Rankings illustration from the new graphic novel on MBA admissions by Menlo Coaching
It was 30 years ago when Businessweek magazine published its first ranking of full-time MBA programs. It was the first of the five most influential MBA rankings, quickly followed by U.S. News and well before The Financial Times, Forbes, and The Economist got into the act.
The anniversary ranking from what is now Bloomberg Businessweek will go public on Thursday, Nov. 8th. That’s when the magazine will unveil its updated list on 93 U.S. programs, with a global ranking of 124 business schools to follow on Dec. 11th of this year.
The newest ranking will unleash a wealth of new data for students and administrators to absorb and assess. It will be 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.
30 YEARS AGO ONLY 20 U.S. SCHOOLS WERE IN THE DEBUT MBA RANKING
Thirty years has made a lot of difference. In the first ranking, roughly 3,000 MBA graduates from just 23 U.S. business schools were surveyed and 1,245 responded for a response rate of about 42%. Only 265 companies which recruited at a third or more of the schools were surveyed. Some 112 responded, a response rate of 42%.
The recent MBA graduates who completed the debut survey, however, did not know it was being used to rank their schools so there was little to no cheerleading in their responses. For the corporate survey, only the manager of the company’s MBA recruiting function was asked for his or her perspective. The result: Only companies that literally make the MBA market were included and each had just one voice.
Now Businessweek surveys every recruiter who visits a campus and many of them are alumni of the schools from which they recruit. The vast majority of them have little to no basis to compare and contrast hires from a wide variety of schools. Their responses are so biased in favor of their alma maters that Businessweek concedes that on average they score their own schools 15% higher than other schools. In the newest methdology, the magazine is making “djustments for this bias based on the number of alumni recruiters and the degree of bias seen.”
TOP FIVE IN 1988: KELLOGG, HARVARD, TUCK, WHARTON & JOHNSON
The far more limited debut ranking placed numerical ranks on the full-time MBA programs at 20 U.S. business schools. Northwestern University’s Kellogg School of Management led the list, followed by Harvard Business School, Dartmouth College’s Tuck School of Business, the University of Pennsylvania’s Wharton School, and Cornell University’s Johnson Graduate School of Business.
In last year’s Businessweek ranking, only two of the five orginal schools were in the top five: Harvard in first and Wharton just behind it. MIT Sloan took third place, the University of Chicago’s Booth School of Business was in fourth, and Stanford’s Graduate School of Business was fifth. Kellogg had slipped to eighth place, Tuck to seventh, and Johnson to 13th.
In recent years, Businessweek has gone back to the drawing board to alter its methodology on several occasions, causing widespread angst and frustration among deans and administrators. Those methodology tweaks have led to dramatic changes in the year-over-year ranking of schools, having little to do with the actual quality of an MBA program or the impact of MBA education on either students or corporate recruiters.
EXPECT YET ANOTHER RESHUFFLING OF BUSINESS SCHOOLS ON THE NEW LIST
With the 2018 ranking that comes out in two days, there are several big changes that will undoubtedly lead to yet another reshuffling of the business school list. For the first time ever, Bloomberg Businessweek will produce a global MBA ranking, comparng U.S. and international business schools on the same list. Up until now, Businessweek has published separate rankings for U.S. and international MBA programs.
In a Nov. 1 email—obtained by Poets&Quants—Businessweek revealed that it has created four “indexes” that group the answers to its surveys under broad categories: Compensation, Learning, Networking, and Entrepreneurship. “Each school is ranked in order for each index, as well as in our overall rankings,” explained Bloomberg Senior Editor Caleb Solomon in the email.
Over the summer months, Businessweek had told schools it would have “indexes” on Transformation and Diversity, but the editors decided to eliminate those two categories and add Entrepreneurship. “We took out the Transformation Index because after repeated visits with schools and others, it became clear that transformation meant many different things to different people,” adds Solomon.
CHANGES ARE THE RESULT OF A LENGTHY LISTENING TOUR
“We cut the Diversity Index because we weren’t satisfied that the data we collected on the on-campus climate for underrepresented groups were comprehensive enough to support a separate index and component of our overall rankings. Meanwhile, survey respondents told us that Entrepreneurship was among the most important elements of a business school education, so we added it as an index.”
The changes are the result of a lengthy listening tour by Businessweek editors. Solomon says editors visited 15 business schools, interviewed representatives from schools around the world, and met with many at its New York headquarters.”In total,” he adds, “we spoke with 43 schools. Based on our conversations, we created an interactive ranking to help potential students make what ultimately is a highly personal decision.”
Weighings, a critical component of every ranking, were determined not by the editors, according to Solomon, but by survey respondents. “Rather than assign weightings ourselves, as most rankings do, we took an approach recommended by several of the business schools we spoke with: Let the stakeholders decide,” explains Solomon. “To do this, we surveyed students, alumni, and recruiters to learn what was most important to them. Their answers determined the weightings of each of our new indexes. Then, based on our survey results and compensation data, we calculated overall rankings.”
