The US News MBA Ranking is the most widely followed and viewed, making it the most influential in the MBA industry, particularly in the United States.

In this episode of Business Casual, John, Maria and Caroline will talk about the 2022 US News MBA ranking, what is interesting about it, and what makes this year’s ordering different from past years!

Points of discussion:

• 2022 US News Top 10 MBA Rankings for 2022
• In the world of b-schools, how significant is ranking? How do they perceive it? (Maria’s opinion will definitely make you think the other way around!)
• What is the impact of ranking on the overall reputation of a business school?
• What methods do MBA rankings use to generate their lists? What criteria do they have?

Episode Transcript

[00:00:07.210] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co host Maria Wich Vila and Caroline Diarte Edwards. As always mentioned, Caroline was the former admissions director at INSEAD and a co founder of Fortuna Admissions, the MBA admissions consulting firm. And Maria is the founder of ApplicantLab. We have another ranking. This is really probably the most watched and viewed ranking, and as a result, the most influential. It is only US centric. It’s US News and World Report. And there’s some kind of interesting disclosures in this new ranking that just came out. Among them, Chicago, Booth and Wharton are tied for number one, dislodging Stanford from last year’s ranking. Stanford ends up in a tie for third place with Northwestern Kellogg and Harvard continues to languish in fifth place, actually tied with nearby arrival MIT Sloan. Some of the other interesting things. Yale comes in at number seven, which is the highest ranked in the US News survey for Yale ever. Columbia is eight, tied with Berkeley for eight. Michigan raises. Well, it goes up three spots and hopes of the top ten at the 10th place mark.

[00:01:41.990] – John

So should anyone take this seriously? One big question. The second question is, let’s face it, if you’re admitted to Stanford or Harvard, the number three and number five school, would you ever go to the number one school? Maria, what do you think?

[00:01:59.030] – Maria

Well, I mean, I think it depends what your goals are and which student culture resonates more with you. But yeah, I think there are always exceptions. I do have someone who once got into Harvard and Kellogg but had their spouse, had a career in Chicago and they had family in Chicago. And so Kellogg actually made the most sense, even though Harvard was the school that they were more attracted to. But I don’t know. I don’t think that anyone would look at in a position like that, would look at the number rankings and be like, oh, wow, I got into Stanford, but it’s number three. And so I’m not going to go there. I find that hard to believe. And I don’t think I’ve ever just sort of anecdotally that doesn’t really pass the gut check test if you have clients. And I’m sure Caroline, I’d love to hear Caroline’s take on this, too, but I don’t have any clients who would ever say like, oh, man, I got into Harvard, but, oh, it’s fifth now in the US News rankings. I guess I’m going to go to Kellogg instead. Not to diss on Kellogg. I’m just randomly choosing one of the ones that’s ranked ahead of it, but it just doesn’t pass the gut check test for me.

[00:03:06.680] – John

Yeah. And I’m not going to diss on any of it on Chicago or.

[00:03:13.250] – Maria

They’re all incredible schools. They’re all like amazing.

[00:03:15.860] – John

But if you’re accepted by Harvard or Stanford, it would take even more than a free ride at Booth, Kellogg or Wharton to go there. I mean, I’m sorry, I would pay the tuition at Harvard and Stanford in full instead of a full ride at any of those other schools. That’s me. Caroline, what about you?

[00:03:38.210] – Caroline

Yeah, I mean, I agree. And I think that there’s not a lot to choose between the schools. Right. So what matters to the schools is which cluster they’re in. Are they in the top ten or are they in the top 25, or are they in the top 50? There are clusters of schools, and there’s so little to choose between the schools in a particular cluster that it doesn’t really make much difference. Right. And I think the value of the rankings is also that they collect some interesting data. So as we discussed before, I don’t think people should take the rankings at face value, but the way to use them is to sort of dig into the methodology and look at the data they’re collecting. And it’s very interesting to see some of the data points, and it’s important for candidates to dig into that and figure out what is important to them, which criteria are of value to them over other criteria. And that data collection is a really valuable exercise. But at the end of the day, the methodology, every methodology has certain biases in it, and you have to decide which data points and which criteria really are of value to you.

