U.S. News Best MBA Program in 2018: Chicago Booth

11 SCHOOLS THAT HAD BEEN UNRANKED LAST YEAR MADE THE NEW LIST

As is often the case, there were some wild swings in the ranking, generally impacting schools that are further down on the list. In all, 15 schools that remained on the ranking had double-digit increases or decreases, even though little changes occurred in those MBA programs. The biggest plunge was sufferred by North Carolina State University’s Poole College of Management in Raleigh. That school’s full-time MBA program dropped 35 places in a single year to end up at a rank of 92nd from 57th (see Big Winners & Losers In 2019 U.S. News MBA Ranking).

The biggest gainer, not including the new schools on the list, was Case Western Reserve University’s Weatherhead School of Management in Cleveland. Weatherhead climbed 22 spots to place 55th from 77th only a year ago. Those roller-coaster results are the result of a ranking system with underlying index scores that are closely clustered together in a way that makes numerical rankings statistically meaningless in many cases.

As many as 12 schools turned over, meaning there are a dozen MBA programs on this year’s list that were unranked the previous year. The highest ranked new entries include the full-time MBA programs at the University of Kansas, which placed 73rd, No. 78 Howard University, as well as American University and Chapman University, tied for a rank of 79. The newbies replaced just as many programs that fell off the ranking.

WHY THE U.S. NEWS METHODOLOGY HURTS STANFORD

Another perennial surprise in this year’s ranking is the relatively low ranking for Stanford’s Graduate School of Business. Though Stanford’s MBA program is generally regarded as neck-and-neck with Harvard for being the best in the world, U.S. News’ methodology does not favor the school which placed fourth this year. Though Stanford’s admissions standards top every other school, with the lowest acceptance rate of any prestige MBA program in the world at 5.7%, Stanford suffers from comparatively weak placement scores.

Only 63.9% of Stanford’s MBAs had jobs at graduation last year, the lowest level of employment for any top 30 business school. Three months after commencement, fewer than 90% of Stanford MBAs were employed at 87.6%, lower than any other top 25 school. U.S. News interprets those stats in the most negative sense, assuming that Stanford grads are having trouble finding jobs with their MBA degrees.

In truth, the degree is so valuable and the school’s graduates are so self-confident that they routinely search for the perfect post-MBA job. For many Stanford grads that means an independent search for a job with an early stage company or startup that doesn’t recruit many MBAs. Those searches don’t fall neatly into a recruitment calendar to satisfy U.S. News’ job metrics.

WHAT A RANKING CAN MISS

The result? Those low placement scores pretty much cancel out the highest average GMAT for any prestige MBA program (737), the highest undergraduate GPA (3.74) and the lowest acceptance rate. Stanford also loses out on the way U.S. News calculates pay. By not including other guaranteed compensation or equity awards (and Stanford grads are far more likely to get stock options or stock with their jobs than most other MBAs), Stanford also is at a disadvantage in the ranking.

According to U.S. News, Stanford grads had the second highest average salary and bonus behind only Wharton. In truth, MBA pay at Stanford last year was the highest ever reported for any MBA grads because the average other guaranteed comp came to $83,065, Average expected performance bonus added a whopping $71,946 more. Add those together with salary and bonus and the average first-year compensation for a Stanford MBA last year was a rather remarkable $227,768. That’s a big difference from the U.S. News salary and bonus average of $159,440.

All of this is a reminder that rankings often under- or over-value even the tangible attributes of a business school education. And they often fail to capture the intangible benefits of an MBA experience that could be far more valuable than what a methodology can measure. The unmistakeable takeaway? Take the U.S. News ranking, and all rankings for that matter, with a very big grain of salt.

(See following pages for the full ranking and how it compares with previous years)