bidders. Alternatively, England should have ensured before they committed themselves to bidding (or their bid costs) of the evaluation criteria in terms of weighting. Was this done?

So, what was the potential strategy that FIFA adopted in not being clear to the bidders as to the weighting? In the event that the FIFA strategy was purely to decide on the location of the 2018 World Cup, based upon political considerations, which could be that they wished emerging and new countries to be awarded the location as turned out in Russia being selected. Naturally, the quality of the bids by emerging countries will not only carry a higher risk profile but would not offer the same “quality” of technical and commercial proposals as the more developed countries. So it is in FIFA’s interest to have the developed countries develop their technical and commercial proposals and have the emerging countries attempt to minimize the gap to ensure that they are “competitive” and offer FIFA a worthwhile proposition whilst achieving their political ambitions.

So what should England have done? Identify the weighting of the decision-making elements and ensure that FIFA are contractually committed to delivering against these before they commit to make the effort and cost of a bid.

What should FIFA do to ensure that their decision-making process is seen by all parties as being fair and transparent? They would need to develop an evaluation criteria comprising the three elements: – technical, commercial and political, quantifying the various elements, they would be measuring each proposal against and making one tabulation that is clear for all.

4 Responses to “What is the similarity between the 2018 Football World Cup and Major Capital Project Business Development?”

  1. Martin Says:

    Very interesting and insightful piece. However, FIFA has the whip hand with countries lining up to lick their feet. An organization that has the bargaining power to oblige countries to waive their own domestic laws (tax and immigration) – see the BBC documentary – would never agree to a contractual commitment to follow any procedure. In practice this means that countries with any respect for themselves and fair process should decline to participate in FIFA’s bidding charades until FIFA has fairness, transparency and openness in their processes along the lines of the IOC. And if that does not work then world cups under a different auspices could be envisaged. After all this has occurred in both cricket and boxing to significant effect. For the record, although the bidding process was unfair to England, amongst others, the decision to select Russia was reasonable. Eastern Europe has never staged a World Cup, Russia ia a major world power and surely has the capacity to stage the event.

  2. David Says:

    Despite the apparently opaque nature of FIFAs decision-making, I agree with Martin that Russia was a sensible ‘business’ decision. England is a saturated market so far as football is concerned and already has a developed infra-structure in terms of stadia. England saw that as a strength of their bid but from FIFA’s perspective of developing the world game further perhaps that was a weakness? Maybe, Russia building new world-class football stadia was a bigger plus? Futhermore, Russia will potentially bring in new sponsors.

    I also agree with Tony that England may have misjudged the ‘political’ weighting (or perhaps the weight attributed to and what was meant by world development. One point I would make though, is that the weightings may not in reality be capable of being published in advance odf bidding? I believe the relative weightings given in arriving at the decision will be dependent on the actual bids received.

    The Qatar decision is more puzzling, although if viewed in the light of further developing the game (perhaps by appealing to the expansive Islamic world) it makes sense.

    As someone wrote in the Press earlier in the week – FIFA have taken a positive view on the global economy, raw material and especially oil prices up to 2018! Last time the oil price dipped significantly Russie defaulted on its debt.

  3. SAO Says:

    This logic can only come from the udisputed Master of BD process. i think you are right.

  4. Fred McMurray Says:

    So there you have it. If you don’t know ALL the rules don’t play and if you play and loose on a technicality, learn the rules.If you don’t like the way the game is played don’t bleat about it but get into a position where you can change the rules.

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