[00:04:50.530] – Caroline

I was reading your article this morning, John, about the results, and I think you overestimate how much the top scores care about this. I was reading what you’re saying about Stanford. They’re going to be heartbroken. I don’t think they care that much about this. I think that schools further down the rankings do care more about it because it can have more impact on them. But honestly, I don’t think GSB and HBS are going to be taking a huge amount of notice of this. I know that sometimes the alumni and students get worked up about it, but the schools understand that this is a game, that it’s an exercise in creating page views for the publisher, and therefore it’s a huge money maker. Right. For the publisher of the ranking. So it’s an exercise in churning this out every year to create a story and create a lot of traffic and therefore create revenue for the publisher and the top scores. They don’t care that much about exactly which position they have in this ranking. And fundamentally, it doesn’t change how they’re perceived in the market.

[00:06:08.930] – John

Yeah, I would generally agree with that. I think the problem is there are a lot of misinformed would-be applicants and applicants who look at this and think that there’s more credibility to it than really there is. So let’s just get into some of the data, which is kind of interesting. So Stanford almost always has the lowest acceptance rate, but this year, based on this data, it’s extremely low. 6.2% that is, to put into perspective, nearly one third the rate that Wharton posted and nearly one quarter the rate that Chicago Booth posted. Even though the schools are higher ranked, Stanford also has the highest GPA of the incoming classes, 3.78, the highest GMAT, in fact, the highest GMAT ever posted for an MBA program, 738. And yet it falls behind Chicago Wharton and is in the tie with Kellogg, which is just almost unbelievable. So why can that possibly be? So? Let me explain. It turns out that when US News determines what the starting salaries and sign on bonuses are for the latest graduating class, they only look at exactly what I said, the base pay and the sign on bonus. They don’t look at any long term or guaranteed first year compensation.

[00:07:39.540] – John

They don’t look at equity awards. And it turns out, of course, that because Stanford is located in the heart of Silicon Valley, equity plays a fairly significant part in the first year packages of many other NBA’s. I believe as many as 20% of them end up with equity packages. So if you actually looked at Total. Comp, there’s no way Stanford would have been beaten by Chicago Wharton and tied with Kellogg. So it’s a function of the methodology, the quirks in the methodology that pushes Stanford out of first place. It’s worth noting these details because that explains why you get these weird anomalies that are almost otherwise unexplainable. It turns out, in fact, that the school that posted the highest compensation number for their recent graduates is NYU Stern. It’s not even Harvard or Chicago or Wharton. And how is that possible? Well, it turns out that NYU funnels a higher percentage of their graduates into only two fields. In fact, two thirds of all the students at NYU go into consulting or finance, and those are the fields that pay the most money. So you could argue that, well, look, the variety of industries that their graduates are going into is not nearly as great as it is at other schools, and therefore, those other schools are penalized by it according to this methodology.

[00:09:15.770] – John

So there are a lot of quirks like that. And once you get under the hood of these ranking systems, you can explain away some of the weird and odd results. Maria, did you see any other quirky results in here?

[00:09:32.260] – Maria

I don’t know that I saw a lot of quirky results, because at the end of the day, I think Caroline and both of you have made this point before that. We’re talking about the difference of what would be thousands of a second in a road race, right? 737 versus a 734 or whatever. You’re still talking huge percentile, very difficult score to get. So it’s not so much that I think one of the things that’s interesting to me is that Caroline used the word game a little bit earlier, and I think that that’s a really great way to talk about it because I do feel that many schools, especially those that feel that their rankings, their rank does not accurately reflect what it should be. I think many of them have been playing the game. They’re playing a long game. I think it’s taken them a while. But for example, in the past, I’ve mentioned that I have noticed anecdotally that Yale has been putting over the past decade or so much more emphasis on the GMAT score versus, say, more touchy feely types of aspects of a candidacy. So they used to be more known as the social enterprise school.

