With every publication of just about every business school rankings,
there is one certainty: Surprise. Every new list, including this week’s U.S. News & World Report ranking
of the best full-time MBA programs in the U.S., is loaded with
surprising, if not shocking, results. Some are outrageous. Others are
amusing. Still, more can be completely bewildering.
Some
of the eye-openers may not even involve a school’s actual ranking this
year but rather the plethora of stats, from GMAT averages to starting
salary-and-bonus totals, provided by the schools to U.S. News
to allow the magazine to crank out the list. While it’s easy to overlook
the vast array of statistics that goes into making the ranking, they
are often more compelling than whether a school goes up or down or where
a school ends up on the list.
Here we tease out the ten most astonishing results and revelations from the newest U.S. News ranking.
One of many photos posted to Instagram by celebrating Columbia Business School MBA students
1) Columbia Reports A Record Jumbo GMAT Average: 736
For a moment, forget about who’s first, third, eighth, or 19th. One stat buried in the U.S. News
tables draws particular attention and surprise. It’s Columbia Business
School’s average GMAT score: a record 736, higher than any other
business school in the world.
For years, Stanford’s Graduate School of Business topped the GMAT
charts. But with last fall’s entering class, the school’s average GMAT
fell five points to 732 from its record high of 737. Most admission
consultants believe Stanford deliberately chose to bring the average
down because it was discouraging too many superb applicants from
applying to the school. .Stanford’s new average, incidentally, is now
shared by Northwestern Kellogg, Wharton, and Columbia.
Wait, you say? How can Columbia have a 732 average when it reported a
736 to U.S. News for its ranking? That’s because U.S. News requires
standardizes test scores and undergraduate grade point averages for a
school’s entering class to two-year MBA programs. So Columbia’s jumbo
GMAT average only applies to students who enroll in its August start,
confirms a spokesperson for the school.
Columbia also enters a class in January when the admission stats are
less lofty. In fact, when you combine both entering cohorts for the
Class of 2020, the overall average slips the four points to 732. A
back-of-the-envelope calculation reveals that the average GMAT for the
three clusters of 204 students who entered Columbia’s MBA program in
January of 2018 was a full 15 points lower at 721 than the average for
the eight clusters of 552 students in the August entry class.
There’s no doubt that CBS has placed greater priority on GMAT scores
in recent years. As P&Q already reported, the biggest two-year
increase in average GMATs for a top 25 school came at Columbia which
jumped eight points to that overall 732 average from 724.
All of that effort came with a positive ranking result for Columbia
this week. The school’s MBA program climbed three places to rank sixth,
up from ninth last year and tenth in 2016. The upshot: CBS had the
largest single year-over-year gain of any top ten MBA program.
The Wharton School of Business in Philadelphia
2) Are Wharton MBAs Really The Highest Paid?
Another stat also popped out this year: The average salary and bonus
number for the latest crop of MBA graduates at Wharton. The school’s
newly minted MBAs reported a record $165,528. That’s more than Stanford
or Harvard, or for that matter, any other U.S. business school.
It’s also the first time Wharton’s pay eclipsed Stanford. Except that
it only reflects starting salary and sign-on bonuses, adjusted for the
percentage of graduates reporting signing bonuses. If you were to add in
other guaranteed compensation and equity awards. In fact, a complete
look at MBA pay provides quite a different story, revealing one of the
many flaws in U.S. News’ methodology for ranking MBA programs.
At Stanford last year, MBAs reported base salary of $145,559, a
signing bonus of $31,146, received by 55% of the graduates, and an
expected first-year performance bonus of an eye-popping $64,529,
expected by 72% of the Class of 2018. The total of $201,150 is adjusted
to reflect the percentage of MBAs reporting sign-on and performance
bonuses.
