U.S. News & World Report released its new 2019 ranking of the best full-time MBA programs in the U.S. and there are plenty of surprises in the results.
This year there were a number of eye-opening changes, from Chicago Booth's first-place tie with Harvard Business School to Yale School of Management's tumble out of the top ten. From our analysis of the new ranking we extracted the six biggest surprises. Here they are:
1. Chicago’s Surprise First-Place Finish
The University of Chicago’s Booth School of Business is no stranger to ranking wins — at least not since Edward “Ted” Snyder was dean of the school from 2001 to 2010. Snyder set the school on a solid trajectory with great forward momentum after his departure. From 2006 to 2012, the school’s MBA program was ranked first on consecutive Businessweek lists. It has also placed first in seven of The Economist MBA rankings, including for five straight years from 2012 to 2016.
But this is the first time Booth climbed to the top of a U.S. News MBA ranking. It did so, moreover, on the back of the University of Pennsylvania’s Wharton School, which had claimed a first-place tie last year with Harvard Business School. This year Booth replaced Wharton to share the No. 1 title with Harvard, while Wharton fell into third place, exactly where Booth was a year ago.
There are plenty of reasons for Booth’s success. Flush with money, the school has been able to attract some of the world’s best MBA students with significant scholarship gifts and recruit and retain some of the best faculty anywhere. Eight business school profs at Chicago have won Nobels: George Stigler in 1982, Merton Miller in 1990, Ronald Coase in 1991, Gary Becker in 1992, Robert Fogel in 1993, Myron Scholes in 1997, Eugene Fama in 2013, and Richard Thaler last year. Among the world’s business schools, no other institution can claim more faculty who have won the prestigious honor.
2. Michigan’s Ross School Cracks Top Ten In Seventh Place
The other big news in this year’s U.S. News ranking is the emergence of Michigan’s Ross School of Business. Ross not only cracked the Top Ten for the first time in 14 years — it finished seventh overall, jumping four places from its rank of 11th last year. To do that, the school had to jump over Columbia Business School, Dartmouth College’s Tuck School of Business, and Yale’s School of Management. No small feat. It is the highest rank achieved by Michigan in the U.S. News ranking since 1999.
The news is a big win for Scott DeRue, a highly popular Ross professor who became dean in July of 2016. When DeRue succeeded Alison Davis-Blake, the school was ranked 12th by U.S. News. Last year, Ross gained one spot to place 11th. While U.S. News did not disclose the actual ranks in its “sneak peek,” this year’s list would represent the second improvement in rankings for the school under DeRue. As recently as 2013, the school ranked 14th under Dean Davis-Blake.
Ross knocked Yale University’s School of Management out of the top 10 largely on the basis of its pay and placement numbers, which account for 35% of the overall ranking. The average salary and bonus for a Ross MBA graduate last year was $150,052, more than $12,000 over the $137,155 average at SOM which fell two places this year to rank 11th. Yalie pay is the lowest average salary and bonus of the top U.S. News-ranked 18 schools, even below UT-Austin’s $139,406.
3. Yale’s School Of Management Tumbles Out Of The Top Ten
Ross’ gain this year was Yale’s loss. The school tumbled out of U.S. News’ Top Ten for the first time in three years to finish in an 11th place tie with Duke University’s Fuqua School of Business. Sure, Dean Edward “Ted” Snyder was on a sabbatical this past year, but the real reason why the school fell has to do with the fact that it places the highest percentage of MBAs from any class into the non-profit sector.
Yale’s numbers were dragged down by the 5.2% of its graduating class that took jobs in the non-profit sector where the median base salary was only $67,500, nearly half the SOM class median of $124,900, and where few if any graduates received bonus money. At Ross, so few MBAs go into non-profit jobs that the employment report doesn’t even list the category. So depending on your point of view, those graduates add valuable perspective and diversity to SOM’s class or they hurt the school in rankings.
