After several years on the market, The Economist has officially bid goodbye to its business school rankings. Many people are aware that they have received a great deal of criticism, particularly from our hosts from Business Casual, John, Maria, and Caroline. This criticism has primarily been directed at them because their rankings are  unpredictable and inconsistent with any accepted method of ranking business schools.

Now the question is, given their track record on these rankings, which did not speak well of the prestige and authority of the brand that they represent, will they be missed or does the business school community, which they have persistently undervalued, have a bit to celebrate?

Listen to this week’s episode of Business Casual to hear what the team thinks!

Episode Transcript

[00:00:07.510] – John

Hello, everyone. Welcome back to Business Casual, our weekly podcast that examines the business school community and world and business school programs. This is John Byrne with Poets and Quants.

[00:00:19.610] – John

I’m here with my co host Caroline Diarte Edwards, who is a co founder of Fortuna Admissions, and Maria Wich Vila, who is the founder of ApplicantLab. The big news we want to discuss is The Economist decision to abandon business school rankings. The Economist announced that it will no longer rank MBA programs, executive MBA programs, and Master in Management programs, starting immediately. The magazine said it was withdrawing from the market primarily for commercial reasons.

[00:00:54.470] – John

Many know that The Economist ranking has been subject to incredible criticism. The results from year to year are very flaky, inconsistent, unpredictable, and unjustifiable by any standard. So there’s no question that these rankings did not reflect well on the prestige and the authority of The Economist brand, which is truly one of the most esteemed media brands in the world and engages an incredible audience of decision makers and influencers throughout the world.

[00:01:33.560] – John

And so I imagine there’d be a fair bit of celebration among business school deans, associate deans, admission directors, career management people in the business school community who look at this ranking and say, this is nuts. It’s crazy. And after all, if you even look. At the latest ranking that was published not all that long ago, this year. INSEAD, London Business School, Oxford, Cambridge, IE Business School, and Imperial College London all decided, we’re not going to play this game anymore. We’re not going to even be involved in it, and decided not to participate with the ranking, which, of course, further eroded what little credibility it had in the marketplace. I wonder what my two critics of rankings, Maria and Caroline, think of the Economist’s decision and whether there are some mixed feelings about the decision by this magazine to walk away from the market.

[00:02:30.450] – John

Caroline?

[00:02:31.440] – Caroline

Well, my first reaction when I saw the pinky news flash about this was, oh, thank God, and how did it possibly take them so many years to realize how shoddy this ranking was? I’m a huge fan of The Economist, right? I mean, I’ve been a subscriber for years. I’m a huge fan of the organization and the quality of the journalism it produces. And it was just tremendously frustrating to see this, frankly, crap being turned out year by year, and how could they not realize how bad it was? And when I was in Sierra, I was responsible for putting together the data and liaison with the rankings organizations and providing the submissions from INSEAD. I spent a lot of time on that, and it’s not a fun thing for schools to have to deal with. And it’s incredibly frustrating that we would generally do incredibly badly in that ranking. And I think there was a lot of bad data going into the ranking from some schools that also led to the volatile results. We always play those games very straight at in Sierra, so felt that it wasn’t particularly fair because I’m not sure that everyone was playing game fairly, because some organizations are much more careful about the methodology and the quality of the data.

[00:04:01.040] – Caroline

Right? So FT audits the data periodically. They go around all of the schools every so often and audit the data. It’s a pretty thorough process, and organizations like the Economists never did that. And I think there were a lot of question marks about the quality of some of the data that was being used. And it’s extremely frustrating for the schools to see the brand and knowing that obviously didn’t truly reflect the quality of the program. But some people will look at that and think, oh, wow, INSEAD is number 30. They’ve really gone down the drain, haven’t they? And occasionally you have to explain that, and you have to explain to people. People are coming. As you know, with the business school market, every year there is a new generation, a new class of people who are starting to learn about business schools, and they’re new to this, and they’re learning about it. And they might stumble upon The Economist MBA ranking, and that might be the first thing that they read about. And then you have to explain to them why INSEAD is not really one of the worst business schools in the world, and you have to explain your opinion of the ranking and some of the history behind that.

[00:05:26.180] – Caroline

And it’s just very frustrating for people at the school to have to deal with that. So my initial reaction was, well, thank God, I can’t believe it’s taken them this long to do something about it.

[00:05:38.900] – John

Yeah, that’s really true, Maria.

[00:05:41.580] – Maria

My first reaction was, we did it, guys.

[00:05:47.370] – John

We’ve been pretty harsh critics, let’s face it.

[00:05:50.360] – Maria

We have trashed these guys year after year, rightfully so, for, I think, the reasons that Caroline mentioned. And I think, Caroline, I really have a lot of sympathy for the position that you were probably in in those days, because it’s very hard to explain to a prospective candidate why that ranking is garbage without sounding defensive, without sounding like you’re trying to overcompensate for something, but it really is a garbage ranking. And our fellow our resident diplomat here just used the word crap a few minutes ago, which is, I think, the first time I’ve ever heard of you say something that is not completely proper and prim, which is really quite a treat for me. No, I think this is wonderful. It is embarrassing for The Economist. Frankly. As a publication that a publication of its caliber. And it’s so meticulous and it’s so sophisticated and rigorous in its analyses in every other topic in the world. That when it comes to judging business schools. Which you would think might be a pretty strong source of interest for a number of its younger readers. It was just so weird that they really just did not. They kind of made it up and it just led to all these weird results year after year.

