The 10 Biggest Surprises In The Economist’s Strange 2021 MBA Ranking

2) Michigan Ross & NYU Stern: Right Place & Right Time

Woody Allen is credited with saying that ’80 percent of life is just showing up.’

This year, you could say the same rule applies to grabbing a Top 10 ranking in the 2021 Economist ranking.

Yes, Millennials are often derided for a lifetime of collecting ‘participation’ trophies. Maybe they are onto something. Last year, the M7 decided to boycott this year’s Economist ranking. That list even included Chicago Booth, which had ranked #1 for seven of the past eight years. When the herd zigs left, maybe you should zig right. Or, to borrow MBA vernacular, follow a Blue Ocean Strategy that rewards organizations that stake their claim where there is less competition.

That’s exactly what the University of Michigan’s Ross School of Business and New York University’s Stern School of Business did this year.

Talk about a shrewd gamble that paid off big time. Rather than passing on The Economist ranking, as many of their peers did, they opted to participate. Last year, Michigan Ross and NYU Stern ranked 9th and 17th respectively. This year, they are the proverbial big fish in a drained pond – ranking 3rd and 4th. Yeah, maybe there is an asterisk attached to the top performers this year. Then again, Michigan Ross and NYU Stern were among the few top-flight American schools that weren’t afraid to expose their pandemic-wracked numbers. That demonstrates a confidence in who they are – not to mention a transparency about where they shine and where they fall short. Maybe that shows a greater commitment to the students they’re recruiting too. 

In Michigan Ross’ case, the program ranked as the top MBA program this year for Personal Development, Alumni Effectiveness, and Educational Experience, according to the Economist‘s student and alumni survey. It also ranked among the five best for Culture and Facilities too. NYU Stern performed best in outputs, topping all comers in Post-MBA Salary – though its top 5 scores in Potential to Network and Educational Experience reflects that their students are well-paid and happy. 

Then again, Michigan Ross and NYU Stern weren’t the only MBA programs that reaped the rewards of showing up. Carnegie Mellon’s Tepper School and the University of Washington’s Foster School also cracked The Economist’s Top 10 in 2021 (after ranking 31st and 20th last year, respectively). Tepper placed among the top 10 in such key areas as Career Services, Salary, and Faculty Rating. By the same token, Washington Foster ranked among the ten-best in 10 measures, including Salary, Faculty, Post-MBA Pay, and Alumni Effectiveness. 

Are their rankings artificially inflated by the absence of Dartmouth, Duke, Harvard, and Haas? Maybe – but their inclusion may also be a sign that these programs – all underrated even before these rankings – might warrant a second look….and even a campus visit (Post-COVID, of course). 

3) The MBA Bump Revisited: Harvard & Stanford’s Absence Don’t Matter

One of the more curious and yet entertaining attributes of The Economist‘s ranking come from parsing what’s under the hood from the student and alumni surveys. Among other things, the magazine gathers data on pre-MBA salaries and then alumni salaries which allows it to essentially rank MBA programs on the difference between the two. So you can determine the impact an MBA has on a person’s base pay. The Economist gathers this data not from schools which never report pre-MBA pay nor the salaries of alumni–the numbers add a bit more context to the impact of an MBA on income. A minimum response rate—equivalent to 25% of the latest intake or 50 students/alumni (whichever is lower)—is required for schools to be included in the ranking.

While the data hardly captures the full value of an MBA which would occur over one’s entire professional career, it always confirms that the top schools–most of which obviously bowed out this year–are rarely if ever at the top in delivering the biggest MBA bumps. That’s largely because the top-tier schools more often than not attract already successful young professionals who are already earning salaries well above average for their age. So the increase these graduates achieve in their salaries are not nearly as great in percentage terms as their lower-ranked rivals. Last year, for example, Stanford’s MBA program ranked a dismal 72nd. Harvard was even worse at a rank of 80th. Pre-MBA salaries of Harvard MBAs in 2019 hit a record $108,303!

Of course, HBS and GSB grads are more likely to receive larger signing bonuses, other guaranteed first-year bonuses and perks, and even stock options which are not considered in these calculations. Nonetheless, on base salary, most of the schools that participated in this year’s Economist ranking beat the bigger brand schools hands down.

According to The Economist, the school that delivers the biggest MBA bump in salary is the Indian Institute of Management at Ahmedabad where the boost in base pay is nearly 300% (see table below). That’s because incoming students at the school leave jobs with salaries that average only $11,269. After they graduate and are alums, their average salaries jump 296% to $38,063. Right behind IIM, however, is Michigan State, Rochester, Penn State and the University of Georgia.

While the magazine puts rankings on these increases and also provides data on pre- and post-MBA pay for alums, the percentage increases don’t always correlate with the rank assigned each school. We have no idea why this would occur but want to point out this discrepancy as you peruse the salary numbers in relation to the ranks.