[00:10:37.620] – Maria

They have been desperately trying to get out of that stereotype. It’s been a lot harder to get into Yale, especially someone who would have gotten in 15 years ago, hands down, let’s say someone who was like in a position to teach for America, driving great change in the social enterprise sector, but say with a 700 GMAT, I feel like a person like that might have gotten in pretty easily 15 years ago. And now if they have a 700 or 680 or something, they would not get in. So I think to the extent that it is a game, I think there are some schools in particular that are trying to play towards the boundaries of that game. I suspect Yale has been doing it with GMAT. And to be clear, there’s nothing against Yale. I love the Yale first year curriculum. I think all business schools should follow what they do. I think it’s wonderful how they do it. And I think Yale as a global the overall institution reputation globally can’t be matched. I remember when I got into business school, one of my colleagues had gone to Yale for business school, and someone else who was not from the US was like, oh, Maria, you didn’t get into Yale.

[00:11:37.980] – Maria

And I’m like, well, I didn’t really apply because back then it was perhaps not quite as elite the other way. I think one of the schools might be playing the game is I do believe that I have seen Booth giving out tremendous amount of scholarships. So if someone gets into a Wharton or a Harvard, I think Booth has been very generous with giving enormous scholarships to lure away that talent. And again, it’s a long term game, right, because you give that person a scholarship and you hope that two years from now they’re going to get that higher paying job, that you’re going to attract the person with a higher GMAT. But I do believe that all of that, whether or not that’s a deliberate practice on Booth’s part to try to game the rankings. I wouldn’t go so far as to that, because I think also to Caroline’s earlier point, I don’t think the elite schools really shouldn’t care too much about this. Believe in yourself, man. Your program is great. You don’t have to worry about whether you’re first or third or 8th. But those are the two schools in particular that I feel have been trying to change themselves subtly and change the composition of their classes using various tools at their disposal.

[00:12:44.190] – John

Yeah. In Chicago has a lot of money. I mean, it’s worth noting that Chicago is a school that received the largest single in history from a donor. David Booth school is named after he originally gave $350,000,000 to Booth. Much of that money is unrestricted and is being poured into scholarship AIDS. And in fact, the actual value of the gift has exceeded over $500 million because it was given in the form of a dividend stream. So Booth has money to spare to go shopping for high GMAT scores and frankly, more women in particular, because Booths historically had a little bit of trouble as more of a quantum school with the gender gap issue than some other institutions. Caroline, your take on some of these issues.

[00:13:41.390] – Caroline

Yeah. I mean, I wonder if they will realize that there is an issue in the methodology here. You mentioned, John, that scores like Stern are benefiting from the fact that a large chunk of the class going to consulting and finance, and therefore, they’re benefiting from those high salaries. And it’s not taking into account the opportunities that Stanford and Harvard graduates are getting that actually might not come the way of certain graduates. Right. And the choices that those graduates are making. So I think that’s a flaw now in the methodology. And I wonder if they might be thinking about how to change that, because it’s not accurately reflecting actually the opportunities that graduates are getting. And you see it in the comments on the Pros and Cons website and the comments that people are making. As you say, people take it at face value, and they’re saying, oh, maybe why are people looking why do people think so highly of Stanford and Harvard? Because people actually aren’t earning as much as graduates coming out of other schools. Right. So they are taking it at face value. And I think that is an issue with the rankings.

[00:14:47.190] – Caroline

So maybe they need to rethink the methodology there. And people also need to keep in mind that there are limits to the rankings. And it’s also not necessarily measuring. It can’t measure everything. It’s not measuring everything that people value. They can’t measure the culture of the school. They’re not measuring. There’s an interesting comment in one of your articles about the ranking about how Stanford does a wonderful job of attracting people who are extremely passionate about something and the community that creates. And I think Stanford also does a very good job of attracting people who really want to have a positive impact and really care about their impact on the world. And that’s not something that is captured in a ranking. Right.

