After A Decade Of Nitin, Is Harvard Business School Worse Off?

Harvard Business School Dean Nitin Nohria will leave his job after a ten-year stint with his school having the worst MBA ranking it has ever achieved. When Nohria assumed the job as the tenth dean of HBS at the beginning of this decade, the school was ranked first in a dead tie with rival Stanford Graduate School of Business. Today, it is a lowly sixth behind Stanford and Wharton,  Northwestern’s Kellogg School of Management, Chicago’s Booth School of Business, and MIT’s Sloan School of Management.

Is Harvard Business School really worse off than it was when he took over the school?

It’s a question worth asking given the lackluster performance of what many consider to still be the world’s preeminent business school. And it’s especially worth asking in view of the fact that Harvard MBAs consider the U.S. News ranking the most influential of all the annual lists that rate MBA programs. Some 74% of the responding students said they consulted the ranking while applying to business school, while 46% said the publication’s rankings influenced their school choices. The school has also fallen in Poets&Quants’ latest composite ranking to its lowest level in ten years. HBS won top honors back in 2010 when Nohria moved into the dean’s office. It now ranks fourth behind Stanford, Booth, and Wharton.


A careful examination of Nohria’s achievements makes Harvard’s rankings slide even more confounding. 

After all, he raised more money for the school—$4 billion—than any other business school dean in history. His fundraising success brought the school’s endowment to record levels. He smartly poured tens of millions of dollars of investment to bring Harvard to the forefront of online education with an excellent portfolio of certificate programs. He made incredible progress on gender equity, putting more women in leadership jobs than any previous HBS dean, recruiting more women to faculty positions and enrolling more women as MBA students. He led the most consequential revamp of the school’s MBA program, and for the first time since Harvard started the first MBA program in 1908, Nohria has partnered with other university schools to launch new degree programs. If his record of accomplishment was marred by anything, it was his self-acknowledged failure to do more to promote racial equity for which Nohria has publicly apologized.

Yet, none of those achievements are reflected in any of the metrics used by U.S. News to crank out its annual ranking. Harvard’s decline, the largest of any top 25 MBA program last year, was the result of a drop in a majority of the key metrics U.S. News employs to rank business schools. HBS fell in five of the eight data points, including employment rates at graduation and three months later. Most of the changes last year were small, if not inconsequential, but the best schools are closely bunched together in rankings so slight changes can result in outsized differences. 


Harvard Business School Dean Nitin Nohria

A few examples: The average class GMAT fell three points to 728 from 731. And after two straight years of application declines, Harvard’s acceptance rate rose to 11.5%, up from 10.4% a year earlier. Don’t expect a turnaround in these stats when U.S. News publishes its new data next year because unlike most other schools, HBS failed to participate in the surge of MBA applications because its final application deadline occurred before the COVID outbreak. Harvard did away with its round three deadline years ago and did not extend any flexibility to applicants during the pandemic.

Then, there are the school’s pay and placement stats. Harvard MBAs employed at graduation in 2019 fell to 77.3% from 79.1%, while grads employed three months after commencement declined to 88.5% from 89.3% (those stats are even lower this year due to COVID). U.S. News’ peer assessment survey of deans and MBA program directors slid to 4.8 from 4.9 on a five-point scale with five the best possible score. That one metric alone is worth a quarter of the methodology.

Even though average salaries and sign-on bonuses for Harvard MBAs increased by 3.5% last year to $164,872, HBS grads now trail six other business schools in that basic pay measure: Wharton ($172,016), NYU Stern ($168,291), Stanford ($168,226), Dartmouth Tuck ($166,251), Virginia Darden ($165,292), and Columbia Business School ($164,945). In 2010, when Norhia became dean, HBS led all schools in average salary and bonus at $144,750. U.S. News, however, does not measure other guaranteed compensation nor stock awards, both of which are likely to be factored in overall pay at Harvard. Pay and placement account for more than a third of the weight in U.S. News’ ranking, exactly 35%, more than any other measure.


So how to interpret the school’s fall under Nohria? Over the past ten years, more of Harvard’s peer schools have put an outsized emphasis on GMAT scores that have allowed them to close the gap with HBS or even surpass its average numbers. The greater focus on standardized tests has helped other schools make rankings gains, even though there is no evidence that higher scores result in either better students or more successful alumni. On some level, you actually have to applaud Harvard for not playing the GMAT/GRE game and for enrolling students under a more holistic admissions policy.

The decline in employment rates at HBS reflects the level of confidence graduates have in their degrees. They are less willing to settle for a job they don’t really want and more likely to hold out for something that is a near-perfect fit. Yet, the U.S. News methodology penalizes the school for just that.

What about the drop in salary and bonus? On the surface, such a decline could be alarming, suggesting that the market is less willing to pay top dollar for a Harvard MBA. But it can just as easily be explained by the career choices of the school’s graduates or simply the increase in international students under Nohria. Many of the graduates from outside the U.S. return to their home countries at pay levels that are less than what MBAs get in the U.S. In fact, in the most recently published employment report, international graduates taking jobs abroad earned about $25,000 less than their classmates who landed positions in the U.S.


One of the most important issues for any institution of higher education is resources, and there is no question that the Harvard Business School has more resources than any other school and, indeed, many universities. Money—whether in an endowment or in annual unrestricted giving—allows a school to hire the best faculty, employ top programming support staff, recruit the best students, and have the most comfortable and up-to-date facilities. Yet, for all the money Norhia has brought in as dean, there is not a single nod to resources in U.S. News’ methodology or, for that matter, any of the most influential rankings of MBA programs in the world.

And of course, a dean doesn’t get credit in an MBA ranking for new buildings, for online initiatives that are responsive to the changing needs of the higher education marketplace, for reaching out to the broader university to create new interdisciplinary programs. And with the exception of the Financial Times ranking, a dean doesn’t earn any ranking plaudits for putting more women in leadership positions in a school’s history, or for recruiting and hiring more female faculty or enrolling more women students. Yet, all of these accomplishments are certainly exemplary. But they count for nothing or very much next to nothing in MBA rankings.

None of this means that rankings don’t matter. They certainly do. Harvard’s own MBA students acknowledge that they used U.S. News’ rankings to research business schools and ultimately choose one over another. But rankings often are not an accurate reflection to assess the leadership of a school or university. That’s a point well worth remembering when you peruse the next list of schools put out by any publication.


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