The Bloomberg Business Week 2021-22 MBA ranking, coming back from last year’s suspension, is the topic of discussion for this week’s episode of Business Casual with their “interesting” and “surprising” list of top b-schools for this year’s entry.

Listen in as two of our three hosts, Maria and Caroline, who are alumni from HBS and INSEAD and are MBA consultants by profession, explain why “someone who’s been to the school has a much better sense of what the school is about” than “a journalist who cooks up a ranking”.

Episode Transcript

[00:00:07.450] – John

Well, hello, everyone. This is John Byrne with Poets and Quants co host Caroline Diarte Edwards and Maria Wich Villa. Maria, of course, is the founder of ApplicantLab and Caroline is the always witty, always sophisticated co founder of Fortuna Admissions and the former director of admissions at INSEAD. Welcome, all. Hey, this week the big talk is all about rankings. That would be the Bloomberg Business Week ranking, which actually was suspended last year. So this year it’s a return. And sure, the results are kind of interesting and we’re going to get it all into this along with what you should discount, what you should take seriously, if anything at all, other than the entertainment value of what’s been published. Let’s just do the simple thing and say who’s on first? Stanford came out at the top of the ranking. This is the third year in a row that the school has been number one and having the best MBA program in the United States. Dartmouth Tuck was number two. Interestingly enough, it’s the second year in a row that Tuck has maintained that number two position, which might surprise a lot of people.

[00:01:25.600] – John

Harvard is number three, the exact place it was for the last two years, two times that Bloomberg Business we put out the list. Chicago Booth is 4th, Northwestern Kellogg’s 5th. Then we have Columbia, UC Berkeley, MIT, Wharton in 9th place, tied not even in sole possession of 9th place, tied with the University of Virginia’s Darden School of Business. And that, obviously is the big unexpected news in this current ranking. What do you make, Caroline, of Wharton’s poor showing?

[00:02:02.350] – Caroline

It is very surprising, isn’t it? On one hand, the publishers have to make a story every year, right? So if they publish the same ranking every year or with some small variations, then no one would bother reading it. So it’s an eyeballs game. So they’ve got to juggle things around so that people pay attention and they cause a bit of publicity for each new ranking. So I am somewhat skeptical, as you know, about this whole game. But it is disappointing for Water. I know that you noted in one of your articles, John, that there had possibly been some poor feedback from a few of the students, and it’s true that a few respondents can have an impact on the results overall. And so if you have a handful of students who feel a bit disgruntled, then it can skew the results. And I do remember last year, in the spring of last year, speaking to students at a number of schools, and by far the most disgruntled happened to be the student at Water. Now it’s just a sample of one. Right. So it’s not very representative.

[00:03:13.220] – John

But we’ll get to that, though.

[00:03:14.820] – Caroline

Yeah. I mean, she was an international student and she felt that she felt it marginalized. She felt that she wasn’t getting much out of the program there had apparently been some sort of stat online amongst some of the students, and that left some very hard feelings. She also felt her being towards the school and how they handled the pandemic was not as positive as students at other schools that I spoke to who felt more goodwill towards the school and how things had changed. So just one person. But it’s possible that there were a handful of people at Wharton who weren’t happy about how things went during the pandemic and therefore have slammed the school in these surveys.

[00:03:56.760] – John

Yeah, I think that’s exactly right. And if you go back and you look at what happened at Wharton and this is sort of unusual. Yeah. Students that very few MBA programs were happy about having to go online and they were pretty frustrated about not being able to have the normal social interactions that are a key part of an MBA program and that leads to the networking that ultimately results in enduring friendships and support over the course of your career. Now, during the summer of 2020, when most MBA programs have announced plans to go hybrid, Orton was really at that point the only M seven MBA program that took a blended approach off the table and announced that everything would go online. And even before they did that, a student initiated survey at the school found that 78% of the MBA said they were not excited about the upcoming semester. 94% of the students felt the value of their overall MBA experience is diminished by at least 40%. And then when they were asked to rate their expectations for the full semester last summer on a scale of one which meant would rather defer to ten, very excited, 78% of the students rated at five or above.

[00:05:12.860] – John

And this survey reflected 539 members of the Class of 2021, which was just under 70% of the second year MBA. So the disappointment, the anger, the frustration, most of which Incidentally revolved around their belief that the administration was not collaborative, was not engaging in a dialogue with the students, was acting unilaterally on everything related to how it would deal with COVID. I think really seeped into the Business Week ranking. I call it the Revenge of the Cobra Cohort, because as people know, Businessweek has always surveyed the latest graduating class. And so their results are in this survey. And if you look at the underlying scores in the ranking, you’ll find that Wharton score for the topic of learning, which is really made up of the student survey, by and large, is a disaster, an absolute disaster. And just to go back to what Caroline said, I want to underline that because this is really an important point about all these surveys and why everyone should take them with a big grain of salt. If you survey students or recent alumni, graduates of the program, they know without any prompting that the answers are going to be reflected in a ranking that will ultimately have some influence over the reputation of the school and their own degree.

