Does the world really need more MBA rankings?
Fortune, the old, venerable media brand, apparently thinks so.
Today (April 26), Fortune entered the rankings game with a list of online MBA programs, part of an ambitious effort to expand coverage in the higher ed space, a field that Fortune has never devoted any real attention to over its many years as a business media brand. A ranking of full-time MBA programs is planned for this summer.
Latecomers to any new product or service generally are expected to build a better mousetrap, or in other words to add real value to the market. If this first ranking is any indication, Fortune looks more like the mouse stuck in the trap. Based on the measuring sticks the magazine is applying to online MBA offerings, it is apparent that the brand is out of its depth, lacking an understanding of the business education market as well as how to construct a credible ranking. Sure, all rankings are imperfect, even flawed, but these are more than rookie mistakes; they are mindlessly egregious errors of judgment.
Examples: The University of Dayton’s Online MBA program is ranked in Fortune‘s Top 50 in 48th place. That is 144 places better than Dayton fares on this year’s U.S. News & World Report ranking. The long-distance MBA option at the University of West Texas shows up 12th by Fortune’s reckoning, 55 spots above its U.S. News ranking of 67. Kennesaw State’s Online MBA lands nicely in Fortune’s To 25, capturing a rank of 23rd. U.S. News has that program in 94th place, a difference of 71 places. We point these differences out not to embarrass Fortune but to show how these rankings are all over the place, raising big credibility issues.
A RANKING KLUGED TOGETHER FROM A HODGEPODGE OF THINGS
Fortune’s online list is largely kluged together from a hodgepodge of things, many of which have nothing to do with the quality of the online MBA programs the magazine purports to rank. Among other things, the methodology considers B-school alums in senior management jobs of the Fortune 1000. Problem is, that metric has nothing to do with online MBA programs. There’s not a single online MBA graduate in any of those jobs, though this measure is weighted 17.5%.
Even worse, Fortune calculates what it calls a “brand score” based on a survey of “hiring managers and business professionals.” Oops. Online MBA students are already fully employed and largely seek to accelerate their careers where they are. Moreover, few companies directly recruit and hire from online MBA programs. So Fortune surveyed business professionals who are largely unfamiliar with online degree programs. They may know the names of the top business schools but not much else.
No less problematic, Fortune did not ask the responding professionals specifically about online MBA programs but rather business schools in general. You can guess who is at the top of that list: Harvard, Stanford, and Wharton, all of which do not offer online MBAs. Yet, this measure accounts for 20% of the ranking. In other words, nearly 40% of the ranking has nothing whatsoever to do with the quality of a school’s online MBA. That leaves plenty of room for a major shift in how schools might be ranked.
IN FORTUNE’S RANKING SIZE MATTERS, JUST AS IT DOES IN THE OLD FORTUNE 500
The largest portion of the ranking—55%—is based on self-reported school surveys. In this “program score,” Fortune zeroed in on five core metrics, among others that have less weight. Current enrollment, average undergraduate GPA, average class GMAT, graduation rates within three years, and a program’s one-year retention rate.
Sound reasonable? Think again. Awarding points to a program simply based on how large it is makes no sense whatsoever. Size does not translate into quality. The largest online MBA program in the U.S. is at Liberty University, the school founded by Jerry Falwell Sr. in Lynchburg, Va. Just 1% of the enrolled students submit standardized test score to get into the program, and many of them don’t stay. More than one in four students in Liberty’s online MBA program drop out within the first year, and the school’s three-year graduation rate for the program is just 41% And while Fortune is using the latest class GMAT score, it has apparently forgotten that schools requiring standardized tests for admission accept and routinely receive scores from both tests.
Fortune, moreover, awards schools for high GMATs, without accounting for the percentage of students who submitted one. At the number one ranked program, the University of North Carolina’s Kenan-Flagler Business School for example, only 7% of the latest entering cohort had a GMAT. At No. 2 ranked Indiana Kelley, the GMAT rate is nearly five times that level. At No. 3 ranked Carnegie Mellon, 55% of the students submitted a GMAT.
Why does this matter? It would be easy for a school to report higher class GMATs if that number if based on a tiny fraction of the students it enrolls.