The Economist’s MBA Ranking Guru

This is a massive undertaking that takes quite a bit of time to do, right?

It’s clearly a difficult thing. We send invites to the schools in January. The surveys go out in February. It was literally signed off in September. I’m the only full-time person who works on it. I have someone who hosts the survey and someone who checks the data from the schools. But it’s quite full on.

Do you ever dream about it?

I probably do dream about it all the time. I can’t remember a specific one, but I do wake up in cold sweats sometimes.

It’s a big responsibility. That’s undoubtedly true. We survey 130 schools all together and we will probably increase that next year by quite a lot. That’s a lot of data points to make sure you get right.

How has the business school community responded to The Economist effort?

Schools try to explain why they are worthy to be included. Many schools are desperate to be part of it. We have this policy of one in and one out. So a school has to be more worthy than a school already in there to make it. There is some antipathy toward it.

Soon after we first started, Harvard and Wharton declared they had enough of rankings so for a couple of years we didn’t rank them (2003 and 2005). We had to be creative at getting at their students. Even those two schools have come round to see there is some good in it.

Would you say the rankings are fairly stable over the years or rather volatile?

Some of the comments on the website claim that we build instability into the rankings because we want it to move. They seem to believe that we think it would be dreadful if the rankings didn’t move. I personally think that’s unfair. The average change for a school would be pretty low year after year.

Once in a while one or two schools may move up 20 or 30 places and you have to make sure then that there is a valid reason to explain it. But the perception is not mirrored by the reality. With a few exceptions, it is very rare for a school to jump up or down. The vast majority of schools move very little year to year. We look at three years data—only 50% of the data is the current year and the previous year represents 30% and then the year before that is 20%. That is for all the data.

What’s your honest opinion about the validity of rankings?

We very much accept that all the rankings are limited in what they try to do. But whenever a student is spending $100,000 on something, they deserve to have a few independent assessments of what they are buying. You wouldn’t buy a sports car without looking at a few of the reviews in the car magazines.

The most controversial part is not the result of the rankings themselves but whether or not schools pay too much attention to them and whether they chase rankings too much by choosing students with high GMAT scores or focusing on industries like financial services where salaries tend to be higher. That does a disservice to students.

Over time, filling your class with students who have high GMATs or just focusing on one industry does the students a disservice and those schools will probably do worst in the rankings because it would affect the satisfaction level of the students.

You get a good amount of criticism over the rankings every year.

There is plenty, and you’re probably our biggest critic. You have to take criticism on the chin because if you are going to do this you have to accept it’s not perfect and it’s right for people to point out the limitations. Some of the criticism is valid and thought out and we are fine with that.

What are your thoughts on the value of the degree? Do you think the rewards have diminished as the economy has gone sour?

I think it is clear that the proposition has changed. Program fees at a majority of the Amreican schools in our ranking have been rising substantially. For the mid-tier schools by around $20,000 over the last ten years. However, salaries are more or less unchanged over the same time. So I think we are heading for a squeeze. The pool of local American students has been diminishing. So far schools have made up the shortfall with more students from Asia and South America. But they often prefer the lower opportunity cost of going for a one year MBA. So I suspect that more American schools will have to ditch their cherished two-year model; indeed a few already have.

At the same time, the economic situation in Europe means that there will be pressure here too. As well as having shorter programs, European MBA programs have been attractive to foreign applicants because students typically outearned their American counterparts (at least immediately upon graduation). But with fewer jobs, there are fewer gigantic packages out there for European graduates. Students who want a whopping pay packet would now be better off heading to Australia.


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