3) Why Stanford Keeps Beating Harvard In MBA Rankings

If there’s been one consistent trend in the past five years in elite MBA rankings, it’s the fact that Stanford Graduate School of Business keeps besting Harvard Business School. This year Stanford topped Businessweek‘s list for fourth consecutive time. Even the adjusted ranking by Anjani Jain keeps the GSB at the very top. How come?

On Businessweek‘s metrics, Stanford is ahead of Harvard on starting compensation, learning, networking, and entrepreneurship–four of the five categories used by the magazine to rank MBA programs (see below). Only on diversity, arguably the most flawed category of a highly flawed ranking does Harvard best Stanford which, ironically, has taken a pioneering lead among business schools on diversity and inclusion.

Across several other rankings, it’s more of a mixed bag, though the latest U.S. News MBA ranking puts HBS fifth, behind Stanford which was third. Poets&Quants‘ composite ranking has Stanford in first place, well ahead of Harvard which languishes in fifth place.

While few applicants would decline an invite to HBS, the school trails its peer group on a number of key metrics. The average salary and bonus for Harvard’s MBAs last year was $172,774, lower than seven other U.S. business schools, including Cornell ($173,185) and the University of Virginia’s Darden School of Business ($176,167). It was also well below New York University’s Stern School of Business whose MBA grads last year posted an average salary and signing bonus of $181,803, higher than any other school.

Harvard’s job rate last year of 69.0% was abysmal, the lowest of any Top Ten school and well below Wharton’s 89.9%, Chicago’s 88.7%, and Michigan’s 88.2%. The placement rate three months after graduation was little better at 92.3%, the second-lowest for a Top Ten school behind only UC-Berkeley’s 88.3%. Just as surprisingly, HBS also trailed key rivals in three core admission metrics: admit rate, undergraduate GPA, and average GMAT. The school’s acceptance rate of 12.5% last year was up from 9.2% a year earlier and more than double Stanford’s 6.2% and behind MIT Sloan’s 12.1%. Harvard’s class average GMAT score of 727 was behind six other schools and tied with Northwestern Kellogg. The undergraduate grade point average of Harvard’s MBAs of 3.69 also was behind both Stanford (3.78) and Kellogg (3.70).

No wonder, Harvard loses to Stanford when candidates are admitted to both MBA programs.

4) A Sizable Rise In Index Scores Begs Questions

You’ll probably notice a regular motif in P&Q’s analysis of Bloomberg Businessweek’s ranking. Call it what you will: transparency, openness, clarity. Translation: We’re not exactly sure what is being measured. With Bloomberg Businessweek wiping past rankings off the net, we’re all the more skeptical.

Alas, there were a few index scores that P&Q saved – and they reveal an uncomfortable trend. Let’s start with the Learning index Scores in the M7 from 2021:

MBA Program	2021 Learning Index	2022 Learning Index	Difference
Stanford	74.8	89.0	+14.2
Harvard	55.4	88.1	+25.7
Chicago (Booth)	59.6	87.2	+27.6
Northwestern (Kellogg)	59.0	87.5	+28.5
Columbia	56.8	86.4	+29.6
MIT (Sloan)	33.0	87.2	+54.2
Wharton	17.9	83.0	+73.1

Imagine that: Every M7 school – considered the bar for American graduate business education – experienced substantial improvement in the Learning survey with students and alumni. MIT Sloan more than doubled its index scores – and the Wharton School more than quadrupled theirs. Who knew that such established and revered programs had so much room for improvement? Why, it’s almost miraculous! It almost makes one wonder what changes – that readers can’t see – were made to the questions being asked of survey participants or how differently did Businessweek calculate the results?

What’s more, these improvements didn’t necessarily improve these programs’ ranking. Despite Learning accounting for a quarter of Bloomberg Businessweek’s ranking weight – and Wharton’s Learning score skyrocketing by 464% -- the school rose just two spots overall to 7th. To add insult to injury, a 73 point improvement in Learning only meant that Wharton improved from 77th to 71st in the category – not exactly the improvement you’d expect. Guess you could say that a rising tide lifts all boats. Just too bad you can’t see the undercurrent below it with Businessweek.

You’ll also find scores suspiciously rose in Entrepreneurship over the past year:

MBA Program	2021 Entrepreneurship Index	2022 Entrepreneurship Index	Difference
Stanford	100.0	90.7	-9.3
Harvard	66.0	84.2	+18.2
Chicago (Booth)	71.4	81.9	+10.5
Northwestern (Kellogg)	59.3	81.1	+21.8
Columbia	62.1	77.8	+15.7
MIT (Sloan)	67.4	81.6	+14.2
Wharton	59.1	78.2	+19.1

Mind you, the difference isn’t as pronounced as Learning – and Stanford GSB actually lost points from its perfect index the year before. Still, it begs the question: How did the M7 get so much better in the 2022 survey? What’s more, did non-M7 programs enjoy similar improvements? Too bad Bloomberg Businessweek doesn’t leave a trail to compare these numbers. Call them the Men In Black of MBA rankings: flash a bright light and you forget all about BW’s previous rankings. They cover their tracks well.

Beyond Learning and Entrepreneurship, the 2022 rankings produced index numbers that were more in line with expectations. In Compensation, all M7 programs lost index points. However, none saw their scores lose double digits (perhaps the result of 75% of the Compensation index being based on hard data). MIT lost 9.3 points, while Stanford GSB fell by 8.8 points in a category accounting for 37.4% of the ranking weight.

Otherwise, M7 schools posted losses ranging from 5.5 to 7.7 points. Networking tended to be more scattershot than Compensation. Stanford GSB and Northwestern Kellogg lost 11 and 9.5 points respectively in this measure, while MIT Sloan gained 10.1 points. By the same token, Harvard Business School gained 0.1 of a point, while Wharton shaved off 0.4 of a point. The same goes for Diversity, where 5 members of the M7 saw index score improvements, which were led by Columbia (+10) and Northwestern Kellogg (+8.8).

In the end, the question remains: why were index scores for Learning and Entrepreneurship so divergent between years – at least at the M7 level? Was this a correction that would make the previous year’s results dubious? That point should be something to watch for BW’s 2023 MBA ranking.