The M7 In The FT’s 2015 MBA Ranking

Harvard Business School

Harvard Business School

Business school rankings are all over the place. That’s largely the result of the motivations of the editor who created the methodology that determines how schools are ranked.

Regardless of which schools comes out on top or at the bottom, one lineup of elite MBA programs doesn’t really change. It’s the M7, widely considered to be the best MBA programs in the world.

It’s an arbitrary list as well—-a self-selected group of schools that are always at the top of most rankings. The deans of these institutions meet regularly to exchange ideas and share best practices. So do other members of their senior leadership teams, from the directors of admission to the heads of career management centers.

BREAKING DOWN THE FT RANKING BY THE M7 SCHOOLS

You can quibble whether a few other schools should be included in the M7, most notably Dartmouth College’s Tuck School of Business, UC-Berkeley’s Haas School, or perhaps Duke University’s Fuqua School of Business.

But it’s worth taking a peek at the M7 and how each of those schools fared in today’s Financial Times’ 2015 global MBA ranking. Say what you will about the credibility of this flawed list, but individual components of the ranking shed some rather entertaining insights in how the schools stack up against each other.

First, we’ll show you the overriding results of the FT ranking through recent years and then tear apart several component parts of the ranking to show how the M7 fare. The results are surprising for lots of reasons–but mainly for how they reveal the FT survey to consistently deliver contradictory and head-scratching results. You can start from the very top: Only four of the M7 schools–Harvard, Stanford, Wharton and Columbia–even make the FT top 7. MIT Sloan, Chicago Booth, and Northwestern Kellogg all fail to make the British newspaper’s top seven MBA programs. The FT’s 2015 survey actually places Kellogg 14th.

IF YOU THINK THE OVERALL RANKING IS A MESS, JUST TAKE A LOOK AT THE SUB-PARTS

Drill down further and the results are even more surprising. Although the “alumni recommendation rank” for each of the M7 schools is very high, for example, these elite schools score shockingly low on the FT’s “value for money” ranking or “aims achieved” list.

Exhibit one: Harvard Business School. HBS ranks first in “alumni recommendation,” but is ranked 66th in “value for money” and 84%, whatever that means, for “aims achieved.” The FT, by the way, changed its “aims achieved” numbers from a ranking last year to a percentage this year with no explanation or notice. A year ago, Harvard’s rank on this measure was 50th. Those counterintuitive results make little sense on the evidence. For one thing, Harvard doles out more scholarship money to MBA students than any other professional school in the world, so much so that its tuition is discounted by nearly 50%. Combine that fact with the FT’s own numbers which also show that HBS graduates are paid more than the MBAs of any other school in the world and you have to wonder how is it then possible that the school could rank so low on either value or aims achieved.

In fact, not one of the M7 schools rank higher than the 80s in “aims achieved.” Just ask any of the graduates of these schools if they think their MBA failed to meet or exceed their career expectations. Their answers will bear no relationship to the rank of their schools on this component of the FT list.

THE OVERRIDING LESSON: TAKE ALL RANKINGS WITH A VERY BIG GRAIN OF SALT

Much can be said for the rest of the M7 numbers in these tables. Take apart the FT metrics that make up its ranking and they show nearly non-sensical results. Here’s another one: The FT’s “placement success rank” for Wharton this year is 40, meaning that 39 other business schools in the world were more successful at placing their MBA graduates into jobs than Wharton. Yet, Wharton’s Class of 2014 was among the most successful in its history in both median starting pay and job placement.

So we present this breakdown less for the insight it provides and more for the entertainment and novelty value of the results. The overriding lesson in all of this: Take all business school rankings with a very large grain of salt, especially the ranking from The Financial Times.

  • Perplexed

    Why is Northwestern seemingly so far off the pack (though trending back) but yet on every other ranking F/USN/BW they remain near the top. The obv answer is FT incl more schools w/internationals but even lower ranking US schools that don’t pass Kellogg on most rankings do here, any thoughts on what in FT methodology is diff than other big rankings?