Still, the school’s drop is unexpected. SOM welcomed the most qualified class of MBA students to its campus last fall. The class boasts a 727 GMAT average – a record for the school and a number that eclipses peer programs like Berkeley Haas, MIT Sloan, and Columbia. At the same time, the class’ 730 median average ties it with Harvard’s incoming class. Along with a two point rise in average GMATs, Yale also experienced a bump in GPAs averages, going from 3.63 to 3.67. Nearly a fifth of the 2019 Class hold graduate degrees, with another 13% pursuing dual graduate degrees. So don’t count SOM out. It could very well be back in the top ten next year.
4. How Can Stanford’s Graduate School Of Business Be Behind Both Booth And Wharton?
With an acceptance rate of 5.9%, with the highest average GMAT scores for an incoming class along with the highest undergraduate GPAs, Stanford would seem to have a big advantage in U.S. News‘ ranking. Yet once again the school managed no better than a fourth-place finish, behind arch-rival HBS but also Booth and Wharton. While that outcome is somewhat puzzling, the reason for it lies in the school’s lackluster job placement numbers.
Only 63.9% of Stanford’s MBAs had jobs at graduation last year, the lowest level of employment for any top-30 business school. Three months after commencement, fewer than 90% of Stanford MBAs were employed at 87.6%, lower than any other top 25 school. U.S. News interprets those stats in the most negative sense, assuming that Stanford grads are having trouble finding jobs with their MBA degrees.
In truth, the degree is so valuable and the school’s graduates are so self-confident that they routinely search for the perfect post-MBA job. For many Stanford grads that means an independent search for a job with an early stage company or startup that doesn’t recruit many MBAs. Those searches don’t fall neatly into a recruitment calendar to satisfy U.S. News’ job metrics. The result? Those low placement scores pretty much cancel out the highest average GMAT for any prestige MBA program (737), the highest undergraduate GPA (3.74) and the lowest acceptance rate.
5. Southern California’s Marshall School Makes The Top 20
Only two years ago, the full-time MBA program at USC’s Marshall School of Business was ranked 31st by U.S. News. Last year it climbed to 24th, and this year it cracked the top 20 by placing 20th on the 2019 list. That is a jump of 11 places in the past two years alone. It’s certainly doing something right.
The school improved on almost all of U.S. News‘ key metrics. The average GMAT score for last fall’s incoming class rose 11 points to a record 703 from 692. The average GPA for the class increased to 3.48 from 3.37. The acceptance rate for applicants to its MBA program fell to 29.1% from 33.3% a year earlier. And last year’s MBA graduates had average salary and bonus of $135,812, up nicely from the $126,934 of a year earlier. What’s more, a higher percentage of the class were employed three months after graduation: 93.6% last year from 91.5% the previous year.
Those improvements helped USC claim its Top 20 status.
6. Biggest Jump For A Top 25 School? Rice University’s Jones School of Business
While USC did impressively well this year, so did Rice University’s Jones School of Business. Jones rose six places —most of any school in the top 25 — to claim a rank of 23rd. That is the best the school has ever done on the U.S. News survey. Just three years ago, in 2015, Jones placed 33rd best for its full-time MBA program.
The incoming class’ 711 GMAT average vaults Jones ahead of established powers like the London Business School and Duke Fuqua in the race for talent. Rice even came within two points of Virginia Darden – an academic powerhouse and former home of Dean Peter Rodriguez. Long regarded as one of the best-kept secrets in the MBA ranks, Jones’ strengths have traditionally centered on academic rigor, individual attention, and entrepreneurial prowess. Now, the school is itching to step up in weight class – and possesses the vision, leadership, and resources to do just that.
“We could be the highest touch, most intimate, highly selective program in the country,” Rodriguez argues. “We think that we could easily be Top 15 in terms of the level of talent and our selectivity, but at a scale that may be only half of our peer set. … That combination is where we find our sweet spot. Part of what we wanted to do was to be more deliberate in our strategy to be highly selective and assemble a group of 120 full-time students who could go just about anywhere and could certainly go to Top 10 schools.”
John A. Byrne is editor-in-chief of PoetsandQuants.com, the leading website covering business schools. He is also the former executive editor of Businessweek and former EIC of Fast Company.
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