How I Would Change MBA Rankings

graduate management education

Sangeet Chowfla, former CEO of the Graduate Management Admission Council, reflects on the business of business education

Rankings are one of the more controversial things in higher education. Institutions generally pan the concept and the methodology (though they are quite willing to promote a good result in their marketing materials). Prospective students cite them as a significant factor in selecting a school to apply to and attend. The bigger the battle for talent, the more important rankings become, and the bigger the controversy about them. In thinking about rankings, I believe that three factors are important to keep in mind.

First, let’s accept that the use of rankings reflects a failure of our ability to communicate the schools’ value proposition. When there is imperfect information, intermediaries arise to fill the gap. Let me illustrate with a crude analogy with restaurants. If we want to go out to dinner in a place (or cuisine) that we are familiar with, we tend to talk about it amongst us and decide where to go. If we do not have enough information (a new location or cuisine), we tend to look elsewhere for that information and rely on “top ten” lists. Business school rankings are no different. The less we know ourselves, the more important they become. Conversely, if we were able to communicate with perfect efficacy (a tall, if not impossible, order to a global audience), Rankings would have limited power or influence.

Secondly, one of the biggest problems with rankings is that they serve too many masters. Are they a signal to students about their educational experience? A rating of research excellence? Career prospects? In mixing different objectives, they risk becoming a less relevant average.

Lastly, rankings ignore the fact that schools may have different missions. I shuttle between homes in Washington, D.C. and Chesapeake Bay. One has business schools associated with universities with global reach and a research tradition. The other has business programs that are regional and are teaching (dare I say training?) oriented. It’s impossible to compare them on a common yardstick.

RANKINGS HAVE THREE DIFFERENT PURPOSES

In my view, rankings have three different, if related, purposes. The first, and most obvious one, is to guide prospective students in their selection decisions. This is what gets the most attention and the audience here is prospective students. Second is the overall level of scholarship within the institution. The audience is the academy itself – faculty and leadership – it’s a recruitment and retention tool for a different audience. The third, less talked about but incredibly important user, is alumni. They are important stakeholders in the business school ecosystem and a high-ranking signal that their past investment – and current giving – is justified. All this plays into that ephemeral notion of the “brand” that impacts all things and is certainly affected by rankings but also many other factors. A brand is also highly contextual, and this sets up the biggest problem with rankings: They fail to consider the context of the institution’s mission or the student’s circumstances.

Babson may be a leader in entrepreneurship, a fact that its #68 rank in U.S. News‘ MBA ranking  does not capture. The Indian School of Business and the Indian Institute of Management may be leaders in India which are not reflected in their 31st and 51st position in the Financial Times rankings. Is the student wanting to be an entrepreneur then going to the #1 school or the 68th rank? Is one who does not want to leave India for whatever reason compromising?

AN ALTERNATIVE VIEW OF RANKINGS

Whatever you think of rankings, they are here to stay. They fill an information gap. And as a society we seem to be obsessed with such lists. That said, we can rethink how they should be structured so that they provide information in a more meaningful manner. To do this, we should go back to lessons from our marketing 101 courses – that customers should be segmented, and products targeted. We should also remove false signals that arise from ordinal rankings, the implication that we can place meaningfully differences between a school ranked 31st nd one ranked 41st.

If it were up to me, I would favor two different systems – a reputational rating and a school selection tool. The former would have three different categories with no summary total (to avoid the current perception that the highest average is best). While exact details would need to be studied further, they would break out as follows.

REPUTATIONAL RATINGS

Academic research – A rating of how an institution contributes to the creation of knowledge. Peer group ratings, doctoral faculty, research excellence, are some of the currently used ranking criteria that would fit into this. These are important attributes of an institution, but it is not clear that averaging the numbers of research faculty with the salary bumps of graduates (see below) has any meaning. Better to keep them separate.

Student experience – A rating of the richness and diversity of the experience that the institution provides its students. Diversity, internationalization, the network, and sustainability are some of the factors currently being used that would be relevant here as should measures of peer group quality (GMAT/GRE/GPA). They speak to what and how the students learn and contributes to the development of their employability, future potential and citizenship.

Career progression – A rating of how the program impacts the career of the student. Immediate factors such as employment at graduation and salary bumps should be married with longer term metrics of career development (alumni success). Recruiter perceptions may also be factors to be considered.

The factors that go into these categories are not an exclusive list but, hopefully, give an idea of the direction of travel.

