Say what you will about the new, completely revamped Bloomberg Businessweek MBA ranking. If your school did well, you’re not asking any questions. You’re celebrating. And if your school unexplainably tanked, you’re wanting to either seethe in anger and disgust or simply ignore the bad news.
While many of the outcomes in the 2018 version of the ranking may be hard to digest, you’ve got to give the editors some credit for trying to do something different. The decision to rate schools on four core dimensions–compensation, learning, networking and entrepreneurship–is a novel to make use of the massive dataset the magazine collects for its now annual list. Those four “indexes” are the foundation of this new ranking and that foundation, as it turns out, isn’t all that solid.
This year, the magazine collected an unprecedented amount of information that went into the project. The list is based on survey responses from 10,473 students, an 11% increase over last year; 15,050 alumni, up more than 50%, and 3,698 corporate recruiters, a fivefold increase from 2017. That big jump is a vast improvement on the puny 5.8% response rate for recruiters last year, resulting in just 686 responses.
Regardless of the sometimes screwy results, millions of potential students will read and be influenced by the ranking. But let’s face it, there are outcomes in this ranking that defy explanation or even common sense. Which business schools were overvalued by this new ranking and which ones were undervalued? Which MBA programs were among the big winners or losers? The answer to these questions will surprise you–and there are many more surprises buried in the data crunched by Businessweek to produce its 30th anniversary ranking of the top 92 U.S. full-time MBA programs.
Here ‘s our top ten biggest surprises:
A Harvard Business School classroom and William & Mary’s Mason School of Business
1. Is the MBA learning experience at William & Mary really twice as good as Harvard Business School?
In almost all MBA rankings, one of the more elusive elements to measure is the quality of the academic experience. There are no GMAT scores, undergraduate GPAs or starting salaries and placement rates to plug into a ranking system when it comes to how good and how innovative is a school’s MBA curriculum. So attempts to get a handle on this come through student and graduate surveys, both subject to self-interested cheerleading from alumni who want to see their schools ranked highly. The differing expectations of students at each school along with the sample size of a school’s respondents can also have a big impact on these results.
Bloomberg Businessweek‘s objective is trying to do this is commendable, but the results are questionable. The magazine’s editors say their new ‘learning’ index is meant to measure the quality, depth, and range of instruction. “We focus on whether the curriculum is applicable to real-world business situations; the degree of emphasis on innovation, problem-solving, and strategic thinking; the level of inspiration and support from instructors; class size; and collaboration,” explained Caleb Solomon, a Bloomberg senior editor.
Which schools meet that test? The answers, at least according to Bloomberg Businessweek, constitute the single biggest surprises of many surprises in this ranking. The magazine’s editors would have you believe that the best three MBA programs are learning are at William & Mary, the University of Utah and the University of Texas at Dallas. We have no beef with the excellence of those MBA programs, but is there anyone in the world, outside of those schools’ stakeholders, who would agree that these programs provide better MBA learning than Harvard, Stanford, Wharton and the rest of the so-called Magnificent 7? We don’t think so.
Yet, the Businessweek data actually shows that William & Mary’s MBA provides a learning environment that is nearly twice as good as that of the Harvard Business School, with William and Mary earning a perfect 100.0 score on the learning index versus Harvard’s 55.8 (see below). Now that is one big surprise.
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University of Pittsburgh’s Katz Graduate School of Business
2. The Most Undervalued MBA Programs In This Years’ Businessweek Ranking
At first glance, many of the numerical rankings assigned to schools by Businessweek can appear to be reasonable. What you really need to do is compare how these programs rank on this list with others. To do that, we took the top 50 schools according to Businessweek and juxtaposed them against Poets&Quants’ composite ranking which brings together all five of the most influential rankings weighted by our own view of each system’s credibility. We looked for the biggest gaps to identify the most undervalued programs by Businessweek.
The gaps expose ranks placed on schools by Businessweek that are clearly outliers. Their ranks are a misrepresentation of the true intrinsic quality of the MBA program at a business school. We consider a five-point gap to be significant enough to state unequivocally that the rank has questionable merit. Discard or at the very least discount what Businessweek appears to be telling you about the quality of the school and its MBA experience.