[00:06:48.260] – John

So there is a fair amount of cheerleading in these survey responses, and that cheerleading leads to highly clustered results. And what I mean by that is that the differences between and among any of these student surveys at any of the schools is so small as to be statistically insignificant. It doesn’t really matter, to be totally honest. And when you get a few people who are truly disenchanted, it wipes out that cheerleading significantly and leads to a huge change in result, in part because the overall responses are so clustered together. So that’s exactly what happened to Wharton in this case. So then the question is in the ranking, should that be the case? Should one class disaffection with the school and their experience have such a dramatic impact? Because after all, we all know that Wharton’s MBA program is definitely not a nice place in the United States, if not the world. So what we’re seeing here in this rank is an anomaly, which is as a result of probably poor management of the cold crisis, because in many of the schools, particularly Stanford, Incidentally, the leadership manage this very well, and the students were very happy to be included, embraced their opinions, saw in a truly collaborative process that resulted in what decisions Stanford had to take to deal with the pandemic.

[00:08:23.950] – John

What are some of the other surprises, Maria, anything here pops out for you?

[00:08:28.170] – Maria

Well, I have a positive surprise. I agree with you. I think that asking one class for their opinions, and so you get one disgruntled class. And is that even the right metric to be using? I think that’s sort of silly, but one positive is that they’ve added in, I believe, a diversity metric. And so we’re seeing I believe it was Howard University had a really big jump. And so I think that that’s a good thing, because I think as we’ve expressed before, or at least I’ve expressed before, I don’t think that diversity is just sort of like a politically correct Kumbaya type of term. I think that there is legitimate value in not only educating people from broad swathes of society, but in going to business school with people from broad swathes society of so that you get to learn their perspective because African Americans are what, 13% of the US population? Latinos are 17%. So we’re not talking about like a very niche. If you go to business school with some of these folks, like, oh, man, they’re forcing us. They’re doing all this charade for the politically correct charade. But it doesn’t really matter now.

[00:09:35.740] – Maria

We’re talking like easily 30% plus percent of the population. And in fact, the US will be minority white, I believe, in the next 20 years or so. Hey, I think that it’s not just because it’s sort of the Kumbaya thing to do, but I think that there is legitimate need for business schools to have diverse classes. And so I think that that’s allowing certain schools that perhaps it’s interesting. Right. Because the rankings always change what they ask the schools for. So I think some schools have spent years trying to game the system by upping their GMAT scores and maybe trying to play games with accepting people with higher GMAT scores. And the average GMAT goes up, and then the ranking goes up. And so now I think by, quote, unquote, rewarding diversity, I would love to know more exactly about how they measure that. But by rewarding diversity, hopefully it will now make the schools take this more seriously because they realize that they have to do it if they want to continue to have strong showings.

[00:10:29.870] – John

That’s true. And I think the fact that diversity, equity, and inclusion have become a major priority among American corporations as well as the business schools makes me think that the time is right to at least take a look at this and maybe incorporate it into a ranking. In this case, Business Week. For the very first time out of this diversity evaluation, they waited at about 8.6%, which is the least of all the five factors that they evaluate. And I think it’s a good idea. The problem always is in the execution, right? I mean, that’s where every good idea either succeeds or fails. And there’s some tricky things that go on when you try to get a handle on diversity because it really is a complicated subject. And in this case, what the magazine actually did is that the percentage of Blacks at any given school were multiplied by 1.7 times. In other words, they were given much greater value in the diversity ranking than the percentage of Asian Americans whose percentage was actually discounted by giving them a multiple of 0.4 because they are overpopulated. Right. Compared to Blacks and Hispanics. But I can imagine that that would be quite a controversial issue in and of itself, given the lawsuits that we’ve seen against Harvard in the past is at the undergraduate level from Asian Americans who felt they were disadvantaged in the admissions process there.