[00:15:35.850] – John

Because if you want to work in a nonprofit and NGO or frankly, in healthcare or consumer products, you’re going to get a lower salary than one who would go to consulting or venture capital or private equity or even in many cases, investment banking. So therefore, you hurt your school by using your leadership training to do some good in the world at a nonprofit NGO or even the government, your school gets hurt.

[00:16:10.080] – Caroline

Yeah. Which doesn’t make sense. Right. So there’s clearly limits to the rankings. I would say that something that matters more than the year to year juggle of positions is the longer term trend. As you pick out. Yale has risen over the years. And so that’s interesting. And I think that’s much more useful to look at than the sort of annual up and down that they use to sort of make a story. And then my other concern about this ranking is that it’s very myopic, but it’s only looking at the US schools. There’s a whole world out there.

[00:16:49.910] – John

Absolutely.

[00:16:51.150] – Caroline

But it’s not even considering and I think that’s rather an outdated view of the world now. Right. That’s a huge limit to this ranking that it’s not taking into account actually the choices that people are making when they’re looking at their graduate education. It’s a global market out there now. And I think that’s a massive limitation of this ranking.

[00:17:18.790] – John

It would help a lot if US News actually made this ranking global because the two most important rankings of Financial Times in the US news. I will say I don’t know if you agree with me on this, Caroline, but the Ft has metrics in there that actually favor schools that enroll a larger percentage of their students and have a larger percentage of faculty who are considered international. And I totally get that. But what it does is it kind of gives some schools an advantage in other schools not. And what I’d like to see is just a more straightforward global ranking that doesn’t purposely do that, because I can make the case that, look, the United States is so big and so diverse that a student from the south is very different from the student from the Northeast or the one in the Midwest. But yet it’s all one country in the countries in Europe are the size of US States, so they get tremendous credit for that. And the Ft ranking and the US schools get penalized. I’d like to see a global ranking that just is more straightforward and is not slanted toward other schools.

[00:18:43.070] – John

And I think US News would be in a position to do that. But you’re right. It’s view of the business school landscape is so myopic because it’s a global market. And the US News should really recognize that, particularly in business education. That may be less true in law and some other fields in medicine as well, because of all licensing procedures that are required in different countries. But in business, it is truly global. And this has been a global market for quite some time now. And yet US News has its head in the sand in looking at this market only from a US lens. One of the kind of interesting things this is not a major MBA program. This school enrolls roughly a class of about 150 people a year only. But it is in Boston, a big market. And the school that had the biggest collapse this year, a 30 place plunge, was Northeastern University. Now, I know a lot of our listeners may not necessarily consider Northeastern, but it’s in a great city. It’s a good school, a solid school, and this school plummeted 30 places to 85 on the list from 55. And it’s kind of interesting if you look at the numbers, you might actually scratch your head about how in the world of school in one year can fall 30 places in a single year.

[00:20:13.270] – John

So especially when it became more selective, accepting fewer applicants, especially when the average GMAT square of its incoming class increased by more than 35 points. And the school even managed to get better grades from the corporate recruiters who were surveyed by US News. So how in the world does the school fall 30 places? Let me tell you. Their pay and placement numbers were abysmal. Salary and bonus declined about 4%, a little over 4%. Placement fell by nearly ten percentage points both at graduation and three months later. And it gives you a sense of how closely clustered these schools are, because those three data points alone basically caused the fall and the collapse, particularly in a year when many schools are reporting record or near record starting paying job offers for their MBAs last year. But man, that is punishing a 30 place fall. And this is a school where ranking would be far more consequential. Right, because people in the Boston area or people who are international but would love to be in Boston and they can’t get into MIT and they can’t get into Harvard and maybe even Boston College and Boston University might be a stretch.

[00:21:31.990] – John

Northeastern is a place to get you into that area, and they do have a good program, and they’re well known for the co op procedure of getting people jobs. This is very hurtful to a school like that, don’t you think?

