Explain why the methodology complicates your ability to do a combined global ranking.
For one thing, a lot of companies have separate U.S. and international recruiting arms so it makes it difficult to know you are surveying the right recruiters. Right now, we survey two different recruiters from the same company to make sure we’re capturing both. If you want to bring it together, it’s not so much a problem in Europe and Canada but if you wanted to expand it you may be in a situation where you would need to translate the whole thing. And we’re not on the ground in a lot of places like Africa. So we’re limited in what we can do. We may rethink this someday and come up with a way to do it. When and if is a crapshoot at this point.
So you’ve been doing these rankings since 2005. Are you tired of this?
I’m tired all the time.
That’s probably because you’ve been working crazy hours for months now to get this new ranking out. But as someone who has now covered this industry for seven years, do you think the MBA degree is as valuable today as it once was?
I think it’s moderately less valuable. If you look at salaries—and not just those at the top schools but more broadly—they’ve been stuck at about $90,000 overall for the last five years. They’ve lost some serious ground to even the moderate inflation we have right now. And when you factor in the increased tuition and fees every year, the ROI is dropping. I don’t know where that ends. Does that end with MBAs earning what the fry boy does at my local McDonalds? Or does that change what the MBA becomes and the way it delivers?
We are already seeing changes in the way some schools are delivering the MBA. They are taking basic lectures and moving them online, making the classroom experience be something other than a lecture but more on discussion and case analysis. So if you do that on a big scale, can you reduce the cost of the degree? I would think you could make it available to more people instead of an elite few. It’s becoming something different and it has been devalued a little bit monetarily. I also think it’s been devalued culturally, too. Every time you write a story about MBAs anywhere, there are always haters who seem to pile on.
Do you think the international schools have significantly improved their quality? Are they now a viable option?
I think they are getting better. They are taking a lot of cues from the U.S. schools and are doing a lot of things that U.S. schools can’t do or won’t do. They are really piling on an international student body. Our data shows that the average class is about 80% international. At the U.S., it’s something like 30% to 35%. And there is value is the 80%. I don’t see a critical mass forming. I see entire continents like Africa that don’t really have any management education bandwidth at all.
Lou, did you ever think about getting an MBA degree?
No. I was in journalism. I didn’t see the need for it. I went back to NYU and got a master’s degree in liberal studies and made up my own curriculum there, mainly for the intellectual challenge.
Will the new ranking be on the cover of BusinessWeek this time?
We did in 2010. I think it’s a decision that will probably be made that week as it always is. In 2010, I think we got the newsstand cover but not the subscription cover. They may split it again this year. But we have a good reason to get the cover this year because of all the new things we are doing around B-schools.
It’s about three weeks before you publish. Do you know who the winner is already?
Yeah. And I’m not telling you!
Here is how Bloomberg BusinessWeek is describing its new change in methodology:
“For the first time in 2012, we modified the way the employer survey results are tabulated. First, we calculated the average for the number of times a school was mentioned by employers over the last three rankings, and found the median for all the schools. Where the average number of mentions for a school was greater than or equal to the median value, the recruiter score was unadjusted. When the average number of mentions was less than the median value, the recruiter score was multiplied by the ratio of the average number of mentions to the median number of mentions. By doing so, schools with few mentions that are all highly positive will no longer have an advantage over schools with many mentions.”