Turning the Tables: Ranking the MBA Rankings~转

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Forbes says the full-time MBA program at the University of Stanford is best. BusinessWeek say it’s the University of Chicago. U.S. News & World Report has yet another answer: Harvard Business School and Stanford in a dead tie. Say what you will about the lack of consensus on what constitutes the best MBA program in the U.S., but at least three different areas of the country—east, west and mid-west—can claim a No. 1 business school. Meantime, British-based publications seem to prefer MBA-granting institutions not based in the U.S. at all. The Economist claims the best school in the world is IESE in Spain, while the Financial Times begs to differ, preferring London Business School in its backyard. When The Wall Street Journal did an annual ranking, it often put Dartmouth’s Tuck School at the top.

Or just take the ranking of any prominent school at random and puzzle over the disparities among them: One of the finest business institutions in the world is the University of California’s Anderson School in Los Angeles. Yet, The Economist ranks it 50th behind Boston University. BusinessWeek ranks UCLA’s business school 14th, U.S. News & World Report gives it a 15th rank, and the Financial Times puts it at 33.

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How is it possible that the five major rankings of business schools all have different winners at the top? How can they rank a single school, such as UCLA, so differently? Chalk it up to the differing ways each publication cranks out its list of the best.  The different methodologies employed for these rankings have as much if not more to do with where the schools place rather than the actual quality of the institution or the MBA experience.

The general problem with most rankings is that they measure what is easy to count, largely statistics on average GMATs and GPAs, starting salaries and bonuses, rather than what really matters. The latter is harder to get at, but essentially what is more important is whether you think the cost of the degree is worth the time and effort. Was the teaching quality superb? Did you learn as much from your fellow students as you did from the faculty? Did the coursework prepare you for a successful career? Do you feel the alumni network will help you throughout your professional life? Did you create friends who you will keep for the rest of your life? Did the degree enrich you far beyond the monetary rewards? Those are questions that few rankings tend to measure, yet those are the important questions.

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By searching the web, you’ll find lots of other rankings besides these five major rankings. (The Wall Street Journal stopped ranking full-time MBA programs in 2007.) Ignore them. Often, they’re put together by people with an axe to grind against the big five or by others who are trying to sell you something. The theory is simple: If you don’t like these results, you put together your own ranking. That’s been done by faculty who want to reward academic research over teaching quality and MBA salaries, and that’s been done by consultants or others who are clamoring for attention to sell you something. As imperfect and flawed as the five major rankings are, they represent legitimate and good faith efforts by conscientious journalists who cover higher education day in and day out. They are looking for what they perceive to be the best ways to measure the quality of a business school education.

Which leads us to an inevitable question: How would you rank the rankings? First, an admission: I created BusinessWeek’s ranking 22 years ago. At the time, the BusinessWeek list was the first major MBA ranking and its approach was unique. BusinessWeek ranked the top MBA programs by surveying recent graduates and corporate recruiters. We asked the questions that had rarely been asked before. A few examples: “Did the professors convey enthusiasm for what they taught?” “In classes taken with popular or distinguished professors, how would you rank their accessibility after class?” ”Were you given a way of thinking or approaching problems that will serve you over the long haul?” “Did you have the feeling that your teachers were at the leading edge of knowledge in their fields?” “What percentage of your classmates would you have liked to have as friends?” These are questions that get far closer to the quality of the MBA experience than a median GMAT score for an accepted applicant. Until the BusinessWeek survey debuted, rankings relied primarily on the opinions of B-school deans, faculty, or top executives who were asked to name the top programs—even though they often had only indirect knowledge of many of the schools—or merely ranked schools on available statistical data.

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That first BusinessWeek ranking in 1988 upset the traditional order of things. Northwestern University’s Kellogg School beat out both Harvard and Stanford. Dartmouth scored high, taking sixth place. Yale, often in previous Top 20 lists, failed to make the ranking because of dramatically poor grades from recent graduates. Over the past 22 years, through 11 separate rankings by BusinessWeek, Kellogg has claimed the number one spot the most, five times; Wharton is second with four No. 1 rankings by BusinessWeek, and Chicago’s Booth School of Business is next, having won the top spot twice, in the last two consecutive polls.

Many years have obviously passed since I had any involvement in the rankings and I left BusinessWeek’s employ at the end of 2009. Through all those years, however, I’ve maintained a curious interest in the world of business education. I’ve visited the campuses of well over 100 business schools. I’ve interviewed hundreds of deans, faculty, and students. I’ve also studied the core competition. Here’s my two cents on how the best stack up against each other.