  • Karel Paragh

    Absolutely! Karel Koes Hiranjgarbh Missier Paragh

  • Karel Koes Hiranjgarbh Missier

    Yes, we would just need a tier system! I agree with that, Karel Koes Hiranjgarbh Missier Paragh

  • M7man

    I’m from an M7 school but I should say people respect the M7 schools but I think Asians might work much harder than Americans. If you ask me about innovativeness… maybe it swings the other way around… coming from an Asian American who lived half of my 30 years in Asia and the U.S. each.

  • ivyealie30

    Go to the expensive reisdential areas of Geneva, Zurich, London, Dubai, Mumbai, Hong Kong , Monaco , Shanghai and Sydney. They are all not M7 MBA’s. Plenty of wealth all over and many Euro/Asia MBA’ s have done it.
    Bangalore overtook both London and Boston in VC money raised this year. and 99% were not M7

  • JohnAByrne

    Not at all. Haas is a fabulous school and you won’t be disappointed in the MBA experience there. It’s also more selective in terms of its acceptance rate than most of the M7 schools. I know some applicants want to go to H or S or won’t go at all. I know others who want to go to an M7 or no other school. But the truth is, any of the ranked schools provide a great and solid grounding in business basics and open a lot of doors.

  • Adam

    The top tier is perception, starting w/employers and then students. Start w/the most desirable employers, see where they recruit, and start there. I’ve seen you argue the case for W on it’s financial powerhouse, great faculty, long-standing reputation but the truth is most MBAs care about one primary thing from a top-tier school…a top-tier job (with a minortiy seeking the opportunity to be heavily recruited by startups). You can easily get into a top firm by going as high as USN T20, the M7 offers an easier path yes but the end result is the same. No one is arguing that M7>USN 15-20 just saying that the latter group could very likely be in the same onboarding class as an M7 grad, which is what most top MBAs want in the end.

  • Ben Franklin

    But then the argument would shift towards arguing about how to define each tier and who belongs in it.

  • Ben Franklin

    Of all points made in my comment, that’s the one you chose to poke holes in?…

  • Orange 1

    That is why we need a tier system like someone mentioned below with law schools.

  • HSW

    but why does he only use pictures of HBS? I’ve been at Baker’s library, and frankly the building is not at all impressive. These weird angle or lit up at night photos try to make it seem picturesque, but the building is actually quite ordinary.

  • Ben Franklin

    If John is right in that all rankings have their own flaws and every ranking should be taken with a grain of salt, then what does that say about Poets and Quants’ ranking, which uses said rankings as its own inputs!? Besides, P&Q has its own unique built-in flaw: self-selected manipulation of the weight % attributed to each of its ranking inputs (i.e. USN, BW, Forbes, FT, and The Economist).

    John is right. Everything that you’ve seen should always be taken with a grain of salt. Stick to the facts and go with your gut after visiting each school!

  • apollo440

    Thats a pretty US centric view you have there. I think you will find that the internet was invented by Tim Berners-Lee while the iPhone, iPad, iMac etc. were all designed by Jonathan Ive. Both men are British.

  • GoodLesson

    John, you are right on the money about that “overriding lesson” of taking every ranking with a grain of salt.
    This site seems to be improving in quality and objectivity.

  • MMMMM7

    I would think it’s similar to the T14 in law schools, you go to them because it’s well regarded as the top. Whether they are or not are certainly up for debate and other T10 schools will likely get you in the door to the same firm, the M7 may just offer an easier path. Obviously this is not taking into consideration each school’s strength (W/B/C-Finance, H/K-Gen Management/Consulting, S/M-Tech, K-Marketing) and surely Haas has a leg up in tech over some of the M7 but in general a graduate from the M7 may have a few more options than other grads. This is obviously open to debate but no denying these 7 schools are at least amongst the world’s best.