[00:07:11.630] – Maria

I guess if I were to look at a silver lining, is that I think The Economist could use this as an opportunity to maybe completely redo the world of rankings. Maybe they could say, okay, everyone else does this thing where they find different factors and they rank each factor, they give it a waiting and we are going to completely reinvent it. But it is kind of funny. I think people who go to business school and people who go to economics graduate school are kind of very different people and I think MBA types would have a little chuckle and say that this is very emblematic of how an economist thinks, which is not necessarily real world useful versus the way an MBA thinks, which is far more pragmatic in the real world.

[00:07:56.900] – John

Yeah, definitely true. And the latest list, let’s admit it was an unmitigated disaster. You have Stanford and 8th place Chicago Booth, which incidentally had been a number one MBA program according to The Economist, in 2018 and 2019 was 9th. You have Owen Business School at Washington University, which is a very good school, but it actually got its highest rank ever, 19th ahead of UCLA Cornell and UT Austin. The year before it was in 2019. Actually it was 41st. And you would go back to why the INSEAD and London Business School just didn’t want to have anything to do with it. The two giants of European business education, The Economist would routinely rank them very poorly, particularly in comparison to the Financial Times. Good example. And the last time the INSEAD participated in The Economist ranking was posted 22nd, 19 places below its current Financial Times rank. LBS was 20 517 spots under its current Ft range. And even if you look over the 18 separate rankings that The Economist has done dating back to many years when it started, neither school, LBS or c has ever ranked first. And INSEAD has only managed to rank in the top ten once in all those years.

[00:09:32.730] – John

So there is plenty of disaffection by very important players who believe that The Economists undermine their quality. And so I get it, but I do think we’re going to lose something. And here’s what we’re going to lose business schools have long had a love hate relationship with rankings and it’s understandable why they would when you’re ranked low. And there are these questions from applicants and faculty and alumni that are annoying to answer because oftentimes you can’t explain why a school goes down because there’s so little transparency to the rankings, it’s hard to understand what’s going on. And the truth is, the differences between and among these schools is so slight that the results underlying the numerical rank are highly clustered together and have no statistical meaning when you put an actual number against the program. So I totally get it. But here’s the deal. The Economist is a prestigious and authoritative publication. It is read and engaged with by decision makers and influencers all over the world in the fields of economy, business and public policy. The fact that it devoted its resources to pumping out these three rankings every year really telegraph to its readers that business education is important, it’s worthwhile, and there is a good being served to society no matter where your school ranks.

[00:11:05.570] – John

The fact that The Economist believes these schools deserve its attention on a regular basis and devotes formidable resources to get these rankings published is a sign that business schools matter. Business education is important, and I think it does make people put business school education in their consideration set. It’s a reminder that there’s value here, and boy, should I go and get this degree, should I upskill? Should I enhance my ability to lead others and enhance my understanding of global business? Should I go and acquire that network of people who will support me and I will learn from throughout the rest of my life? Yes. That’s what the Economist ranking does. When you separate the actual results from the greater meaning, the greater context of what The Economist and premature puts on the business of graduate management education. So on that level, I think we lose something. I wish that The Economist instead said, look, we’ve been publishing crap. It’s beneath our brand, it is shoddy, and we need to fix it. And here’s how we can fix it, and here’s how we can also differentiate what we’re doing from what other rankings are doing and therefore add value in the marketplace.

[00:12:32.270] – John

I wish that The Economist had taken that approach as opposed to just walking away. Caroline, don’t you think we lose something here?

[00:12:39.140] – Caroline

Yeah, I guess if you take the perspective that no publicity is bad publicity, then it is a bad thing. Although I think Prince Andrew might disagree with that philosophy. But it’s true that The Economist is such a waste publication, as you point out. It’s read by so many decision makers around the world, and it’s often read by ambitious young people. It’s often read by students right around the world. So it does have influence. And the attention that it brings to business school, I’m sure, in some way was helpful, as you say. It boggles my mind that they let the state affairs continue for so many years and they didn’t do something about it, and they didn’t turn things around. As Maria said, they are known for the quality of their analysis and the rigor, and it’s a big organization, so how on earth could they not have sorted this out? I don’t know. How many years has this ranking been going on for? I don’t even know how many years it’s been going on for, but it seems like it’s a very long time.

[00:13:53.510] – John

Yeah, I think it’s about 18 years, maybe, something like that.

[00:13:57.030] – Caroline

Right? Yeah. I mean, it’s a long time, right, to be turning out rubbish for an organization like The Economist. So I think it’s rather shabby that they didn’t sort it out a long time ago.

