Guest Post By Caroline Diarte Edwards, Fortuna Admissions
The MBA is designed to be a life-changing experience, positioning you to pursue your highest career aspirations. At the same time, the amount of time, money, and effort you’re gearing up to invest means that where you go to business school stands to be one of the most significant life decisions you’ll make. It’s vital to do your homework to find the best business school for you.
It’s tempting to rely upon the various MBA rankings when deciding where to apply. Business school rankings can provide a valuable snapshot of performance across a range of measures, including return on investment (ROI), selectivity, salary, student and recruiter satisfaction, diversity, and other criteria. But without a firm grasp of each ranking’s different methodologies and algorithms, it’s easy to be misled by subjective definitions of “best schools.”
For example, the Forbes rankings is based exclusively on ROI, drawn from pre- and post-MBA compensation, career choice, and location. Forbes examines the five-year gain for MBAs, while the Economist ranking measures ROI in terms of one-year salary gain to determine early value from first-year salaries against tuition. The Economist also favors the international make-up of the school and post-MBA career opportunities. The Financial Times, meanwhile looks at a 3-year post-MBA time frame, rewarding weighted salary (20%) and salary increase (20%) more than any other business school ranking.
This year, Bloomberg Businessweek revamped its rankings methodology to organize its methodology around four “indexes”: compensation, learning, networking, and entrepreneurship. The catch, of course, is that the differing methodology of the new “modernized” ranking doesn’t allow it to compare this year’s rankings to previous results. And for the very first time, BusinessWeek is gearing up to publish a global list, combining U.S. and non-U.S. MBA programs on a single ranking (due out on Dec. 11th). Before this year, Businessweek published separate U.S. and international rankings with the notion that its methodology wasn’t easily transferable across vastly different regions and cultures.
U.S. News is one of the longest-established of the big five media MBA rankings, focusing only on American business schools. U.S. News is also heavily subjective, as 25% of the weight of the ranking relies on a peer assessment score from business school deans and directors. Similarly a further 15% is based on a corporate recruiter survey, while an additional 35% of the ranking is calculated based on placement success.
Year over year, these “big five” rankings chart the annual rise and fall of MBA programs, and herein lies their inherent weakness. Wild swings from one year to the next will often see schools beyond the top 20 move up or down by double digits. The different weightings and methodologies used by each ranking can create a confusing picture for potential applicants.
So how to make sense of it all?
Fortuna Admissions just released its annual Fortuna Ranking of MBA Rankings 2018 to show how the top business schools perform across all five of the major MBA rankings over the last 12 months. Since 2011, Fortuna has compiled the results published by U.S. News, the Financial Times, The Economist, BusinessWeek and Forbes to produce a wide-angle view of how schools perform across the varied methodologies and weighting of each ranking. These combined results level out much of the volatility inherent in the individual results of the “big five,” and provide MBA applicants with greater clarity of performance across the board. (You can view the full league table of the top 30 schools on Fortuna’s website.)
“You might call it the b-school rankings smell test,” writes Fortuna Director Matt Symonds in his analysis of the year in MBA rankings for Forbes, which gives additional context to the Fortuna Ranking of MBA Rankings. “While the five major media MBA rankings chart the annual rise and fall of MBA programs from Ann Arbor to Austin, the reality is that any league table that fails to list the fabled M7 schools – HBS, Stanford GSB, Wharton, Chicago Booth, Kellogg, Columbia and MIT Sloan – at the top of the list will create the sort of controversy that rankings routinely generate.”
So how much do the rankings matter? To the programs themselves, a great deal. In the wake of last year’s Forbes ranking, in which IMD overtook INSEAD as the world’s top 1-year MBA, IMD experienced a massive 63% increase in applications to its MBA program. HEC Paris is another international program enjoying a surge in application volume after being awarded the no. 2 spot on Europe in the latest Economist rankings.
The best strategy for the MBA applicant, however, is to learn what’s being measured and decide whether it’s relevant to you. Ultimately, your shortlist of b-schools should reflect your individual priorities and needs.
Fortuna’s Heidi Hillis, an alumna of Stanford GSB (ranked no. 1 in BusinessWeek and The Financial Times this year), emphasizes the importance of this personal discernment: “Which program resonates more based on your career goals? Which alumni do you get on with best? These considerations are FAR more important than the money, as they will be much more of a predictor of your future success.”
“The culture and community vibe at Stanford GSB, for example, is vastly different than its east coast rival, Harvard Business School,” says Heidi. “You’re committing two years of your life to the MBA, and fit factors such as class size, location, cultural vibe, and personality will make a big difference in the day-to-day experience.”
For more on how to choose the right MBA program for you, check out this article by my Fortuna colleague, Judith Silverman Hodara, “No-Regrets Decision-Making: Choosing Between MBA Programs.”