That’s particularly true with the maddeningly inconsistent rankings of the world’s best business schools. 2015 gave observers plenty to complain about. It was a banner year for those who consult rankings, with all five of the most watched and most influential lists coming out, including the latest from Bloomberg Businessweek which trotted out a different methodology for the third time in a row. At the same time, you’ll find more rankings than ever, with everyone from Business Insider to the business school event company, QS, elbowing for more attention.
So what are ten best, or at least, most observed, MBA rankings this year? How do they differ? And what were some of the key takeaways? Here is Poets&Quants’ view on the rankings game.
1) Harvard Business School Tops New 2015 Poets&Quants MBA Ranking: Last year, Stanford pulled a major coup, topping Harvard for the first time since Poets&Quants debuted its full-time MBA ranking in 2010. This year, HBS climbed back into the top spot. The P&Q ranking is actually a composite of the top five business school rankings, with each receiving a different weight – U.S. News & World Report (35%), Forbes (25%), Bloomberg Businessweek (15%), The Financial Times (15%), and The Economist (10%). The benefit, of course, is that Poets&Quants’ ranking encompasses a wider range of metrics, while softening the weaknesses of each methodology.
So how did Harvard reclaim the #1 spot? Mainly, the school moved from 8th to 1st in Bloomberg Businessweek’s latest rankings. Just don’t credit BW’s revised metrics, which now gives a 10% weight to both starting salaries and job placement. Harvard finished behind Stanford in both metrics (2nd vs. 1st and 35th vs. 21st respectively). What’s more, Stanford also placed higher than Harvard in qualitative measures like alumni and student surveys. In fact, the only Businessweek metric where Harvard outpaced Stanford was the employer survey (4th vs. 14th). Of course, that accounts for 35% of BW’s ranking – giving Harvard a decided upper hand.
Stanford’s performance was also weighed down by an unwelcome albatross: The Economist’s rankings. Here, the school placed just 11th worldwide – with The Economist’s patchy data making it a tempting target for criticism. For example, is the Stanford faculty, ranked 48th by The Economist, really lower caliber than George Washington and the University of Florida? And how can Stanford rank 95th in percentage of increase on pre-MBA salary when it ranks 1st with Forbes in terms of five-year gain in earnings after graduation? That sounds fishy to us too.
Truth is, Yale was this year’s big winner in Poets&Quants 2015 ranking, jumping seven spots in two years – thanks mostly to big gains in five-year earnings for alumni. Notre Dame (Mendoza) and Michigan State (Broad) also made waves, rising 12 and 10 spots respectively into the Top 25. At the opposite end, Duke (Fuqua), ranked by Businessweek as their #1 program in 2014, tumbled out of the Top 10, just as Northwestern (Kellogg) leapfrogged Columbia and California-Berkeley (Hass) did the same to Dartmouth (Tuck). Even more, the University of Chicago (Booth) replaced Wharton in the Top Three, courtesy of high marks from Businessweek-surveyed recruiters and an eye-popping 97.2% placement rate in 2014 (which will rise to 97.4% with the 2015 Class).
2) INSEAD Claims First in New 2015 Poets&Quants Ranking of International MBA Programs: In the United States, Harvard and Stanford are endlessly tussling for the top spot in business schools. Overseas, INSEAD and the London Business School carry a similar rivalry. For the most part, LBS has consistently edged out INSEAD. That is, until now.
Like our American methodology, P&Q’s international ranking is predicated on four MBA rankings receiving different weights based on the soundness of their methodologies: The Financial Times (30%), Forbes (30%), Bloomberg Businessweek (20%), and The Economist (20%). As with Stanford and Harvard, LBS dominated INSEAD collectively, but was done in by one ranking – The Economist, no less. Here, LBS ranked 9th among international programs, despite ranking first with the Financial Times and Forbes, and second with BW. In particular, LBS was faulted by Economist survey respondents for education experience (placing 79th overall despite ranking 7th internationally in Businessweek’s student survey) and faculty quality (94th – Really?), while being outranked by INSEAD in categories like diversity of recruiters, personal development and educational experience, potential to network, and alumni effectiveness.
Overall, IESE and IE Business School made the most significant moves in 2015, with IESE replacing IMD in the Top 3 and HEC Paris creeping into the Top 5. Notably, IMD dropped in three of four rankings, losing the top spot in Forbes and falling six spots each in The Economist and Financial Times rankings, with the school noticeably slipping in research and placement. That said, IMD still remains among the best international programs for earnings.