[00:14:09.410] – John

Yeah, I think one of the things that your colleague Matt Simon said to me in my obituary for The Economist ranking is that they did include many international business schools from Canada and Latin America to Europe and Middle East and Asia that were not in the Ft ranking and gave, therefore would be students more wide-ranging    worldwide study opportunities and attention, which is helpful. And the fact that they had an alternative to the FT’s Masters in Management ranking, that’s also helpful. And they took a global perspective, which, as we know, US. News, which is the predominant ranking that many watch in the US. And many people who are bound for the US. For graduate education look at, is totally US centric in that sense. It pretends that there is no other world other than the US. Still, Bloomberg Business Week from one ranking to the next changes it’s mine. But typically ranks schools that are not in the US separately. Forbes ranks them separately as well. So the Ft and the economists were the only two that had true global rankings. The other thing about the economy and this was both, I think one of the things that ended up killing it and one of the things that kind of made it special was they paid a lot of attention to student opinion of the academic experience.

[00:15:43.490] – John

And the problem was the small sample sizes made those responses not credible and led to a lot of the volatility in the ranking. But nonetheless, there are problems when you survey the latest graduates, including the cheerleading problem that you have, where no one wants to undermine their own school and a ranking. So even if they had reservations about the experience, they might hide them from the answers in the survey. But generally, over time, over many classes, you do get to some general period of level of truth in the student surveys. So that will be gone. And there was some value in saying, hey, we think the faculty were outstanding and seller and consistent throughout. And in other schools that was not true. But we think the quality of the educational experience we received in the MBA program was top notch. Or not, or not quite top notch. Seeing those answers was helpful. And the problem, the sample size being so small and so unpredictable, led to crazy, ridiculous results. But I think we’ll miss some of that as well. Maria, last words on this.

[00:17:02.310] – Maria

Don’t say rest in peace. Yes, rest in peace. We hardly knew ye. No, you just said some really nice things about all the stuff that they did and the benefits they brought. But I continue to think, sorry, guys. Garbage in, garbage out. I really think this ranking, the subjective piece of it, it’s true it’s wonderful to get the opinions of people who have gone through the program because they’re going to know it best. The problem is that most people get one MBA in their lives, so how do they know what to compare it to? They might say, well, this faculty was amazing, but maybe if they would have gone to a different school, the faculty would have been even better. And I don’t know, it’s so weird. Like, for example, just really quickly, 25% of their ranking was this student quality indicator, and number two was International University of Monaco. I would love to study a business in Monaco, but you look at that and you’re like, is it possible that maybe it doesn’t pass the rational test? So, yeah, I mean, did it maybe help get some new attention to University of Monaco? Probably.

[00:18:14.530] – Maria

But it also doesn’t exactly help a legitimate candidate who is really lost, new to the process and looking for truly helpful criteria upon which to gauge a business school. Monica would be great, but yeah, come on, guys.

[00:18:31.560] – John

Very true. No doubt about that. Caroline, your last words on this?

[00:18:37.190] – Caroline

Yeah, I mean, it was really an embarrassment. It was a huge source of frustration for me. I do think it’s a shame they didn’t try to turn things around. Maybe this is an opportunity for Poets and Quants. John. You created the Business Week ranking. Maybe you need to maybe you need to replace this.

[00:19:06.790] – John

And I do recognize that it is a dubious distinction, to be sure. But being the person who created the first full time, regularly published ranking back in 1988 at Business Week, it takes a lot of effort and a lot of work to do this with journalistic integrity and transparency. It’s a monumental effort to create a ranking that adds some value to the marketplace, and it’s useful to a prospective student. And that’s why it’s easy to be for us all, especially me, to be the armchair critic of the Sunday morning quarterback kind of person. Monday morning quarterback, rather. And it’s so much harder to actually do it. And I can get that. It would have been a mountain to climb for The Economist editors to fix it. And the other problem, I think, for The Economist was how it did the ranking. The people who did the rankings for the business schools were not the people who covered business schools. The longtime editor of the ranking, Bill Ridges, did all the other rankings and lists that The Economist did. So he wasn’t fully invested in a way that someone who covers schools regularly, day in and day out, really knows the territory, has visited the schools, and had a deeper understanding of the true benefits of a business education and how to measure try to measure quality.

[00:20:39.060] – John

Try I would say not measure actual quality, because that’s almost impossible. I think that divorce between those who cover the industry and those who rank the industry ultimately leads to an inferior ranking. And I think that that has long been the economist Achilles heel on these rankings. If they had someone who, day in and day out, covered the business schools, met with deans, met with students, met with faculty, knew the industry day in and day out, and then allowed those judgments and understanding to inform a new and better ranking, the result would have been very different than what it has been. So rest in peace, economist ranking. We will miss you, but we may not miss you all that much. All right, Caroline Maria, thank you very much again for your incredible insights and views. And for all of you out there, thanks for listening. This is John Byrne with Poets and Quants. You’ve been listening to Business Casual, our weekly podcast.