How The M7’s Magnificence Was Tested In 2020

In a year unlike any other, how did the best U.S. business schools — the vaunted Magnificent 7 — make out? In several ways, the data show that 2020 dealt significant setbacks to the M7, as it did to every B-school. But they also show the strength and resilience of the most elite graduate business education programs.

The seven elite schools that make up the unofficial group known as the M7 — Stanford Graduate School of Business, Harvard Business School, the University of Pennsylvania’s Wharton School, MIT Sloan School of Management, Northwestern University Kellogg School of Management, the University of Chicago’s Booth School of Business, and Columbia Business School — did not have yet another great year in what had been a long, unbroken line of them.

Harvard, faced with an avalanche of deferrals, enrolled its smallest MBA class in decades. Four schools saw declines in the number of women enrolled in their MBA programs — one school dramatically so — and two slipped below the 40% threshold. Pay increases for graduates slowed, entrepreneurship numbers fell at five of seven schools (and cratered at HBS from 17% of the class to just 10%), GMAT numbers declined at six of seven schools, and the overall acceptance rate for the group grew, according to a Poets&Quants estimate.

THE M7 HAVE CERTAIN ADVANTAGES THAT ALLOWS THEM TO OVERCOME ANY CHALLENGE

Comparing and contrasting schools by the numbers they provide is often tricky business. That’s because most MBA programs report metrics in a way that is more often than not most favorable to each institution. That is especially true in how schools report under-represented minorities. Harvard, for example, was able to significantly increase the percentage of Black Americans in the class to 11%, higher than the more typical 7% to 9% representation of more recent MBA classes. But the actual number of Black Americans in the Class of 2022 was not all that different, with 52 students out of the 732. More interestingly, HBS reported its URM numbers as a percent of the U.S. citizens and permanent residents in the class and not of the entire enrolled class as Wharton does. That sleight of hand — which, it should be noted, is the Graduate Management Admissions Council industry standard — pushed the Black American percentage from 7.1% to 11% and for Hispanics from 6.1% to 9.0%.

Nonetheless, the M7 have certain advantages that allows them to overcome any challenges, even in an unprecedented year. They have the top faculty, the most pioneering research, constant curricular innovation, networking and employment opportunities, access to capital and influence, and permanent hegemony atop the rankings — when the rankings happen, and when the schools don’t boycott them. It all adds up to a powerful reputation that keeps the top talent flowing in. In short, the M7 schools are where the action is, and everyone knows it — and even amid the struggles of 2020, that helped the schools rack up some notable successes, particularly in turning around one of the biggest concerns of the past few years.

THE UPSIDE: APPS CLIMB, COST CLIMBS SLOWER, PAY KEEPS CLIMBING

That concern? You guessed it: MBA applications.

Like all B-schools in the U.S. and most schools globally, the M7 had been on a years-long downward trend in MBA apps leading up to 2020. The pandemic — which led to extended deadlines, relaxed admissions requirements and at least a perception of lowered admissions standards — sparked a flood of new interest in the MBA that benefited nearly all the top-25 U.S. schools and the leading European and Asian schools, as well. All the M7 schools except Stanford saw year-over-year app increases, and four years of worrying declines were reversed in one cycle for five of the seven; only Stanford and Harvard remain in a deficit compared to their record highs of 2016-2017 (see the table below for details).

Overall, applications to the M7 MBA programs increased 14.6% from 2018-2019. Last year at this time, the schools were reeling from a collective 5.7% decline from 2017-2018. One immediate result was that class size grew at every school except Harvard, and Harvard’s precipitous drop in student population is certain to be temporary, largely caused by the school’s more generous policy of granting a deferral to every admitted applicant who wanted one (see the comments to that effect by Chad Losee, HBS managing director of MBA admissions and financial aid, on page 3).

The pandemic helped M7 students more than it helped the schools. Admits to the M7 saw the cost to attend a program rise at a slower rate this year, with the average increase in price tags between 2019 and 2020 for all seven schools just 1.1%, compared to 2.3% between the previous two cycles. Recognizing the tribulations imposed on students by the pandemic — and the unfairness of raising prices for what has essentially been online MBA classes — MIT Sloan, Columbia, Wharton, and HBS all kept tuition flat, and total cost at Wharton actually decreased. See page 2 for details.

And finally, pay kept inching up for MBA grads of the M7 schools, as P&Q has documented in extensive coverage since the first employment reports began trickling out last fall. All seven schools saw the numbers go up overall, though there was plenty of fluctuation across industries; the biggest improvement came at MIT, where total compensation was up 7.5% for the Class of 2020 compared to their predecessors. At Stanford, it rose 6%. Find more information on page 2, including links to each school’s 2020 jobs report.

WHY WE WRITE ABOUT THE M7

The M7 is not a formal designation. Decades ago, the deans of the seven schools decided to create their informal network to share information and to meet twice a year. But it’s not only the deans who get together. Vice deans, admission directors, career management directors, even PR and marketing folks meet in private sessions, for which the schools rotate hosting duties, business school officials trade gossip, best practices, and whatever topical issues end up on the agenda. And no press releases or formal announcements are ever issued.

Which leads to no end of speculation about these meetings — and jealousy, especially from the deans of schools just outside the M7, who privately gripe about how elitist the whole exercise is. That’s one reason Poets&Quants has done a great deal of “beyond the M7” reporting, examining which schools might constitute a “Second M7” or even S10. And we do this story annually to explore, partly, which schools in the M7 might be excluded based on performance.

From an applicant’s point of view, however, the M7 continues to be the Holy Grail of the MBA kingdom. Every year, there’s a sizable number of applicants who will only apply to the M7 schools or a subset of them, even though there are many other business schools that are just as or nearly as good. Indeed, for some candidates, a case can easily be made why Dartmouth College’s Tuck School of Business, or the University of Virginia’s Darden School of Business, or Yale School of Management, or one of several other elite B-schools might well be preferable to an M7 institution. After all, the cutoff at seven was arbitrary to begin with, and was made at a very different time.

Still, the fascination with this mysterious group and these schools can turn into an obsession for any highly striving MBA candidate. Which is why we’ve put together this comparative look at the M7 players, comparing and contrasting them by everything from GMATs and GPAs to starting salaries and job offer rates. See below for Graduate Record Exam scores, and see the next pages for tables on much more.

DON’T MISS POETS&QUANTS’ COVERAGE OF THE TOP SCHOOLS:

COVID-19 PUTS B-SCHOOLS’ MBA APP PLUNGE FIRMLY IN THE PAST 

ACCEPTANCE RATES AT THE TOP 25 U.S. MBA PROGRAMS

WHAT IT NOW COSTS TO GET A TOP-25 MBA DEGREE

STILL RISING: IN 2020, MBA SALARIES JUST KEPT GROWING

THE 2020 JOB SEARCH: MBA PLACEMENT RATES DOWN ACROSS THE TOP SCHOOLS

YOU KNOW ABOUT THE M7. NOW LEARN ABOUT THE S10