3) Stanford Takes First in 2015 U.S. News Ranking: U.S. News may be the cleanest and clearest ranking in the market, balancing quantitative inputs (GMATs and acceptance rates) and outputs (placement rates and starting salaries) with qualitative markers like academic reputation and recruiter assessment. It literally has something for everyone. In 2015, Stanford won out over Harvard based on higher GMATs and GPAs, more selective acceptance rates, and higher graduate placement.
From a big picture standpoint, there was nearly no movement among the best American programs, with only the University of Virginia (Darden) bumping NYU (Stern) out of the Top 10. Don’t expect that to be the case in 2015, where higher graduate earnings and incoming GMAT scores could propel Wharton into the top spot. Similarly, an 11 point bump in GMAT scores could also land Kellogg in the Top Five ahead of MIT (Sloan). And let’s not forget the University of Michigan (Ross), Duke (Fuqua), and Yale, which are just one or two index points below Darden for the 10th spot. As always, there will be Cinderallas like Texas A&M (Mays), which vaulted 10 spots to 27th and the University of Texas-Dallas (Jindal), whose recruiters scores are higher than Tuck, Stern, Ross, and Darden. Such trends should make for a newsworthy year on the b-school beat.
4) Harvard Tops 2015 Financial Times Ranking: Unlike U.S. News and Bloomberg Businessweek, the Financial Times allows international schools to compete with their American counterparts. And boy do they ever hold their own! 10 of the 20 highest-ranked full-time MBA programs are found outside the United States in the Financial Times’ methodology, with the London Business School ranking 2nd, behind Harvard and ahead of Wharton and Stanford. Similarly, INSEAD tops Columbia and IESE bests MIT, Booth and Haas. In a nod to Asia’s emergence, CEIBs places ahead of Kellogg and Yale.
Think of the Financial Times as the most intricate of rankings. Weighted salary and salary increase each account for 20% of a ranking – with research rank adding another 10%. Beyond that, no metric amounts to anything more than 6% of a program’s rank, with variables measured including value for the money, career progress, placement success, alumni recommendations, female students and faculty, international students and faculty, international experience, and percentage of faculty with doctorates. The benefit is that schools aren’t purged based on middling performance in one key area. The drawback, of course, is that schools could lose a spot or two thanks to more obscure rubrics like female board members and languages spoken.
5) Harvard Business School Tops Bloomberg Businessweek 2015 Ranking: Here we are – the ranking that started it all. If you place greater value on opinion over data, Bloomberg Businessweek is the ranking for you. Here, 80% of a school ranking is predicated on survey results with employers, alumni, and students. On the plus side, such sentiments can tip off applicants to changes in how the program is perceived by the marketplace. However, this approach also leaves the ranking vulnerable to wild swings based on who is targeted and how many potential respondents participate. Need evidence? Just look at Yale – a darling in recent b-school rankings. In 2012, the program was ranked 21st by Businessweek. It skyrocketed to 6th last year, but then stumbled back to 11th this year (including ranking 23rd in the existentially significant student survey).
So who was this year’s big winner in BW? Let’s start in Chicago, where Booth and Kellogg ranked 2nd and 3rd (below Harvard). Booth’s strength came in the employer survey and job placement, where it ranked above all other schools. That said, Kellogg earned higher scores in the alumni and student surveys – with Kellogg also finishing a hair higher than Booth in starting salaries.
Sloan and Haas also received good news from BW. Each jumped ten spots into the Top 10. MIT excelled in the employer survey and salaries, reaching the Top five in both. Berkeley, on the other hand, ranked 4th in both the alumni and student surveys. This reflects a customer satisfaction rate that you won’t find anywhere else – except at Rice University (Jones). There, students and alumni ranked the school 2nd and 3rd respectively, indicating that the community loves the Jones experience – and the benefits they reaped afterwards.
6) Forbes’ 2015 Ranking of U.S. Schools: It’s all about the Benjamins with this ranking. The Forbes methodology focuses almost exclusively on Rate of Return. It’s a simple metric really: Forbes surveys alumni from 95 school worldwide, collecting earnings from the first five years after graduation. After factoring in opportunity costs and tuition and fees, Forbes calculates a five year gain in earnings.
Among American schools, Stanford retained its #1 ranking, with the Class of 2010 experiencing a $89,100 gain. That may not sound impressive, so brace yourself for a number that paints a more colorful portrait. These Stanford graduates were also the highest-paid among all business grads, grossing $255,000 on average now. Not to mention, Stanford students endured the biggest sacrifices, passing up $86,000 salaries in 2008 to enroll.