[00:12:00.800] – John

Also, when you look at the results of the survey, they are kind of surprising. North Carolina State and George Washington University are way up there. In fact, they’re number one and number two on the diversity index, Howard is number three. And that allowed Howard to Zoom into the top 25 for the first time ever. And while I agree it’s great, Maria, to see an HBSC in the mix of the top schools, you have to wonder now because virtually all the students at Howard are black, does that make for a diverse class? Because if you add up all the white, Hispanic, and Asian American students at Howard, the percentage is zero. So therefore, Howard’s student population does not have 85.3% of the US population in it. It starts to get very tricky that way. The other issue that’s not addressed. And this is as important as diversity, which is inclusion. It’s important and crucial to have a mix of very diverse students. But it’s equally important to have a culture where differences are respected and valued. And I think one goes hand in hand with the other. Now that second thing, inclusion is so much harder to measure, but it could actually take a stab at this in the student surveys, because after all, those are surveys that get at least the latest feelings.

[00:13:30.410] – John

And despite the cheerleading that goes on, I would suggest to you that if people from a diverse background felt that they were unwelcome or that their opinions were not treated with the respect and the value of their classmates, I think they would be far more likely to answer those questions honestly than the more typical questions that are on the survey. So there is that I think business we should be congratulated for trying to get their arms around this very big and complicated issue that’s assumed a lot of importance in American society with the murder of George Floyd and the kind of reckoning that has occurred in this country over that there’s probably a better way to measure it.

[00:14:15.990] – Maria

Yeah, no, I agree. I think that putting it down to race, it’s always bother me. It’s overly simplistic. Right. Because you might have a black or Hispanic MBA student whose father runs a private equity firm, and they attended Exeter and Stanford for undergrad. And you might have a white person seriously, though, you might have a white person who had a single mother, or you might have someone from the Asian American one is one that also has never sat well with me. Right. Because we’re going to take a couple of dozen countries and lump them together. So someone from Lao or Cambodia has a very different Asian American experience than someone perhaps from China or India. Some Asian Americans have parents who are neuroscientists, and some have parents who are working in the service industry. So I think I would love more for diversity to be more about socioeconomic background and opportunities growing up.

[00:15:20.290] – John

Yeah, I totally agree with that. Having had a mother who could not read or write, having had both parents who never had the benefit of College education, and we were largely factory workers and being a first year College student, I totally agree with you. But almost a more interesting piece here, the data that comes from their examination of diversity. And this is data that we’ve seen here and there where a few schools have released, but we’ve never seen a great apples to apples comparison. And I’m going to give Business with a lot of credit for publishing the underlying data of its diversity index, which is far more revealing than where any given school might rank. So for the first time ever, you’re able to see what percentage of the class is actually white, black, Hispanic, Asian American at all the schools. And one of the surprises is actually Wharton. Now, white students at Wharton in this latest incoming class are at a minority. They’re 48% of the student body. Sure, that’s a heck of a lot more than 11% of the black students or the 8% of the Hispanics or 26% of the Asian Americans.

[00:16:38.530] – John

But it’s somewhat a surprise because if you looked at Northwestern, Kellogg, white students are 64% at Columbia, they’re 63% at MIT, they’re 60% at Harvard 53, Chicago 55, and Stanford 52. So just I think shining light, who is the chief justice of the Supreme Court, who once said the benefit of transparency is like sunlight. It just provides a lot of clarity and cleanness to it. And it also, frankly, puts peer pressure on each of these schools to do better. Now, one other interesting aspect of this is that obviously, Businessweek ranks the international schools, and Businessweek chose not to impose a diversity index or measure on any of the international schools. And I think that kind of makes sense to me because internationally people have very different views of diversity than they do in the United States, where we are very much focused on underrepresented minorities. But, Caroline, is it possible to measure the diversity of the European, the Asian, the Indian schools?

[00:17:52.780] – Caroline

Oh, you’re right. The definition is nothing different. So the school talks about diversity as the multiplicity of nationalities and cultures that you have represented at the school. Similar picture at London business school, where you have often no single nationality, representing about more than 10% of the class and 70 different nationalities in the cartoon. So that creates an incredibly diverse environment, and that has long been the case. So you’re right that the perspective on diversity and how measuring diversity is quite different. And the business suite ranking is reflecting very much US perspective on what is diversity and what progress needs to be made with regards diversity. So it’s complex in the many layers of it.

[00:18:48.740] 

Right.

[00:18:48.900] – Caroline

And I’m sure the European and international schools could also make a lot more progress on some of the aspects of diversity that Maria mentioned associate economic diversity. And I’m not sure to what extent that is being measured and captured anywhere. But I know from my experience that there is often a lot more economic, financial need and need some financial support at those very international schools because candidates are coming from countries where they haven’t had much the same earning power as candidates from the US or the UK or Western Europe, and therefore, it’s much more difficult for them to fund their studies. But that doesn’t necessarily mean that they are sort of low down socioeconomic ladder in their own country. Right. So it was a very complex question. But it’s interesting in the international ranking that you have Bocconi at number three in front of business school. So I haven’t had a chance to dig into that yet to understand how that came about, but I don’t think anyone else would put the Cody at Buffett’s yet in Munda Business school.