WEIGHING COMPENSATION, NETWORKING, LEARNING & ENTREPRENEURSHIP
Businessweek is putting 38.5% weight on compensation, 27.9% on networking, 23.1% on learning, and 10.5% on entrepreneurship. Solomon explains that in networking, Businessweek is attempting to measure “the quality of networks being built by classmates; students’ interactions with alumni; the successes of the career-services office; the quality and breadth of alumni-to-alumni interactions; and the school’s halo, or brand power, from a recruiter’s vantage.”
Much of these and other things have been measured in the Businessweek ranking from the very beginning. This year, it’s just more complicated and more confusing than ever. The networking index, for example, includes metrics that would fit more neatly into pay and placement, including assessments of a school’s career services office and recruiter opinion of a school’s “brand power.” What those two assessments have to do with networking is anyone’s guess.
In the learning index, the magazine is trying 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.”
PAY & PLACEMENT WILL GET GREATER WEIGHT IN THE NEW RANKING
And finally in entrepreneurship, Businessweek is hoping to measure how central entrepreneurship has been to students’ overall training, “whether they want to start their own businesses or work at the world’s biggest banks.”
Each of these indexes mashes together a variety of data, often from different sources. For compensation, for example, Businessweek is placing a 25% weight on survey questions and the remaining 75% on figures provided in surveys and year-old employment reports from business schools (even though 2018 data is pretty much available).
The 75% component consists of median salary after graduation (weighted 30%), median alumni current salary (22.5%), percentage of students seeking employment who were employed within three months of graduation (11.25%); percentage of students reporting salary information who received a bonus (5.625%), and median sign-on bonus (5.625%). For non-U.S.-based schools, local compensation figures were converted into U.S. dollars on or near the data collection cutoff date, but salaries were not adjusted for purchasing power parity.
This approach puts significantly more importance on pay and placement. Last year, the rough equivalent of this category placed a 30% weight on these metrics vs. this year’s 38.5%. It weighed starting base salaries, adjusted for variations across industries and regions, at 10%, the increase in alumni compensation above pre-MBA levels 10%, and job placement three months after commencement at 10%. By deciding against using purchasing power parity and dropping last year’s region adjustment, non-U.S. schools will likely lose standing when Businessweek combines all the schools in the new global ranking in December.
MAKING SAUSAGE IS NEVER PRETTY
In other categories, Businessweek is a bit more vague, offering no percentage breakdowns on weights, something that will presumably be disclosed when the ranking is published. Instead, Solomon provides a rather convoluted explanation for how much emphasis is placed on each metric in an index based on what he calls “factor responses.” Just how Businessweek is making this new sausage of a ranking may not be all that reassuring but making sausage is never pretty.
“Factor responses were reasons for attending business school (for students and alumni) or hiring qualities (for employers),” writes Solomon. “Each survey taker was asked to rank up to five factors most important to their school experience. The factors were tied to one of the four indexes. For example, the ‘quantitative skills’ factor from the employer survey was linked to the Learning Index. Once factors were selected, survey takers were asked how well they agreed or disagreed with a statement associated with that factor. For example, students who stated that they attended business school ‘to develop my quantitative skills’ were then asked how well the school delivered on that particular factor.
“Survey takers were also asked to agree or disagree with a series of statements—presented to all respondents regardless of which unique factors they chose—which in turn were tied to a particular index. For example, all students were asked to agree or disagree with the statement, ‘The location of the campus makes it easy to engage with alumni and recruiters,’ which was tied to the Networking Index. The No. 1-ranked response for each factor was assigned 5 points, with assignments of 4, 3, 2, and 1 point(s) to the respective runners-up. These points were used to weight each index.”
WHAT KIND OF RANKING THIS MIX WILL PRODUCE IS ANYONE’S GUESS
Phew. That is hard to parse and even more difficult to assess, but it gets even more complicated. “Further weighting was applied to reflect the selections by alumni as most important, then employers, and finally students,” explains Solomon. “Bloomberg’s reporting shows that alumni, fully immersed in the workforce for several years, have the best vantage point for rating their business school. Employers know what they’re seeking and are thus given the second-highest weighting. Students, emerging with their first post-MBA jobs, are just beginning to grasp the impact of their experiences.”
It gets worse. “Stakeholders’ responses were tallied and averaged. For the Learning, Networking, and Entrepreneurship indexes, the averaged scores were adjusted based on the weighting of the stakeholders outlined above.” Most components, he adds, were scored on a linear one to five scale.
What kind of ranking this system will produce is anyone’s guess. But you can imagine that there will be as much if not more volatilty in this year’s ranking than ever due to these changes. Advice to deans and other business school administrators: Treat yourself to a generous pour of your favorite wine before consuming the results. It will certainly make this latest assessment a bit more digestible.
DON’T MISS: WHARTON, MIT GAIN BIG IN 2017 BUSINESSWEEK MBA RANKING or BIG CHANGES IN THIS YEAR’S BUSINESSWEEK’S RANKING
The post What To Expect In This Week’s Businessweek Ranking appeared first on Poets&Quants.
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