As you’d expect, Harvard ranked second with an $83,500 five year gain. And that’s the cut off point, with Kellogg and Columbia ranking 3rd and 4th at $72,700 and $71,000 respectively. The biggest salaries? Not surprisingly, 2010 Harvard grads were pulling down $239,000 annual paychecks, with graduates from Columbia, Wharton, Booth, and MIT also breaking the $200K barrier. The biggest surprise? Despite collecting $170,000 salaries, Darden grads had gained just $56,600.
7) Booth Tops 2015 Economist Ranking: The Economist is the most maligned of b-school rankings. So it helps to think of an Economistranking as a raucous summer action movie, with plot holes and pointless CGI galore. If you accept it for what it is – pure escapism – you learn to overlook its limitations. Like any summer movie, this ranking has plenty of cool stuff to keep your attention. In this case, you’ll find data points that you can’t find anywhere else like career services assessments, student quality scores, and a diversity of recruiters ranking. Not to mention, the survey captures bedrock data like education experience and alumni effectiveness.
Oh, but the rankings has more absurdities than a Batman flick set on Mars. Forget that Booth has held the top spot in The Economist’s rankings for five of the last six years. At least that’s a defensible rank – and Lord knows their quant-laden curriculum could trip up a governor at the Federal Reserve. But is Australia’s Queensland Business School – unranked by Forbes, the Financial Times, and Bloomberg Businessweek(and 49th among internationals with P&Q) – really better than Duke or Michigan? Is the London Business School just the third-best MBA program in the United Kingdom behind Warwick and Henley? Do Stanford and Harvard actually rank behind Darden and Tuck? To borrow a phrase from ESPN, “C’mon, man!”
8) U.S. News: The Schools Corporate Recruiters Prefer: It’s no secret. Top recruiters flock to the top schools. And it’s easy to understand why. Business schools are the corporate farm system. They weed out the jerks in the acceptance process, ground their first years in the fundamentals, and imbue their students with the right mindset and values. With $100K salaries and million dollar clients and projects on the line, recruiters simply can’t afford risks.
So which business schools carry the strongest track records with recruiters? This summer, P&Q pored over five years of recruiter scores. And we found that MIT, Yale and Texas-Dallas have grown increasingly attractive to recruiters. At the same time, upstarts like SUNY Buffalo and Chapman University are gaining traction with recruiters – often at the expense of higher ranked programs. If you’re wondering where your school stands – and where it’s trending among employers – look no further than this in-depth study of recruiter preferences.
9) Ranking MBA Programs By Credit Ratings (M7 Financial): In any sales pitch, you steer away from the costs, always hyping the thrill entailed in any venture. Well, here’s a dose of reality. You will lose out on two years of income. You probably won’t land a full ride. Come that first Christmas after graduation, those $700 monthly loan payments start coming due – regardless of whether you’ve landed that dream job.
Worried about your risk and exposure? Maybe you should look at your prospects like a credit agency would. Using such a framework, M7 Financial awards schools with a rating ranging from A+ (Modest loan obligation with strong career prospects) to C- (Heavy obligation with moderate prospects). The ratings are based on dividing average debt by average earnings to get a leverage ratio, with a debt service coverage ratio calculated by comparing estimated 10-year earnings with project principal and interest over 10 years.
Your safest bet? Sure enough, it is Brigham Young (Marriott), where average debt runs $27,942 and average pay comes out to $110,216. The biggest risk? That’d be Pepperdine, which earned a respectable B with an $89,245 debt benchmarked against an $80,592 starting paycheck.
10) How A Dean Would Rank Business Schools: You had to know this was coming. Tired of his school being poked and prodded like cattle, a dean would step forward with a new way of ranking business schools. This spring, Columbia Dean Glenn Hubbard shouldered this thankless task.
What metrics does Hubbard value? Forget surveys from students, academics and recruiters. Instead, he suggests that you evaluate the number of applications and yield to gauge the attractiveness of the school. Then, factor in outputs like job offers and salary levels. Seems simple, right? We thought so – and calculated just that. And the results were quite surprising. If you skip all of the fancy statistical sampling and qualitative window dressing, you still end up with Stanford and Harvard on top! Berkeley and MIT move up a few spots as Wharton and Booth slide down. Ironically, Columbia still finishes in sixth place – the same as it did in the Poets&Quants and Bloomberg Businessweek rankings.
Perhaps everyone (even Poets&Quants) really is overthinking these rankings. Then again, maybe the real job of a more complex instrument is to ferret out the nuances to separate a tight pack where no school shows any signs of letting up. Regardless, we’re tipping our hat to Dean Hubbard, who mustered the courage to take his ideas public for analysis and debate. Right or wrong, his ideas started a conversation that continues to resonate.