For the first time since ranking MBA programs in 1988, Bloomberg Businessweek added an entirely new component to its list of the best: an extensive survey of MBA alumni. The magazine asked graduates from the classes of 2007, 2008 and 2009 how their MBA degrees impacted their careers, their boost in pay since getting the degree, and their job satisfaction to date.
Some 12,773 alums responded to the survey, for a healthy response rate of 29.4%. To crank out a ranking based on these alumni surveys, Businessweek then made three essential calculations. It measured the compensation increase over pre-MBA base salary, guaranteed and discretionary additional income earned in 2014, excluding sign-on bonuses. It measured how satisfied alums were with their current jobs and shared a tiny bit of that data publicly (see below). And finally it culled together answers on 16 alumni questions about their MBA experiences, the specific impact their MBA programs have had on their careers, and whether they would recommend their program to others. Each of the three pieces were equally weighted for the alumni ranking, though compensation loomed larger because the differences in pay were in all likelihood greater than the differences in the other survey answers.
The results? Decidedly mixed, for sure–at least when it came to putting numbers aside each school. There is little surprise in who came out on top: Stanford University’s Graduate School of Business was No. 1 on the alumni survey, while Harvard Business School was right behind it at No. 2. But things quickly got dicey. Businessweek’s methodology put Rice University’s Jones School third, something of a surprise result. Fourth was Berkeley’s Haas School of Business and fifth was Emory University’s Goizueta School.
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More compelling, however, are the overall results of the alumni survey. On average, MBAs realized an 81% jump over their median compensation before B-school. After six to eight years, pay typically increased another 64%, to about $169,000 a year. That’s across a wide swath of schools, 103 in total. But these numbers vary greatly according to the school one attends. The highest reported compensation goes to Harvard MBAs who claim to be making $290,000 a year. Stanford GSB alums are not far behind, pulling down $270,000.
How much faith can you put into this alumni ranking? We performed a couple of simple tests to see how frequently the alumni rating lined up with the school’s overall standing in the new ranking, singling out schools that had a 15 point, or 20% divergence, between the rank Businessweek assigned to its alumni survey versus the overall rank given to the school’s full-time MBA program. Our knowledge of scores on similar satisfaction surveys from Businessweek suggest that a 20% difference could be meaningful. Out of the 74 U.S. schools on the BW list, only 13 stood out as unusual.
The schools that may well have challenges with alumni? The University of Chicago’s Booth School of Business is at the top of the list, followed by the University of Minnesota’s Carlson School of Management, UC-Irvine, William & Mary, the University of Michigan’s Ross School, and USC’s Marshall School of Business. At all these schools, the alumni scores significantly underperformed the MBA program’s overall ranking by 20% or more. No. 2 Chicago, for example, had a dismal alumni rank of 27–25 places below its actual ranking. No. 45 Carlson came in with an alum rank of 68.
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What to make of the divergence for these schools? There are only two conclusions: The schools haven’t done enough tending of their alumni networks or Businessweek‘s data is less than reliable. It is, after all, strange to see Chicago Booth, which has been putting greater emphasis on its alumni network in recent years, be so low. The same is true of the Carlson School of Management at the University of Minnesota, a business school that actually has alumni chapters embedded in many of the Twin Cities’ companies. And it’s also hard to accept that USC’s famous Trojan network would not have given the school a big lift in a survey of alumni.
And then you have the schools whose alumni ranks outperformed their overall standings on the new Businessweek list. Consider No. 63 Cincinnati’s Lindner School of Business which had an alumni rank of 44, 19 places higher, or No. 38 Texas Christian’s Neeley School, with an alumni rank of 20, 18 spots better. That alumni survey result, by the way, puts Texas Christian above Wharton, Yale, Cornell, among others.
Here, you can conclude that there was cheerleading among the alumni who filled out the surveys or that these schools really have the love of their alumni. Given these unexplainable results, we’re leaning toward the conclusion that you can’t quite trust the data.