[00:21:45.630] – Caroline

Yeah. It does have more of an impact, as you say, for the schools that are out of these sort of top ten top 20. It does make a bigger difference. And it’s unfortunate, as you say, that it’s often a small difference that can cause such a dramatic fall. So in reality, the school hasn’t diminished in value in such a dramatic fashion. And the ranking kind of exaggerates. There’s a very exaggerated effect that plays out in the ranking, which is very unfortunate for the school. So I’m sure that they are being very disappointed by this, and it is rather unfair, really.

[00:22:27.020] – John

It really is. The other kind of surprise in the ranking is you mentioned one of the benefits of a ranking really are the data points and the standardization of the data across a large sample of schools. And one surprise to me, frankly, is how it became more difficult for candidates to get into a highly selective MBA program. The acceptance rates across the top 25 schools. It turns out that 21 of the top 25 schools admitted fewer applicants and shrank their class sizes in the past year, which there was a point there where we were thinking during the pandemic, right after the first wave of big applicants, things had gotten more down to normal and it was a good time to apply. Well, it turns out that many of these goals have much lower acceptance rates than they had previously. Are you surprised that 21 of the top 25 business goals admitted fewer applicants last year, Maria?

[00:23:36.010] – Maria

I’m not, because I do think that the pandemic has fueled a larger interest in the MBA, I think, as we’ve covered multiple times here. And yeah, I think there’s just more interest in the MBA that equals more applicants. But it’s not necessarily easy. If a school gets 10% more applicants, they can’t just easily increase the cost size by 10%. And so I think that I’m not necessarily surprised. I think a few years from now we’re going to be talking about how there’s a decrease in applications.

[00:24:03.350] 

Right.

[00:24:03.520] – Maria

Because it’s so cyclical. Yeah. We just happen to be sort of near the top of a crest in terms of interest in business school. And a couple of years from now, it’ll go down and then it will go up again. So I’m not necessarily all that surprised. If I could, I’d like to bring up a point, like we were talking about how myopic these rankings are. And I think if anything, the Demore Kim descent down to 85th or 86 or whatever it was. I think that’s just excellent proof of just how silly these rankings are. Right. I think if anyone is like, well, every time I listen to this podcast, John, Carolina, Maria, just talk about how the rankings are sort of silly. But something like this should be a clear indicator to anyone listening that these rankings are not entirely very scientific. If that’s the right school for you, it’s the right school for you. And I just don’t understand. Hopefully that rapid descent helps prove that this is not sort of an ironclad set in stone true ranking of what the program can give. And also, as Caroline was saying earlier, the emphasis on the post MBA salary level is really quite silly.

[00:25:17.900] – Maria

I mean, if you’re in NYU is number one, but the cost of living in New York City is tremendously high. And I think we were talking I think it was like a $1,400 difference between NYU and the next school below it. And that was like less than 1% of the difference. And the cost of living in New York City might be higher than 1% than the cost of living elsewhere. And also, I think that if that’s the metric that you’re aiming to optimize for, then you are going to push your students to take jobs in consulting and finance, knowing that that’s going to help your school in the longer term. I think it makes it a lot easier for a school’s career services Department if they know that they’re going to try to push their students to take these very structured recruiting practices, as opposed to someone at Stanford who might be like, hey, I want to go work in venture capital as an unpaid apprentice for a year or something along those lines. I do wish that the rankings would question more something along the lines of graduate satisfaction. I believe the Financial Times does do this.

[00:26:24.100] – Maria

So, for example, when we were talking about the salary levels, I remembered I had a client from a couple of years ago who got an offer in management consulting and also got an offer at Amazon or one of the big tech firms. And they chose the tech job because even though it paid something like $30,000 a year less, the amount of work was also a lot less. For this person, life satisfaction mattered more. They would gladly give up that $30,000 in compensation in order to not have to work 100 hours a week. Excuse me. So I also think that just because a school doesn’t send as many people to banking and consulting, it doesn’t mean they couldn’t. If Stanford students wanted to go into banking, if they wanted to go into consulting, I guarantee you 100% of them would probably get those high paying jobs. But I think when you go to the higher schools, you start to see that there’s a bigger world out there and you also start to think about what matters to me. Right. I know that at Harvard, that was something that we talked about in first year in leadership class.

