Ten Biggest Surprises In Businessweek’s 2021 MBA Ranking

4) Taking a hard look at diversity

This year Businessweek added a new component to its approach to ranking business schools: race, ethnic and gender diversity. There are many ways in which business schools assemble a diverse class of students. The work backgrounds and experiences students bring to the classroom is paramount. So is the mix of international candidates who often share very different perspectives on business challenges. But so is race, ethnicity and gender which is what Businessweek is focused on in creating an overly complicated formula for measuring diversity.

The diversity evaluation, which is weighted 8.6%, rewards schools for recruiting both minority students and women, with additional weight given to underrepresented minorities. The editors explain it this way: “The context within which we launch the Diversity Index is the historic national reckoning on race that was triggered by the killing of George Floyd. Our mission in rolling it out is to assess and rank B-Schools based on the degree to which they are addressing the institutional racism and discrimination that have excluded certain minority groups and women from U.S. MBA programs.”

If you don’t like getting into the weeds, just skip this paragraph, though we think it quite relevant and controversial. Businessweek decided to “adjust” the minority percentages in this metric on any minority group’s presence among GMAT test takers. The magazine then identifies what it deems to be “overrepresented minority groups” versus those that are “underrepresented.”  Black and Hispanic students are underrepresented. Asian Americans are overrepresented. So Businessweek decided to give schools more credit for URMs than for ORMs. The magazine does this by applying a multiplier to the percentage of a minority group’s presence in a school’s student population. The percentage of Blacks is multiplied by 1.7 and given greater value than the percentage of Asian Americans whose percentage is discounted by giving it a multiple of 0.4. In other words, Businessweek believes that a Black MBA student should be valued at 4.25 times an Asian American in a business school classroom. While we agree that business schools need to do a better job recruiting Black and Hispanic MBA students, applying a subjective formula that is blatantly biased against Asian Americas is not the way to do it.

The results of this effort are surprising, to say the least. It is a major reason why Howard University, ranked third in diversity by Businessweek behind North Carolina State and George Washington University, zoomed into the Top 25 for the first time ever. While it’s good to see a Historically Black College and University (HBSC) in the top mix, you could easily argue that the school is less diverse than most business schools. After all, according to Businessweek’s own data, there are zero percent white, Hispanic and Asian American students at Howard. That wouldn’t meet anyone’s definition of diversity when those races make up 85.3% of the U.S. population. So you can justifiability argue that Howard has the least diverse MBA population of any ranked business school in the world, with the exception of a few schools in India.

Ahead of Howard on Businessweek‘s diversity index is North Carolina State and George Washington University. N.C. State has all of 77 full-time MBAs; George Washington has 112. No less crucial, these are small programs that draw locally and regionally–not nationally or globally. With a higher percentage of underrepresented minorities in North Carolina and Washington, D.C., it makes sense that their MBA programs would naturally attract a higher percentage than schools with international reputations. But that does not necessarily make them better MBA programs. And that is the perplexing problem with Businessweek‘s new diversity index.

it’s also important to make a distinction between diversity, literally the mix of students, and inclusion, a student culture where differences are respected and valued. One goes hand in hand with the other. You can have an amazing mixture of people from different work and undergraduate backgrounds, far-flung geographies, races and ethnicities of all kinds, and close to a gender balance, but if those alternate perspectives and opinions are not embraced, it’s pretty worthless.

Less interesting, perhaps, than Businessweek‘s view of how schools actually rank on this metric are the underlying stats that are used to create it, particularly ethnic breakdowns.  You will find out that Syracuse University’s MBA program has the most white students (91%), along with Case Western Reserve (88%), Kentucky (86%), and Minnesota (85%). Baruch in New York City has zero percentage of Black MBA students, while Blacks at Boston College make up a mere 1% of the MBA population. These Certainly, these schools need to make the recruitment of underrepresented minorities a major initiative. Diving into the stats you’ll find out that white students at Wharton are now a minority, accounting for 48% of the MBA student population. Wharton is the only M7 school where that is true (see table below). You’ll also discover that Harvard has done a better job than Stanford at enrolling Black and Hispanic students, even though Businessweek accords Stanford a slightly better diversity ranking.

While diversity is a priority for most U.S. business schools these days, it’s also a difficult challenge. And it’s not only about race and ethnicity. This initial attempt to measure it by Businessweek fails miserably.

5) Can Michigan Get Any Love?

“I work hard (he works hard) every day of my life
I work 'til I ache in my bones
At the end (at the end of the day)
I take home my hard earned pay all on my own
I get down (down) on my knees (knees)
And I start to pray
'Til the tears run down from my eyes
Lord, somebody (somebody), ooh somebody
(Please) can anybody find me somebody to love?”

Freddie Mercury, Queen

All that work…and Ross still can’t get any respect. They are the Bob Uecker of business schools…always expecting an upgrade to the front row, only to be dumped in the nose-bleed upper deck. You have to feel for Ross. 13th in Bloomberg Businessweek? Even if it is a four spot improvement, it doesn’t feel like it is enough. That’s because Ross is a blueprint Top 10 MBA program: strong in leadership, deep in resources, loved by students, and laden with experiential programming.

Some intangibles just don’t translate to rankings, you could say. 

Alas, Bloomberg Businessweek isn’t alone in underestimating Big Blue. U.S. News also valuated them at 13th. The Financial Times lists Ross at 21st, questionable until you realize they were 30th the year before. On the plus side, Ross finished 3rd in the 2021 Economist MBA Ranking. Of course, this doesn’t account for the opt outs: Harvard, Stanford, Wharton, Chicago Booth, Northwestern Kellogg, MIT Sloan, Columbia, Dartmouth Tuck, Berkeley Haas…you get the picture.

At the very least, you can’t call Michigan Ross lazy. They are constantly tinkering, never satisfied, pushing the edge wherever they can. Every year, they are trotting out some new experiential program.  In recent years, they’ve rolled out the Living Business Leadership Experience (LBLE), where student teams run a division of an established company — divvying out roles ranging from sales to supply chain. When COVID wiped out internships last year, Ross responded by partnering with alumni to start a Consulting Corps to give the students experience. There are student-run funds galore, along with a Crisis Challenge that puts students in c-suite roles to manage a fast-moving pressure situation. Of course, you can’t forget MAP, the Multidisciplinary Action Projects program that Ross perfected long before action-based learning came into vogue. 

And you’ll find all of this in one of the United States’ largest and decorated research universities. Then again, Ross can easily stand on its own. In U.S. News’ annual survey of business school deans and MBA directors, Ross ranked among the ten-best in 8 of 12 specializations, tying it with Stanford GSB (and being just one Top 10 finish shy of Wharton). While Michigan Ross boasts excellence in disciplines across the board, it offers one additional benefit. Ann Arbor is regarded as the quintessential college town: friendly and safe, full of trees and paths — and just an hour from Detroit, straight down I-94. 

So where did Ross fall short with Bloomberg Businessweek? It did rank 7th for Networking and 15th for Compensation. Still Ross was sunk by finishing 40th in Learning, a surprise given that Ross notched the 4th-highest score in Culture and Classmates when The Economist surveyed students and alumni last year. That’s not the only contradictory data coming out Ross’ ranking. Last fall, Ross ranked 3rd overall in P&Q’s Entrepreneurship Ranking, which applied a robust methodology grounded in 10 data points. In Bloomberg Businessweek, Michigan Ross ranked 32nd, behind such decorated startup factories as the University of Mississippi, Willamette, and Florida International. 

To channel Bob Uecker, Ross gets no respect at all. Strike that. Bloomberg Businessweek has no clue at all.