You will note that I carefully choose the word ratings rather than rankings. I don’t believe that any methodology, however well crafted, can have the level of precision that an ordinal ranking implies. A ratings system – four to five levels should suffice. There will still be debate at the edges but that is perhaps inevitable.

I also believe that we should not have a total rating. The user should be able to decide which of the above factors are important to how these ratings are being used. An external agency does not have to create an overall list and impose its views about what is important, or not.

The best thing about such an approach is that it provides every school with an opportunity to shine. A regional school can still do very well on career progression – employment and salary bumps – or in the student experience even if they do not have a research focus. Similarly, a focus on entrepreneurship can create an exceptional experience for the targeted student even though it may not create the salary bumps that schools creating consultants may be able to provide.

A PERSONALIZED TOOL

Let’s face it, rankings as they exist today, are meaningless to most prospective students. It’s good to know that Chicago Booth is #1 in this year’s U.S. News ranking but, with a mean class GMAT of 729, Booth is only a consideration for less than 10% of the MBA applicant pool. Kudos to Columbia for topping the FT rankings, but the same applies. Even at rank 100, those below the top quartile will have a hard time being considered. Add in other considerations, such as location and cost, and the rankings cease to be a useful tool for the majority of prospective students.

What’s needed is not a global ranking but a personal one. A useful tool for most students to make sense of the myriad of schools and programs so that they can find the ones that suit their own unique circumstance. Such a tool (I hesitate to call it a ranking) would start with a larger database – maybe 500 or even 1,000 programs. They would need to be adequately distributed around the world so that they are not about studying in any particular location but can truly provide meaningful choices – a starting point maybe the total listing of the AACSB, EQUIS, AMBA and major national accreditations. The tool would then allow a user to input their own characteristics. Location, GMAT/GRE/GPA, work experience, desired program type, net cost, etc. The output would be a listing that is contextualized for that individual and hence more useful and actionable. A top 10 for me. A working parent with limited mobility and a reasonable academic background could use it as could a high performing global striver. So could a fresh graduate with limited working experience as well as a mid-career professional. It’s not a ranking of criteria that someone else established, and which may not be relevant to my circumstance, but something based upon what I want. It accepts that students are not homogenous and avoids the implicit arrogance of agencies deciding what is important to all users.

Such a tool should also have a what-if simulator that allows the user to answer questions – a student with limited experience could see what their options are now and how they would change if they continued working for a few more years. Another could war game how different GMAT/GRE scores could change their school consideration set.

Such a tool would be a more useful addition to the ecosystem than the rankings arms race that serves a limited elite and leaves most aspiring students with a feeling that they are compromising because they are not going to a “ranked” school. It would also expand the student pipeline as one of the most common reasons for not applying that I hear is the feeling that they won’t get in. That’s because we only give them 50 to 100  choices, ignoring the breadth and diversity of management education around the globe.


Author and former GMAC CEO Sangeet Chowfla

Sangeet Chowfla led the Graduate Management Admissions Council as president and CEO for nearly ten years from 2014 to 2022. A globally recognized and respected executive with deep experience in the technology, telecommunications, and venture capital sectors, he began his career in New Delhi with IBM/IDM. Chowfla went on to spend 18 years with Hewlett-Packard Co. in Europe, the Middle East, Asia Pacific, and the United States. He culminated his tenure with the company as vice president and general manager of the Inkjet Media Division from 1995-2001. He then moved to Timeline Ventures as a partner in the venture capital partnership. In 2007, Chowfla became the chief strategy officer and executive vice president of the Mobile Services and Global Market Units of Comviva Technologies, a leading Indian telecommunications software company. Chowfla joined GMAC during a period of disruption in the organization and industry. During the last three years of his tenure, he helped to stabilize the candidate pipeline, renewed GMAT exam growth, diversified GMAC’s footprint and ensured a strong financial foundation to enable future investment.

Ruminations Columns by Sangeet Chowfla

What Makes A Business School Attractive To Students

Reports Of The MBA’s Demise Are Greatly Exaggerated

The Value Of Standardized Testing: Don’t Throw The Baby Out With The Bath Water

Why Students Go To Business School & How They Make Their Choices

The Changing Face Of International Student Mobility

Why Diversity Is Essential To The Health Of The U.S. Domestic Student Pipeline

A Decade Of Graduate Management Education: ‘I Love You, You’re Perfect, Now Change’

Business Casual Podcast: Interview with Sangeet Chowfla

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