[00:27:26.440] – Maria

It was part of the curriculum was to talk about what are you going to prioritize in your life? And I think some of us not me, but I think some people came into Harvard wanting to really focus on money, but then some of these lessons that we covered about life satisfaction made them rethink things. So anyway, the point is I think applicants should use these with suspicion. Something like the Damore Kim drop is a clear indicator of like if someone can drop that far in only one year. Isn’t that sort of a suspicion that maybe it’s not completely scientific?

[00:27:59.780] – John

Yeah, exactly. Another really interesting data point connected to acceptance rates is yield. And while this is not a metric that’s used for the actual ranking, it is a metric that’s available. If you buy, you got to go behind a paywall to get this at US news. But yield, which is basically for those who don’t know the percentage of admits who actually enroll. This is a really interesting statistic, and I actually think it’s very more revealing than many of the statistics that go into the ranking itself, because it basically says if you send an invite to an applicant, will the applicant actually come or will the applicant go somewhere else? And what’s really interesting about the yield data this year is, I believe for the first time ever, Stanford has a higher yield than Harvard Business School. Typically, Harvard is around 90%, and Stanford’s yield this past year is a record 93.6%, which for Stanford, Incidentally, is up from 82.3% the year before. Now the 82% is probably a bit lower than the typical because remember, there were a bunch of international applicants who had trouble coming into the United States during the pandemic due to travel restrictions and other issues.

[00:29:28.910] – John

But 93.6% is really high, Caroline. That is a yield number that any admissions officer would drool over, am I right?

[00:29:40.680] – Caroline

Yeah. And I think that’s something that the schools care about much more than their position in US News ranking these schools. In any case, I’m sure that they’re monitoring that very carefully. But I’m not surprised that Stanford has a bit of a higher yield than Harvard, but it’s also related to class size. Right. Stanford has a much smaller class size. Sure. Harvard has to admit a lot more people, and that can create a bit more sort of volatility. And the numbers, there’s so little between them. Right. I don’t think you can read too much into those differences. But yeah, I mean, schools, certainly the top schools do monitor the yield very carefully.

[00:30:28.970] – John

I think there are a number of people who go to Stanford because the acceptance rate at Stanford is half of that of Harvard. And for some people, that’s a factor. I don’t think it should be a factor. But if you can say you went to the most highly selective MBA program in the world that only accepts roughly 6% of his applicants, that matters to some people, it shouldn’t, but it does.

[00:30:53.630] – Maria

I like to think that the sort of person who gets into Stanford is not the sort of person who would go around later on saying, I got into the school with the highest acceptance rate, I like to think that their admissions office would cut people out of the pool if they got the sense that that was why they were going there. I think many years ago I visited Stanford and Kirsten Moss said something along the lines of like, we’re looking for people who would come here even if we weren’t ranked number one or number ten. We’re looking for people who would come here regardless of what our ranking is, because they want to take such advantage of the very unique resources that we offer. And I think that that’s a really insightful way to put it. And speaking of yield, I think in the absence of any other data point, I do think that yield is probably one of the best metrics to look at. Right. Because that’s where the rubber hits the road. And that’s when you have to make you have to write out that check to make that deposit, and you have to move to the city to go there.

[00:31:45.450] – Maria

And you have to actually put your money where your mouth is. And so I do think that looking at yield, if we had to look at one of these quantifiable metrics, for me, yield, I think would be the most relevant one to look at that. Having been said as we were talking about games earlier, I do know that some of the schools do play games with yield. Again, to be clear, I love Kellogg. I will say something good about Kellogg in a second. But I do know that Kellogg recently in the past year or two has started doing something where, first of all, they put a lot of people on the waitlist, people who are very strong, and then they get so what happens if someone gets put on the waitlist at Kellogg early in the cycle? And so they’re depressed, but then they get into Wharton, right? And I feel like sometimes I think and I can’t prove this, but it feels to me like very strong candidates actually get waitlisted at Kellogg because then they get into Stanford, they get into Wharton, they get into Harvard. And it’s like, wait a minute, I got waitlisted at Kellogg, but I got into Harvard.