The most undervalued schools include publics and privates, some that might be on your target list of where to go. They range from such elite private players as Dartmouth College’s Tuck School of Business and the University of Michigan’s Ross School of Business to such stellar publics as Michigan State’s Broad College of Business and Ohio State University’s Fisher School of Business. The biggest gap among the top 50 schools? It’s the University of Pittsburgh’s Katz Graduate School of Business. Businessweek ranks its MBA program a lowly 53 vs. the P&Q composite of 29, a gap of 24 places.
Howard University
3. The Most Overvalued MBA Programs By Businessweek
At the risk of offending a very good group of business schools who are basking in their Bloomberg Businessweek ranking, we have to do the flip side of the undervalued analysis. Naturally, you can look at this in two very different ways. On the positive side, you can argue that Businessweek discovered some hidden value in these programs. On the other hand, because Businessweek’s more upbeat view of these programs runs counter to most rankings you can say that the magazine is just plain wrong.
Adopt whatever perspective you wish to have on this. We believe these business schools are overvalued by Businessweek’s ranking (but also want to remind you that we are still talking about the top 1% of all MBA programs).
We applied the same analysis we used for the undervalued list, looking for the biggest gaps between our composite ranking and Businessweek. The single biggest gap was huge: 61 places for Howard University’s School of Business. Businessweek‘s ranking claims Howard is the 33rd best MBA program in the U.S. The Poets&Quants composite ranking places it 94th.
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For the first time in 30 years, Stanford Graduate School of Business captures the No. 1 spot in the Businessweek MBA ranking
4. After 30 years, Stanford Graduate School of Business claims first place.
Well, it’s about time. For the past 30 years, Businessweek has been ranking MBA programs. Not until this year did Stanford top the list. The school did it by taking first place in three of the four ‘indexes’ of the new ranking, compensation, networking and entrepreneurship, and by also ranking in the top ten on ‘learning.’
It must be said that even though Stanford has consistently reported the highest annual starting compensation in the world and boasts the lowest acceptance rate–a mere 6%–the school tends not to perform all that well on various rankings.
There are several reasons for this, all worth noting now that Stanford has finally climbed into first in this ranking.
1. The school tends to do less well on rankings that survey students or graduates. Despite the fact that MBAs at Stanford get to stroll around in the winter months beneath palm trees in shorts and flip-flops, they tend to be more difficult to satisfy. The former head of Stanford’s MBA program, now dean at Chicago Booth, confirmed this point of view in a recent Poets&Quants interview. “The curriculum there (at Stanford) creates more tension between the students and the administration and the students and what the faculty wants to do,” says Madhav V. Rajan. “There is just less of that here (at Booth). The faculty tend to teach things that they do research on, and the students buy into that in terms of what they want to study so it is a much more aligned place than Stanford.”
2. Stanford also tends to underperform in rankings that deploy recruiter surveys, in part because it’s harder for mainstream MBA employers to recruit and hire Stanford grads. That’s mostly because many want to do their own startups or work for a startup or an early stage company. Or, they want to work in venture capital and private equity which usually means an individual job search. The result is that an already smaller class size becomes smaller still, only to frustrate the mainstream recruiters who fill out these surveys.
3) Rankings that give significant weight to placement rates hurt Stanford because year after year the school lags peers in putting its MBAs in jobs right away. Just 73% of Stanford MBAs had job offers at graduation last year, and acceptances at graduation trailed offers by nine percentage points at 64%. Even three months later, acceptances were only 88% when most peer schools at close or at the 100% number. This is all a function of Stanford MBAs being more choosy about landing the perfect offer, but it is also due to the fact that more Stanford MBAs prefer to spend their summer internships at Silicon Valley startups and early stage firms and then seek full-time offers with more established companies. At most other schools, internships are converted into early full-time job offers that lead to better placement numbers Businessweek‘s new methodology did not put that much weight on placement metrics.
The University of Michigan’s Ross School of Business
5. What U.S. News & The Economist Gives Businessweek Tries To Take Away
One of the leading business schools that seemed to have significant rankings momentum this year has been the University of Michigan’s Ross School of Business. The school cracked the Top Ten in both U.S. News and The Economist.
Ross rose four places in U.S. News to claim a seventh place rank, up from 11th a year earlier—the first time the program had reached the Top 10 in 14 years. In the process, it leapfrogged rivals like Columbia, Tuck, and Yale SOM, thanks to $148K median pay packages and 97% placement within three months of graduation for the 2017 class.
