Few business school deans will weep over the death of The Economist‘s ranking, even those who sometimes benefited from the magazine’s inconsistent and unpredictable results. But there is a reason why business schools should not celebrate The Economist‘s decision yesterday to abandon its rankings of MBA programs, Executive MBA options, and Master’s In Management programs.
Even though this ranking is arguably the weakest of the most influential and consulted lists of MBA quality, The Economist brand bestows a certain gravitas on business education. Its world-renowned imprimatur reminds readers and prospective students of the importance and the value of graduate management education. The magazine’s decision to walk away from primary coverage of the field is as much a sign of the industry’s possible maturity as it is an indication to abandon a much-ridiculed product in its stable.
There will be some observers who will point out that The Economist’s decision signals the end of business schools being the “it” institution on a university campus, the school with the greatest demand from prospective students and the school which awards its faculty the richest awards outside of medical school. Former Yale School of Management Dean Edward ‘Ted’ Snyder has said he believes today’s “it” school is now in computer science, not business, given the impact and riches that go to savvy, ambitious young professionals in technology.
The criticism that led The Economist to withdraw from rankings has been levied at other recent rankings as well at Bloomberg Businessweek and at Fortune magazine. “B-school rankings are going through increased criticism from all flanks, more than ever before, and do not enjoy the credibility they once had,” notes a top European business school dean. “The current Financial Times ranking is not exempt: its ranked categories do not fit the spirit of our times -our graduates commitment to entrepreneurship, sustainability, or the social impact of business, just to name a few.”
In any case, the many critics of rankings often overlook what these annual lists do for business education. Beyond the more controversial issue of which school is number five and which is number 20, rankings remind readers of the absolute importance of going back to school to learn new skills, expand your mind to new opportunities and ideas, and enhance your ability to effectively lead others. In short, a good deal of the popularity of business degrees–whether it is the MBA which is still the most popular graduate degree in the U.S. or a master’s in management–can be traced to the vast coverage afforded business schools by the likes of The Financial Times, The Economist, Bloomberg Businessweek, Forbes, and U.S. News & World Report.
The Economist Rankings, Though Flaky, Bring Prestige & Attention To Business Education
Every time one of these news outlets, with their sizable and influential audiences, publishes a ranking, it is broadcasting to the world that a degree in business holds great value to those who earn one. Frankly, it is the best possible advertisement for graduate management education, a third-party affirmation that business education is consequential. Business education matters. That message is sent to the nearly one million readers of The Economist print edition, more than a million premium digital subscribers, over 10 million monthly unique visitors to its website, and 2.8 million readers of its emailed newsletters. Across its social media platforms, it reaches an audience of more than 57 million, including 13 million followers of The Economist on LinkedIn, the number one global professional platform.
Obviously, not all of those users will consult the ranking. But every year, they will be reminded that The Economist considers business education to be so critical to society and industry that it will devote considerable resources to cover it, thereby engaging what is perhaps the world’s most influential audience of decision- and opinion-makers.
Sure, the results of its rankings can be mind-boggling (see Another Mind-Boggling MBA Ranking: The Economist’s 2022 List) or Wild Changes In The Economist’s New 2021 MBA Ranking). Those outcomes caused INSEAD, London Business School, Oxford and Cambridge, IE Business School in Spain, and Imperial College London to refuse to participate in the magazine’s newest 2022 ranking.
‘They Broke Up With Us Before We Got A Chance To Break Up With Them’
More schools were likely to follow their lead. As the dean of a top European business school told Poets&Quants: “They broke up with us before we got a chance to break up with them. After the extraordinary volatility and rankings that just didn’t make sense, we had all but decided not to participate anymore, joining several of our European peers.”
Adds another prominent official at a major European business school that has bowed out of the magazine’s MBA ranking: “All stakeholders felt that The Economist ranking was a rollercoaster: unpredictable, flawed and arbitrary: an improper survey for a publication of such prestige. They criticized its volatility and miscalculations. The last MBA ranking was published, then corrected, then published again. That, along with badly managed timings, delays of months post-pandemic, led to schools pulling out.”