[00:32:36.480] – Maria

How does that work? And I’m like, because they probably assumed that you’d be getting in there. And the other thing is that I know that Kellogg has started doing something where they will call people who are on the waitlist and say, oh, we want to have sort of a little conversation with you, just sort of a chat. And then during that call, they will say, like, if we offer you I mean, I don’t think they put it quite this bluntly, but if we offer you a place where you’re going to take it, because that yield number, if I don’t actually formally make an offer to someone that doesn’t count against my yield number, but if I call someone and I say, hey, if I make you this offer tomorrow, are you going to take it? And that person says yes, then I know they’re a guaranteed person that is going to positively impact my yield number. And so I think with any of these quantifiable metrics, there are definitely ways to game it.

[00:33:22.060] 

Sure.

[00:33:22.780] – Maria

But in terms of also, we’ve been talking a little bit about like, well, since these rankings are so crazy, how do we choose what school is best for you? And I think that this is where Caroline mentioned culture. I think this is also where just doing your research is going to yield dividends that are incredibly useful. So not just talking to students about the culture, but really digging into the electives and the career reports because there’s a dramatic difference. Both booth in Kellogg highly ranked schools both in Chicago. But let’s say you’re interested in healthcare, right? Boost healthcare offerings are, not surprisingly, a little bit more quantitative than those of Kellogg, right? They have like a healthcare analytics lab, for example. Versus Kellogg actually has two different tracks for healthcare people. Kellogg actually has a track for people who are interested in the commercialization of new products, but they also have a track for people who are interested in the payer system, that is to say the ecosystem of hospitals and insurance companies and all of that. And so if you’re truly interested in healthcare, you might look at those electives and say, well, they’re both healthcare, but they target slightly different facets of healthcare.

[00:34:29.400] – Maria

And then when you dig deeper and then look into the career numbers, you see that Kellogg sends about 6% of its graduating class into health care, versus Booth sends about 3%. So that should also give you a sense of like, hold up if I really want to make my career in health care. Even if I get into Booth, which is the number one school, and Kellogg is, quote, unquote, only number three or whatever it came out at this year, maybe Keller might be the better choice, because if greater percentage of the classes going into healthcare, that means they probably have greater ties with healthcare recruiters. It means the alumni base is probably stronger in health care. Therefore, when I’m looking for jobs later, the alumni network is going to be stronger. And so these are the sorts of nuances that an overall ranking number is never going to be able to capture. So I think that’s another reason why, as a candidate, sure use the ranking as a starting point. Why not use it as a quick gut check if you’ve got a 620 GMAT? Maybe not necessarily, but maybe Stanford is not going to work out for you, although it might if you’ve done something truly remarkable with your life.

[00:35:28.810] – Maria

Trust me, they’ll still take you no matter what, but really start digging into those nuances to find the school that’s best for you. Because there’s no way one of these overall rankings could ever possibly capture that.

[00:35:39.070] – John

That’s a really good point. Doubling in the size of people going to healthcare in the case of Chicago. And Kellogg also tells you you get a bigger tribe of people who are more like you with similar ambitions, and therefore, as you point out, a bigger network that’s going to help you throughout your career in that field once you graduate from it. Besides, you’re going to be better prepared because of the greater offerings in the elective part of the catalog. Course catalog, which is really interesting. Now on acceptance rates, I mentioned that Stanford was at 6.2%. The number two school was not Harvard, it was MIT Sloan 12.1. Harvard was not far behind 12.5. Columbia 15.7. Berkeley was at 17.6%. In all, ten schools reported acceptance rates below. In 2020, only four schools had acceptance rates below 20%. And this is interesting, 27 schools were below 30% last year, only 18 worse. So that just gives you a sense of how much more selective the schools have become as the applicant pools have swelled. And that’s fascinating to me. It really is. Well, any last words, Caroline?