By the same token, Ross, along with Stanford GSB, were the only full-time MBA programs to be ranked among the best in every specialization surveyed by U.S. News. A testament to the program’s top-to-bottom excellence, Ross finished 3rd in both management and operations (and 4th in marketing and accounting).
The school also climbed five places on The Economist list to finish seventh as well on the magazine’s global MBA ranking, up from 11th last year. That made Ross the sixth best in the U.S., behind only Booth, Kellogg, Harvard, Wharton and Stanford, lofty company, indeed.
But what U.S. News and The Economist gave, Businessweek has tried to take away. Ross tumbled a half dozen places to rank a lowly 18th on the 2018 Businessweek list, behind USC Marshall and the University of Washington’s Foster School of Business.
That’s a real surprise and just yet another reason not to put too much stock in this ranking. Under Dean Scott DeRue, Ross is out front in bringing experiential learning to an entirely new level. In 18th place? We not only don’t think so, we know so.
The Darden School of Business at the University of Virginia in Charlottesville, VA. Photo/Andrew Shurtleff
6. The Eight-Place Rise Of UVA Darden
One of the more pleasant surprises in this year’s ranking is the rise of the University of Virginia’s Darden School of Business. The school climbed eight places to move into the Top Ten at a rank of ninth from 17th a year ago. The improvement brings Darden full circle from the original Businessweek ranking in 1988 when the school was solidly in the Top Ten MBA experiences at a rank of seventh.
Back then, Darden achieved its high ranking because the Businessweek methodology put a significant emphasis on the quality of teaching and the engagement of faculty in students. Surveys over many years have shown that the school has the best MBA teaching faculty in the world.
The uptick is well deserved and comes at a good time in the school’s history. The white supremacist protest in Charlottesville last year severely impacted MBA applications, helping to cause a steep 16.7% drop. Dean Scott Beardsley has been successful in raising tons of money for MBA scholarships with the goal of making Darden’s program among the most affordable premium MBA experiences in the world. If anything, the new improved ranking should help more applicants rediscover this gem of a case study MBA program.
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Harvard Business School Rock Center for Entrepreneurship – Ethan Baron photo
7. Do the MBA programs at the University of Utah or Willamette University teach entrepreneurship better than Harvard, UCLA and Wharton?
One of the other big changes in the new Bloomberg Businessweek ranking is an attempt to measure a school’s ability to inculcate an entrepreneurial mindset in its students. In creating an ‘entrepreneurship’ index, the editors explained that “what was once a small slice of an MBA education has spread throughout business school programs. Students now see entrepreneurship as central to their overall training, whether they want to start their own businesses or work at the world’s biggest banks.”
In other words, this is much more than an effort to count startups launched by graduation or shortly thereafter. Instead, it’s an effort to measure how well schools imprint entrepreneurial thinking on their students. Not surprisingly, the school at the top is Stanford’s Graduate School of Business. It’s no coincidence that Stanford boasts the highest percentage of MBAs who launch startups in school. Some 16% of last year’s class–63 of the 392 graduates–started a new business.
On Poets&Quants’ 2018 annual ranking of the Top MBA Startups, Stanford had 27 of the top 100 companies launched by MBA entrepreneurs with the most investment capital. Harvard Business School, by the way, was second with 26 on the list. And in four of the past five years, more than half of all the MBA startups to make the list were founded by graduates from Harvard Business School or Stanford’s GSB.
Based on these facts alone, it would make great sense if HBS were right alongside Stanford on this new index. Instead, HBS doesn’t even make the top 10, just missing it by coming in at 11th place behind Utah, UT-Dallas, Willamette and Colorado, schools that have never had an MBA startup make the top 100. This doesn’t mean they don’t do a good job in entrepreneurship. But it also doesn’t mean those programs do a better job than Harvard. We call that one very big surprise.
But it’s not only Harvard, whose second largest faculty group now teach entrepreneurship courses, that gets short shrift here. No less astounding, Wharton—whose MBAs have launched such highly successful entrepreneurial ventures as Warby Parker and Commonbond, ranks 27th with a score of 61.1—25 places and more than 20 points below Utah.
MBA graduate from Dartmouth’s Tuck School of Business
8. When it comes to having a tight alumni network, Dartmouth College’s Tuck School of Business is hard to beat. So why does Bloomberg Businessweek rank the school 25th in ‘networking?’