  • M7_Questions

    Not that the M7 are not prized schools (hope I get into one), but I am not sure that i really believe aside from Harvard and Stanford and perhaps Wharton that any other top 15 +/- or so school wouldn’t lead me to close (if not exactly) to the same general conclusion. Any guiding light here. Just unconvinced that it really matters that I go to an M7. For example, I happen to love Haas, it is my personal dream school after Stanford. If I attend Haas are my hopes seriously harmed for not having attended MIT. I am not talking about a specific job at a specific company but general goals and direction. Just think the M7 is perhaps over-hyped.

  • Adam

    The M7 are well regarded as the best schools in the world, not from publications always but from employers. Nothing against the rest of the U.S. T10 or top international schools but the best and brightest come to M7 from around the globe for one main reason — they offer the path of least resistance to top careers across industries and across borders. The fact these schools are not at least in the T10 highlights the flaws in methodologies of the rankings.

  • Ben Franklin

    I am a bit surprised that the M7 became 7 of the T14 schools.
    The FT can call all of these programs more “global” than various US schools using whatever metric it wants, but the US university system is the global leader in research and most of the leading US schools have become global hubs for business knowledge. US schools have forged close relationships with the most respected MNCs in the US and around the world, which took decades to develop. DECADES.

    These concrete-like reputations don’t change overnight, and the business knowledge transcends borders or languages or geography itself! Mind you, the success of a lot of the US schools came from the growing influx of international students and professors. Foreign alumni give endowment money too and have contributed to rising tuition here (it’s supply and demand driven). International students helped fund and grow the US schools to what they are today!

    The FT can try to bask in the Euro/Asian schools being more “globally-focused” with more “global reach”. If that were the case, then why do more international students and professors (by raw numbers) come to the US to get educated and teach!? I’d imagine that the most successful business people, who have MBAs and live in foreign countries, were probably educated in the US then returned to their home countries. The value of a US education is well established around the world, and people from all over the world pay top dollar to come here to learn. The US is THE MELTING POT OF THE WORLD for God’s/Allah’s/Buddah’s sake!

    Why do all the “leading” Euro/Asian MBA programs have much smaller class sizes, with far smaller endowments, with less overall quality? Naturally, the Euro schools will have a greater percentage of “international students” because there are 28 countries within the European Union, with people who can navigate about the continent freely (while using the same crumbling currency)! It’s simply more convenient. You can’t tell me that the rankings of at least some of these Euro and Asian schools didn’t surprise even you…

    Americans work hard and produce more, with far more efficiency. Period. We’re typing our thoughts on a cell phone via the internet (both created in the US), using freedom of speech (inspired by the US). Let’s chalk that up to our working culture and established business development practices nationwide, or the global financial markets that we helped to establish. LBS is no match for the M7, the other European/Asian schools have a long way to go in order to catch up, and all of the US schools that lost serious ground in the FT Global Ranking deserve a sincere apology!

  • JohnAByrne

    Not crazy at all. Just interesting.

  • Guest

    It looks like the Aims Achieved was a rank in 2014 but it is a percentage in 2015. The range for 2015 is 72% – 91% so all of these schools fall in the middle to high range for that metric.

    Also, the value for money is skewed heavily towards the one year European programs and the fact that they are often about half the cost of a full time US program. I did the ROI calculation for myself during the application process and did see that from a truly cut and dry financial perspective (utilizing opportunity cost and expected starting salary) the European one year programs were better bang for the buck. Ultimately I ended up choosing a two year MBA program because it fits my lifestyle and career goals better.

    As far as the scholarship money, I think that could be incorporated into the calculation but then it would be a stretch to say that this ranking applies to all students due to the fact that scholarships are often awarded to the outliers in terms of diversity and stats.

    I think you are digging little bit here instead of taking the ranking for what it is and what it measures. Is it so crazy that the M7 doesn’t end up 1-7?