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1. BusinessWeek. The granddaddy of the MBA rankings, BusinessWeek’s Best-B Schools list made its debut in 1988 with what was then a radical approach to judging the quality of a school: pure customer satisfaction. It was the first to systematically survey recent MBA grads and ask them about their satisfaction levels with their educational experience and the first to ask corporate recruiters their opinions of the MBAs they interview and hire. To adjust for possible one-year bias, BusinessWeek includes in its ranking the two previous MBA grad and recruiter surveys. Why is it still the best? Because it puts otherwise unavailable information in the marketplace to help people with a very important career decision. Applicants can weigh the commonly available information—from average GMAT schools to median salaries—on their own, without the subjective weighting of a journalist. The BusinessWeek ranking is crystal clear in what it measures: How well the schools serve their two primary markets, students and their ultimate employers. Over the 11 rankings published by BusinessWeek in the past 22 years, only three schools have been at number one: Kellogg topped the list five times, Wharton did it four times, and Chicago has been number one twice.

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In recent years, BusinessWeek has since added an intellectual capital measurement, which gets 10% of the overall weight in the ranking. This latter survey examines the contributions of faculty in 20 academic journals as well as book reviews of faculty books in The Wall Street Journal, The New York Times, and BusinessWeek. The ranking is published every other year, in October, in even-numbered years. So the next list will be published in October of 2010. BusinessWeek ranks the top 30 business schools and then lists without a numerical ranking another 15 “second tier” schools. The latest top five in the lineup:

1.University of Chicago (Booth)
2.Harvard Business School
3.Northwestern University (Kellogg)
4.University of Pennsylvania (Wharton)
5.University of Michigan (Ross)

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Pro: The ranking does not rely on less reliable data from schools which are under pressure to report information in the best positive light. It does not include such factors as GMAT scores, undergraduate GPAs, or starting salaries, but makes the case that discriminating graduate students and the companies that hire recruiters are in the best possible position to judge the quality of a school. Its survey of MBA recruiters also is the most credible in the marketplace, largely because BW invests a great deal of time in finding the one person in every organization that hires business school grads who is responsible for MBA recruitment. BW also weights the opinions of recruiters based on how many MBAs they hire—a process that takes into account the valuable experience of the companies in the MBA market. Moreover, BusinessWeek does not try to stretch the data it gathers and rank more than 30 schools. Instead, it creates a “second-tier” group of schools, acknowledging that differences among those schools are statistically inconsequential.

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Con: It’s an entirely U.S.-centric list that excludes some very good schools outside the U.S. (BW publishes a separate list of the top ten international schools using the same methodology). It’s also possible that a graduating class of MBAs, knowing that their answers will affect the ranking of their school, may be encouraged to report more positively on their experience than is warranted. The upshot: very small differences in MBA opinion could affect a school’s standing. BusinessWeek clearly knows this is a possibility because the magazine employs statisticians who “use a series of statistical analyses to test the responses for patterns that have a low probability of occurring if the students are answering the questions honestly.” If foul play is suspected, the surveys are tossed out of the calculation. There are many indicators of quality, such as GMAT scores of incoming students and post-MBA compensation that are not included in this ranking.

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2. Forbes. The magazine has done six biennial lists based on a simple but important metric: the return on investment MBA grads have achieved after five years in the market. Stanford tops the latest ranking because the median salary of an MBA from the Class of 2004 was $225,000, highest among U.S. rivals. Forbes figures that the typical Stanford student from that class paid $235,000 to get the degree, a sum including two years of forgone compensation as well as tuition and fees. What’s ideal about the Forbes methodology is that it, like BusinessWeek, is putting information into the MBA marketplace that would otherwise be unavailable to applicants making important decisions. And let’s face it: the vast majority of people who get an MBA do so for the financial rewards that come from the degree. They seek it to get out of the pile of people competing for better jobs, faster and more important promotions, and greater compensation. If ROI turns you on, this is the ranking for you. The latest top five of this list of 75 ranked schools came out in August, 2009:

1.Stanford University
2.Dartmouth College (Tuck)
3.Harvard Business School
4.University of Chicago (Booth)
5.University of Pennsylvania (Wharton)

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Pro: It’s simple and elegant and doesn’t pretend to measure the quality of the MBA experience or the actual education you receive. It’s all about dollars and cents, measuring the worth of a degree five years after graduation. It’s also based not on data supplied by business schools, some of which would be tempted to fudge the information to get a better ranking, but from Forbes own survey of 17,000 alums at 103 schools. The last survey for the Class of 2004 had an impressive response rate of 24%.

Con: Forbes ranking is U.S.-centric, though Forbes does separate lists of non-U.S. institutions that award MBAs in one year and in two-year programs. The biggest problem is that the ranking only measures compensation versus the cost of getting the MBA. Return on investment, while interesting and important, is hardly a measure of the quality of the education or the experience you’ll have.