By now, you’ll think we are nitpicking the the results of the new index part of the Bloomberg Businessweek ranking–and we are. As we pointed out earlier, the four indexes are the foundation of this new ranking and clearly that foundation is pretty shaky. The networking index is yet another example, even though the top ten schools in this category appear to make more sense. Stanford sits at the top, followed by Wharton, Harvard, Columbia, and MIT Sloan. All of the M7 are solidly represented.
There’s just the glaring absence of the Tuck School of Business which comes in at a rank of 25th and a score of 73.2. For an alternative point of view, just check out The Economist‘s annual survey of current MBA students and recent alumni who are asked to judge the “effectiveness” of their school’s alumni on a scale of 1 (Poor) to 5 (Excellent). In doing so, The Economist is able to measure, to an extent, how engaged school alumni were in mentoring and helping with job searches. Last year, Tuck was second, only to Michigan Ross, which came in 16th on Businessweek‘s ‘networking’ metric.
Truth is, no other school can beat Tuck on alumni support. The participation rate of its annual giving campaign exceeds 70%, the highest level of support for any business school in the world. At most top business schools, annual alumni giving hovers around the 20% to 25% rate. The alumni giving rate is often a proxy for the loyalty and strength of a school’s alumni network. Tuck has long been known for having one of the most responsive MBA alumni of any of the top business schools, partly because of the tight-knit bonds formed among students in a relatively small MBA program in Hanover, N.H.
So how could Tuck end up behind schools that have nowhere near the record participation rate of the school or the high scores it consistently archives in The Economist survey? We’ll come back to our earlier complaint: Greater cheerleading by students and grads of other programs, poor sample sizes, and/or poorly formulated questions that result in answers that lack differentiation. In any case, Tuck’s comparatively weak networking score contributed it’s surprisingly lackluster result in this ranking: the school tumbled a dozen places to 19th from seventh last year.
Matt Slaughter, dean of the Tuck School, has a diplomatic response to all this. “The new ranking methodology utilized by Bloomberg is complex indeed,” he tells Poets&Quants. “While rankings can be noisy and vary greatly from year to year, we at Tuck always value feedback as learning to help make Tuck stronger. To that end, I will mention that we are nearing the completion of a comprehensive core curriculum review, which has already led to exciting enhancements in our first-year programming this current year, and we look forward to sharing more vibrant refinements soon.”
“Tuck belongs among the top full-time MBA programs in the world. Our distinctly immersive and trust-based learning community, talented students and scholar-educator faculty, and extraordinarily loyal and generous network of alumni have long distinguished our MBA program and are key to advancing our mission of educating tomorrow’s wise leaders.” We couldn’t agree more.
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9. The Roller-Coaster Outcomes: The Big Dips
Business school rankings are notoriously volatile. Even though there often are few year-over-year changes at most MBA programs, a school’s rank can experience dramatic swings. Usually, those changes say less about the quality of a program and more about the flaws and limitations of a ranking. They typically occur because the underlying index scores used to determine a school’s rank are clustered so closely together as to be statistically meaningless. So small and often subtle changes, even something as simple as the size of the responding sample, can have bigger impacts than warranted. High annual volatility should breed little confidence in a ranking because those ups and downs fail to reflect any real change in a school’s MBA program.
And when the methodology is revamped, as it was this year, the volatility can be massive. Some 33 of the 84 schools, or nearly 40%, that appear on both this year’s and last year’s lists experienced double-digit gains or falls. That compares to a mere six schools with double-digit changes last year and just 18 in 2016. Leading the parade of 16 double-digit plungers this year? SUNY-Buffalo which lost 32 places and Texas A&M which plummeted 27 spots. The biggest decline to hit a Top Ten MBA program occurred at Dartmouth’s Tuck School which fell a dozen places to rank 19th, from the lofty spot of seventh last year.
10. The Roller-Coaster Outcomes: The Big Climbs
In highly volatile rankings, schools not only go down. They go up. This year, 17 of the schools that had been on last year’s list experienced double-digit gains in their rankings. While they are no doubt celebrating the big ranking improvements, they need to be reminded that what artificially goes up in a big way will ultimately come down for no reason.
The biggest climber this year–Howard University’s School of Business–rose 30 places to rank 33rd, up from 66th in 2017.
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The post 10 Biggest Surprises In The 2018 Bloomberg Businessweek MBA Ranking appeared first on Poets&Quants.
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