What To Expect In This Week’s Businessweek Ranking

PAY & PLACEMENT WILL GET GREATER WEIGHT IN THE NEW RANKING

And finally in entrepreneurship, Businessweek is hoping to measure how central entrepreneurship has been to students’ overall training, “whether they want to start their own businesses or work at the world’s biggest banks.”

Each of these indexes mashes together a variety of data, often from different sources. For compensation, for example, Businessweek is placing a 25% weight on survey questions and the remaining 75% on figures provided in surveys and year-old employment reports from business schools (even though 2018 data is pretty much available).

The 75% component consists of median salary after graduation (weighted 30%), median alumni current salary (22.5%), percentage of students seeking employment who were employed within three months of graduation (11.25%); percentage of students reporting salary information who received a bonus (5.625%), and median sign-on bonus (5.625%). For non-U.S.-based schools, local compensation figures were converted into U.S. dollars on or near the data collection cutoff date, but salaries were not adjusted for purchasing power parity.

This approach puts significantly more importance on pay and placement. Last year, the rough equivalent of this category placed a  30% weight on these metrics vs. this year’s 38.5%. It weighed starting base salaries, adjusted for variations across industries and regions, at 10%, the increase in alumni compensation above pre-MBA levels 10%, and job placement three months after commencement at 10%. By deciding against using purchasing power parity and dropping last year’s region adjustment, non-U.S. schools will likely lose standing when Businessweek combines all the schools in the new global ranking in December.

MAKING SAUSAGE IS NEVER PRETTY

In other categories, Businessweek is a bit more vague, offering no percentage breakdowns on weights, something that will presumably be disclosed when the ranking is published. Instead, Solomon provides a rather convoluted explanation for how much emphasis is placed on each metric in an index based on what he calls “factor responses.” Just how Businessweek is making this new sausage of a ranking may not be all that reassuring but making sausage is never pretty.

“Factor responses were reasons for attending business school (for students and alumni) or hiring qualities (for employers),” writes Solomon. “Each survey taker was asked to rank up to five factors most important to their school experience. The factors were tied to one of the four indexes. For example, the ‘quantitative skills’ factor from the employer survey was linked to the Learning Index. Once factors were selected, survey takers were asked how well they agreed or disagreed with a statement associated with that factor. For example, students who stated that they attended business school ‘to develop my quantitative skills’ were then asked how well the school delivered on that particular factor.

“Survey takers were also asked to agree or disagree with a series of statements—presented to all respondents regardless of which unique factors they chose—which in turn were tied to a particular index. For example, all students were asked to agree or disagree with the statement, ‘The location of the campus makes it easy to engage with alumni and recruiters,’ which was tied to the Networking Index. The No. 1-ranked response for each factor was assigned 5 points, with assignments of 4, 3, 2, and 1 point(s) to the respective runners-up. These points were used to weight each index.”

WHAT KIND OF RANKING THIS MIX WILL PRODUCE IS ANYONE’S GUESS

Phew. That is hard to parse and even more difficult to assess, but it gets even more complicated. “Further weighting was applied to reflect the selections by alumni as most important, then employers, and finally students,” explains Solomon. “Bloomberg’s reporting shows that alumni, fully immersed in the workforce for several years, have the best vantage point for rating their business school. Employers know what they’re seeking and are thus given the second-highest weighting. Students, emerging with their first post-MBA jobs, are just beginning to grasp the impact of their experiences.”

It gets worse. “Stakeholders’ responses were tallied and averaged. For the Learning, Networking, and Entrepreneurship indexes, the averaged scores were adjusted based on the weighting of the stakeholders outlined above.” Most components, he adds, were scored on a linear one to five scale.

What kind of ranking this system will produce is anyone’s guess. But you can imagine that there will be as much if not more volatilty in this year’s ranking than ever due to these changes. Advice to deans and other business school administrators: Treat yourself to a generous pour of your favorite wine before consuming the results. It will certainly make this latest assessment a bit more digestible.

DON’T MISS: WHARTON, MIT GAIN BIG IN 2017 BUSINESSWEEK MBA RANKING or BIG CHANGES IN THIS YEAR’S BUSINESSWEEK’S RANKING