[00:20:06.730] – John

I’d have to agree with you, even though I have a lot of Italian blood in me. Hey, I like pasta and I love pizza. I love the country of Italy, and it’s my favorite place to go for vacation and Bocconi school. Let’s face it, it’s a really good school. But not INSEAD, not London Business School, not HCC, Paris, not IESE and Barcelona either. I don’t think you can argue about Cambridge and Oxford and a lot of other great European MBA experiences. Certainly good school, but I’m pretty darn skeptical about it being ahead of in Seattle and the business school. And there are always, like, wacky things to any given ranking in any given year. This year, four schools actually fell out of the top 25 in this ranking, including the University of North Carolina’s. Keenans Vlagwood Business School, which actually plunged 15 places to rank 33rd in the previous ranking, ranked 18th. And then even this is surprising to me. The University of Washington’s Foster School of Business, which plunged 14 spots to rank 30th from 16th. And of course, Washington’s Foster School has been a great beneficiary of the success of Amazon, Microsoft, Starbucks, and other really big, important companies in the Seattle area that has really elevated its status in probably the last decade or more.

[00:21:46.320] – John

And then you have the crazy things I’m going to ask for Caroline Marie, after I mentioned some of these crazy things, how does an applicant treat this? I mean, is there anything here that’s really valuable? What can you discount? What can you take seriously but just stir out a few other facts, okay. William and Mary, they lost 24 places in the ranking. They now rank 58th from 34. Syracuse, they lost 17. Utah lost 16. As I mentioned before, UNC lost 15 spots. And then you have the schools that actually where the champagne quarks are inevitably popping instead of people crying in their beer. Miami University of Miami’s Business School up 26 places to 46 from 72. Rutgers Business School in New Jersey of 25 to 37. Howard University, as we mentioned before, in the top 25 for the very first time, ranking 23rd. That’s a 22 place improvement in this, mind you, is over a period of time when really there were no substantial changes to any of these MBA programs whatsoever, nor was there any substantial change in how employers view these programs. So this is a direct result of methodology and the wackiness that rankings bring to the game.

[00:23:19.330] – John

So, Maria, how should they just treat this? Is this pure entertainment? So if you do well, you have bragging rights, but don’t take them too seriously. And if you do poorly, just say Business Week is an idiotic publication with Editors who are mindless.

[00:23:41.070] – Maria

I like how you ask the question, and then you verbatim said what my answer would have been.

[00:23:48.030] – John

You want to steal your Thunder.

[00:23:50.370] – Maria

Yes, I agree, because I agree with you completely. I think look, these rankings, as Caroline said at the beginning, this is for clicks. This is to generate buzz and discussion and get people coming to their website and blah, blah, blah. And yeah, like you said, it gives a couple of perhaps otherwise overlooked program the chance to update the website with an exciting banner that proclaims their new ranking. But I would not take it seriously at all in terms of, look, if you’ve done the research and you have a specific career goal or a specific geographic goal with your career and you’ve done the research and you’ve found certain programs that will give you the steps that you need to take towards reaching those goals, then don’t pay any attention to these rankings. It’s just sort of a big circus.

[00:24:40.310] – John

Yeah. Caroline, I assume you agree.

[00:24:43.190] – Caroline

Yes, I agree with that. As you know, John, the world of education and well, at least traditional educational institutions, which many of these schools are it’s not known for the rapid pace of change.

[00:24:56.960] – Maria

Right.

[00:25:00.930] – Caroline

Exactly. It’s somewhat artificial. Right. That things have not changed that much from one year to the next. It takes much longer, really. The changes happen over a much longer period in terms of how a school stands versus its peers. So you can’t really put much weight on changes from year to year. And also, you said earlier, a lot of the data clusters together. There can be very small differences that result in quite dramatic outcomes in the final ranking. So I think it gives a false impression that there’s a big difference between some of these scores, whereas in fact, when you dig into the data, the differences are not so dramatic. I think it’s interesting for candidates to read through the rankings, get beyond the headlines, don’t just look at the bare ranking itself, but dig into it, understand the methodology and figure out which data points are useful for you, because every ranking methodology is different and they may be using criteria that are completely relevant to you as a candidate. So if you’re going to look at it, spend a bit of time understanding it and reading beyond the headlines.