[00:37:07.470] – Caroline

Well, I mean, this publisher was the first, I think, to start collecting data, wasn’t it, on selectivity. So application volume admits and so on. And I think that it has driven this behavior not just amongst business schools, but also across all graduate education and undergraduate, where the schools are looking to drive application volume purely for the purposes of looking more selective. Right. And it doesn’t say anything about the quality of the program.

[00:37:43.380] – John

That’s true.

[00:37:43.900] – Caroline

What it says is that people are applying to more schools than they used to. Right. To me, that’s very artificial. And as Maria says, I think the yield is a much more valuable indicator of where the value lies rather than the application volume and selectivity.

[00:38:06.000] – John

Yeah. Because that’s a true market number. Right. It reflects informed choices made by students at this level who are pretty fully informed about the market and where they want to go. And so if a student gets accepted in the three programs and chooses one over the other two, that’s valuable information to have. And it’s probably far more interesting data and helpful data to determine the status, the reputation of the school and its ability to draw the best applicants than most of the other metrics that are used in the rankings. I mean, another really, I think valuable metric in many cases are the size of a school’s endowment, because the greater resources that a school has particularly per student tells you a lot about what they can invest in the program, how much scholarship money they can give, what kind of faculty they can attract and retain. So that’s a valuable measure of the quality of a given school in its program. And that’s a metric that’s never included in any rankings. So there are a lot of things that are not measured that are probably far more important to would be applicant than those things that can be measured.

[00:39:27.400] – John

And as both of my cohost pointed out, how do you accurately reflect the culture of an institution or the full elective offerings of an institution and how that may make your MBA experience more valuable to you? None of these things are factored into a ranking, and it’s understandable why they aren’t, because it’s hard to get your hands around that in a very tangible way with a single number. Anyway, there you have it. So here it is. Look at the report that we published on Poets and Quants. We’ve done two. We’ve done the ten most surprising insights or shocks in the current ranking, as well as their analysis of the full ranking in the story that came out on the day the rankings were released and make up your own mind. In many cases, these rankings are more an opportunity to look at the underlying data and select what’s important to you. And I think that that’s the greater value than who is ranked number one. Who’s ranked five, who’s ranked 10th, 20th or 30th. Take it with a big grain of salt. That’s what I got to say.

[00:40:44.140] – Maria

You know, one thing I wanted to add in terms of the acceptance rate is that I think that also can be manipulated. For example, many schools have been offering GMAT waivers. So people do not have to take the GMAT and they can still apply. And I think for many people, the GMAT or the GRE is a huge stumbling block. And so if I’m a school and I’m trying to drive my acceptance rate down, the easiest way to do that is to drive my admissions numbers up. And an easy way to do that is to say, well, guess what? You don’t have to take the GMAT now. You can apply even without the GMAT. Right? Because that makes things suddenly a lot easier. And so I think that that might be a reason. If you look at some of the acceptance rates from school to school, from year to year, that could be one of the explanations. And also there are some schools that really do try to their applications are much more focused on, do you really love me as a school? So for example, I think Columbia has a completely separate essay about like, it’s an option at least.

[00:41:41.820] – Maria

Like, why New York? Why Columbia? Why are we the number one school for you? And even in their interview, they’re sort of famous for routinely asking, which other schools have you applied to? And if you get into one of those, are you going to go there? So I think that there are just lots of ways to manipulate that. But I wouldn’t be surprised if a school is smart about this. And they really do want to drive the incoming applicant numbers up. The easiest way to do that is to start offering GMAT waivers. And then that acceptance rate and therefore perceived selectivity is going to go down. Even though the actual selectivity of getting into that program is perhaps not really changed.

[00:42:17.690] – John

Yeah, really good point. Maria, Caroline, thank you so much for really a great session and really important insights on how one should put this discount on any given ranking. This is John Byrne with Poets and Quants you’ve been listening to Business Casual, our weekly podcast.