Admit it, you love MBA rankings. Sure, they’re imperfect measures. But consumers gobble them up, and few schools can resist playing to the criteria used to rank programs.
If you really want to know why rankings are so popular just take a look at a business school websites or marketing brochures. You quickly come away with one thought: It’s hard to tell one school from another, with the exception of a campus or a building.
The messaging is fundamentally the same. Every school boasts the most talented students, supportive faculty, and accomplished alumni. They partner with top brands on “hands-on” projects that bring their students “real world” experience. And just about everyone offers the requisite pilgrimage overseas and rite of passage to Silicon Valley.
You could literally play B-school bingo when buzzwords like rigorous, close-knit, and transformative are being tossed around.
Alas, for better or worse, rankings are an imperfect and often severely flawed tool to separate the reality from the hyperbole. They’re the starting line, a means to compare programs to know where to best invest your time. Let’s face it: you are forfeiting two years of earnings and assuming six figures of debt to chase a dream. You can trust your gut, but it never hurts to verify it with past predictors and stakeholder sentiments.
So what are the best business school rankings? What variables do they weigh? What limitations do they have? What important truths do they reveal? Find out the answers to these questions in our second annual breakdown of the most insightful rankings of 2016:
Before we get into this, let’s lay down the basics.
Every MBA ranking places greater weight on something unique. The Financial Times produces the “just the facts, ma’am” ranking, with 40% of the ranking targeting pay-related data and another 40% focused on faculty quality and the international character of the programs. U.S. News & World Report and The Economist rankings balance detailed data with survey appraisals. U.S. News, for example, emphasizes variables like GMAT scores, placement rates and salaries, while also ceding 40% of the index weight to recruiter and academic opinion polls. In contrast, The Economist is a dizzying array of variables that differentiates itself by giving over a third of the weight to career services, networking, and career progress. Of course, Bloomberg Businessweek has turned into a poet’s paradise, with 60% of its ranking devoted to qualitative survey data from recruiters, students, and alumni. Finally, there is Forbes, the meat-and-potatoes ranking that is 100% grounded in pay and return on investment.
Alas, each ranking contains an Achilles heel. U.S. News’ academic survey, worth a quarter of the score, is based on the opinions of business school deans and MBA directors. As a result, it is defined more by reputation and popularity than direct experience. In contrast, The Economist has been prone to wild ranking swings, with ESADE (for example) somehow dropping 33 spots in just one year. In the process, The Economist rankings sometimes strain credibility. A great example: Australia’s University of Queensland ranking ahead of both Wharton and Columbia in 2016. The Financial Times sweeps in picayune data like the percentage of Ph.D. graduates, board membership of internationals and women, and faculty research and doctorates, while ignoring student quality inputs such as GMAT scores and undergraduate GPAs entirely. At the same time, Bloomberg Businessweek’s reliance on flawed samples of 9,332 students, a little more than 15,000 alumni, and 1,055 recruiters, can produce Economist-like head scratchers (such as Rice ranking ahead of Kellogg, Haas, Columbia, and Yale in 2016) due to the outsized influence of a smaller sample of respondents.
So how do you take the edges off and cancel out these weaknesses? You create a composite ranking that distributes weight based on the rankings’ authoritativeness. That’s exactly what Poets&Quants has been doing for the past six years. In our latest 2016 P&Q ranking, U.S. News was granted a 35% weight, followed by Forbes (25%), Bloomberg Businessweek (15%), the Financial Times (15%), and The Economist (10%). The drawback, of course, is that some variables, such as salary, will technically be weighed several times over. Even more, the Forbes survey-based ranking (which is not included in this story) is bi-annual, meaning it was last conducted in 2015 and relies on five-year salary gains from the Class of 2010. Still, the P&Q ranking integrates the widest swath of quantitative and qualitative data while tamping down the methodological excesses to create the most stable and wide-ranging ranking imaginable. An example: NYU (Stern) dropped from 11th to 20th in U.S. News after forgetting to supply one piece of information. With Poets&Quants, Stern bounced back to 17th, a more reasonable rank given its placement in the rankings of Bloomberg Businessweek (17th) and its previous year’s rank with P&Q (16th).
Which school was the overall winner in P&Q’s seventh annual American school ranking? Not surprisingly, it was Harvard Business School, which took back the top spot from Stanford GSB in 2015. How did HBS do it? Simple: They maintained excellence. The program held onto its first place finish in Bloomberg Businessweek and The Financial Times and fourth place ranking with The Economist. At the same time, it took back the #1 ranking in U.S. News from Stanford, thanks to higher outputs in starting pay ($149,784 vs. $145,173) and job placement (91.1% vs. 86.2%). However, it was close race. Stanford jumped from 7th to 2nd in Bloomberg Businessweek, due to placing 1st in the alumni survey and job placement (though these accomplishments were undercut by scoring 20th against HBS’ 1st in the recruiter survey). Even more impressive, the school vaulted from 11th to 5th in The Economist ranking. That ranking, however, comes with an asterisk as its renowned faculty ranked just 49th in quality in the student survey. Another Economist anomaly: The school ranked 6th in alumni effectiveness…yet finished 92nd in alumni breadth.
How is this for stability? Some 13 of the top 20 programs held their same spot in the 2016 Poets&Quants ranking. As a result, small gains made a big noise. Northwestern’s Kellogg School of Management, for example, rose a spot to tie Wharton for 4th, despite falling six spots on the Bloomberg Businessweek list. Dartmouth College’s Tuck School of Business climbed two spots to 7th for the opposite reason: It gained nine spots in Bloomberg Businessweek, including two top ten finishes in the employer and alumni surveys (not to mention record starting salaries for the Class of 2015). Rice University’s Jones School also made a splash, going from 28th to 23rd in response to high survey marks from students, alumni, and recruiters in the same surveys.
In contrast, Columbia Business School took the biggest hit in 2016, slipping from 6th to 9th, thanks to (notice a theme here) a five-spot drop in Bloomberg Businessweek that stemmed from blasé sentiments in the student and alumni surveys. Like many rankings, school placement tended to fluctuate outside the top 25. This trend included Vanderbilt Owen (29th to 26th), Georgia Tech Scheller (34th to 31st), Brigham Young Marriott (43rd to 34th) and Boston College Carroll (59th to 50th) to the good and Washington Olin (23rd to 28th), USC Marshall (27th to 32nd), Arizona State Carey (39th to 45th), and SMU Cox (39th to 45th) to the bad.
Next Page: U.S. News and World Report and The Financial Times.