The Economist‘s editors seem to have been aware of the flakiness of their ranking, notes Anjani Jain, deputy dean of the Yale School of Management. After all, the introductory paragraph of its methodology page suggests: “Rankings are little more than an indication of the MBA market at a particular moment. They reflect the prevailing conditions such as salaries, jobs available and the situation at a school at the time the survey was carried out. Results of rankings can be volatile, so they should be treated with caution. The various media rankings of MBA programmes all employ a different methodology. None is definitive, so our advice to prospective students is to understand the ethos behind each one before deciding whether what it is measuring is important for you.”
“To describe the ranking as a momentary indication of the market is an extraordinary statement,” notes adds Jain. “While acknowledging the flakiness, the statement seems to shift the blame entirely–that the rankings change so much from year to year is not our fault; it is the market! I think finally the managing editors realized how embarrassing this ranking was for a magazine of the Economist‘s caliber. What they may not realize is that assessing the quality of academic programs requires the highest journalistic standards of inquiry and understanding.”
‘Small Sample Response Biases Caused High Volatility
As it turned out, these rankings were not up to the standards of excellence demonstrated by The Economist’s superb editorial coverage of economics and business. “Any ranking that exhibits this much year-over-year volatility reveals its unreliability and invalidity because stakeholder perceptions of academic institutions–their reputation, quality, the value of credentials, job prospects, etc.–don’t change nearly as rapidly,” says Jain. “The high volatility, therefore, suggests that: (a) the factors (and the corresponding weights) used in the ranking are not good measures of what the ranking seeks to capture, and (b) even if the factors are valid measures of what the ranking seeks to capture, they are beset with large measurement errors (due to small-sample response biases) that cause high volatility.”
This leads us to another critical point: Instead of killing its rankings, The Economist could have invested the time to improve the methodology of its rankings to give them greater credibility and ensure a wider following. That would have been the harder and more expensive decision to make. For The Economist, it may have restored the commercial value of the rankings to serve readers and potential advertisers.
Despite the peculiar results, The Economist also brought some unusual value to the rankings game. “Though their MBA ranking was prone to volatility, it placed the student experience at the heart of the methodology and tried to measure many of the aspects of an MBA that matter most to future applicants,” says Matt Symonds, co-founder of Fortuna Admissions, a leading MBA admissions consulting firm. “Rather than quantifying research output, the number of PhDs on the faculty roster, or relying on business school deans to compound market perceptions, The Economist methodology focused on the classroom experience, the network of students, career outcomes, and client satisfaction.”
‘Does Every MBA League Table Have To Include The Same Ten Schools At The Top?’
Symonds concedes that “there were plenty of results that raised eyebrows – the little-known school from Monaco rubbing shoulders with INSEAD, or a dynamic MBA in the mid-west that challenged the supremacy of the M7. But does every MBA league table have to include the same ten schools at the top? The heavyweights of the Dow Jones have changed greatly in the last 20 years. Why should MBA rankings be static – not from year to year but over a five- to 10-year period? With an approach that differed from the others, the annual snapshot provided by The Economist had something to contribute.
“They also engaged many international business schools from Canada and Latin America to Europe. the Middle East and Africa and Asia-Pacific,” continues Symonds. “With such wide-ranging worldwide study intentions, I applauded this global mindset and inclusion. My other great disappointment is the loss of the EMBA and MiM rankings. Ten years ago I encouraged the then business schools editor at The Economist to consider a MiM ranking that would ensure this very popular graduate management degree was not limited to a single FT MiM ranking each year. To make informed life-changing decisions, potential students need more than one league table with the inherent limitations of any ranking. So I would urge The Economist to reconsider their decision, and also continue to provide valuable editorial to capture the voices, insights, and experiences of senior staff, faculty, students, and alumni from business schools big and small.”
The death of these rankings should therefore be greeted with some level of disappointment. “Rankings matter,” notes David Bach, dean of innovation and programs at IMD. “They provide prospective students with important information on one of the most important decisions they will make in their lives. They give schools feedback on what they do well and what they can do better. And they play an outsized role in how Deans and their tenures are assessed. That’s why it’s so important that the underlying methodologies are sound, that rankings compilers invest the necessary resources to properly collect and compute the data, and that the whole process is as transparent as possible. It’s clear that a lot of work remains on this front.”
DON’T MISS: ANOTHER MIND-BOGGLING MBA RANKING: THE ECONOMIST’S 2022 LIST or 10 BIGGEST SURPRISES & INSIGHTS IN THE ECONOMIST’S 2022 MBA RANKING
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