[00:26:31.160] – John

Yeah, that’s really true. And a good example of how close these schools are is in the compensation data, let’s face it. So compensation and placement in the Bloomberg Businessweek ranking are more heavily weighted than any other factor. And that tends to be true across all the rankings, whether it’s the Financial Times, US News or what have you. Almost always, compensation, placement are the most heavily weighted factors that result in a school’s success. And we know that both of those compensation and placement are dramatically impacted by the school’s location, by the industry choices the students make in deciding where to pursue their careers, and by the school’s overall reputation, which determines, in fact, whether McKinsey Bain, BCG, Morgan Stanley and Goldman Sachs even show up to recruit the students. And so you can get compensation very high at schools that you might not think about. And the differences among the best schools is often so slight as to also be statistically insignificant. Now, I should point out that this is the 20th time Business Week has published a ranking. And one confession I have to make, and this is for total transparency is I created this ranking back in 1988.

[00:28:04.010] – John

So I am the Doctor Frankenstein who created the monster who now runs the Earth, terrorizing all the business schools and creating lists that obsess every applicant, student and alumni of the schools.

[00:28:19.690] – Caroline

Thank you for that job.

[00:28:21.430] – Maria

Yeah, great.

[00:28:23.350] – John

I should also say that because I was in the lab as Dr. Frankenstein creating the monster, I know what limitations there are to data. I know what limitations there are to these different methodologies that are created to crank out these lists. And I know kind of where the holes are and what to look for. As I pointed out, the 20th. And during those 20 lists, Kellogg has landed in first place five times in the Bloomberg Business Week ranking, Wharton and Chicago Booth four times each, Harvard and Stanford three times each, and Duke’s Fuqua School once, just to put all of that into perspective. Now the thing about the ranking is that no matter what we say about how frivolous it can be, how misinformed the Editors can be in choosing what factors to weigh and how much each factor should get, people do pay attention to these lists, which is why we’re devoting your podcast to this one. It does affect application volume. It actually affects alumni giving alumni whose schools rank high tend to be in more generous moods than alumni whose schools rank low or who fall in the ranking. It does affect careers in many cases.

[00:29:52.340] – John

Dean searches now have specs in them that will actually literally say your job will be to improve the school’s rankings. It even affects faculty recruitment, because I have heard in some cases, believe it or not, faculty from certain countries where rankings are really important, like China or India, for that matter, might choose one school that’s ranked higher than another in evaluating a job offer. So there is some consequence to all this, and we just want to actually put some reasonable and sensible expectations around it, read it for the entertainment value it provides. Look over the long term to see what a school’s results are, and look over numerous rankings, not only one. And the benefit of the business school ranking game is that you have five legitimate media organizations that rank the Financial Times, The Economist, US News, obviously this Business Week one, and then Forbes. And those are really the five rankings that are followed by most folks and at poetry points, what we try to do is simply match them all together. So in one shot you can see where every school ranks across all of the five most influential rankings. And if you’re interested in reading more about the Bloomberg Business Week ranking, as is often the case, we too here at Poets and Quants are.

[00:31:24.400] – John

And I’ll admit it, we’re obsessed with rankings. We think they’re a lot of fun. And we’ve done two stories on the Bloomberg Businessweek ranking, the ten biggest surprises in this year’s list, as well as just our overall analysis of the latest ranking, the 20th in Business Weeks history. So, Maria, any final words to add because your alma mother finished third?

[00:31:51.170] – Maria

Oh, no. I’m going to ask for a refund. Who cares? Harvard could be 300 and it still would have been the right program for me. Like who cares? My final thought is sort of a relatively small one if you are looking to go to school in Los Angeles. I don’t understand why USC is doing better than UCLA in a number of rankings. USC is a fine, wonderful school with some real strengths. But I think the quality of the experience at UCLA is much, much stronger. And I am flummoxed by seeing this one again. USC is beating out UCLA. Take it from someone who’s lived in Los Angeles for over 15 years. UCLA is a little bit better. Sorry, Bloomberg. I’m sorry. USC.

[00:32:39.530] – John

Totally agree with you. No doubt about it. No doubt in my mind at all. And Caroline, any final words for someone who’s an amalgam of the school that finished behind IMD IESE, Bin School and Bocconi?

[00:32:53.330] – Caroline

Well, as you said, it gets juggled around every year so I wouldn’t set too much store by these rankings. And someone who’s been to the school has a much better sense of what the school is about and what is the value of having done that? MBA then, frankly, a journalist who cooks up a ranking so I wouldn’t worry about it.

[00:33:19.140] – John

Indeed. There you go. So for all of you out there, thanks for listening to Business Casual. Our weekly podcast with my co host, Caroline and Maria. This is John Byrne with Poets and Quants. Thanks for listening.