Even more surprising, perhaps, is that the Stanford total does not
include the value of stock grants or options, reported by 39% of this
year’s graduating class, or reimbursement for tuition or relocation
expenses, or a portfolio of benefits and perks that range from auto
allowances to 401K match plans. In fact, it also doesn’t include another
element of starting pay, ‘other guaranteed compensation,’ that for the
first time Stanford decided not to report. Last year, the business
school noted that other guaranteed comp average out to a fairly
consequential $83,065, received by one in four students. Wharton
reported median other guaranteed comp of $30K, less than half the sum
awarded Stanford MBAs, but also failed to report on the percentage of
its grads, presumably lower, who received that benefit.
In other words, there is no way that Wharton MBAs had the highest pay packages last year, a U.S. News-generated stat that helped to propel the school to top honors from U.S. News.
Harvard Business School in a wintry scene
3) Harvard Business School At No. 3? Really?
Most schools would be thrilled to round out the top three of any ranking. Not Harvard Business School. They are the ‘West Point of Capitalism,’ as the saying goes – the bar that many business schools set for themselves. HBS is influential and acclaimed – a billion-dollar brand with a Cheval Blanc network that open doors and confer authority for a lifetime. Despite this, HBS tied for 3rd with Chicago Booth and (gasp!) cross-town rival MIT Sloan in 2020. They may as well have ranked 5th!Alas, HBS is accustomed to the disrespect. Sometimes, you wonder if methodologies are constructed to give them short shrift. Look no further than Bloomberg Businessweek, which revamped its ranking methodology in 2018 after HBS took home three straight first-place finishes. Sure enough, the school fell to 3rd when all was said-and-done.The counter-argument, however, is that HBS doesn’t rank atop any of the four disparate methodologies that measure graduate business schools. In other words, maybe the perception and the reality are at odds. Take the Financial Times. Here, HBS was runner-up to Stanford GSB in 2019, a marked improvement over its 4th place finish the year before. For the past two years, Harvard has ranked below Chicago Booth and Northwestern Kellogg according to The Economist.
In U.S. News, HBS was cursed by two factors. First, the school’s three-month placement stood at 89.3%, the third-lowest among Top 20 full-time MBA programs. However, this reflects a bit of a dilemma. HBS grads are coveted – they don’t need to scramble for jobs. In other words, this placement rate may reflect less on performance and more on confidence. Translation: HBS grads are better positioned to hold off and wait for perfect opportunities – ones that aren’t handed out en masse. That includes everything from private equity and hedge funds – industries that feature an inordinately large percentage of HBS alums – to early-stage firms that offer equity.
Bottom line: U.S. News’ methodology is geared to musical chairs, where the schools are punished if their students can’t land a spot after the music is cut. Problem is, many HBS (and Stanford) grads simply prefer to stand and observe over marching around in a never-ending circle.
That said, Bloomberg Businessweek’s recent release of raw recruiter scores should give HBS defenders some pause. When it comes to producing the “most creative” MBAs, HBS grads languished at 29th with a 3.66 score on a 5-point scale. In terms of diversity, HBS placed 24th at 3.74 for its average. Similarly, the school notched a 3.65 for “best trained,” good for 28th. More damning, HBS ranked 2nd for “Brand Value” – indicating that there is a serious gap between promise and performance among HBS MBAs according to recruiters. That may be a trend to watch in explaining why HBS has become an also-ran instead of an almighty in the MBA universe.
Dartmouth College’s Tuck School of Business slipped outside the top ten
4) Can Dartmouth Tuck Return To the Top 10?
What a difference a year makes! Last year, Dartmouth Tuck ranked in the Top 10 of every major ranking, topping out at 7th with Bloomberg Businessweek. This part year? Well, let’s just say the local vineyards have been keeping Tuck plenty stocked.It started with The Economist, which dropped Tuck to 12th. Bloomberg Businessweek ranked the school 19th. An anomaly? Not when Tuck plummeted to 15th with the Financial Times. If that wasn’t enough Tuck slid from 8th to 12th on the 2020 U.S. News ranking – the gold standard for MBA rankings in many corners.
Talk about a bad year – especially for a program that has traditionally yo-yoed from 6th to 9th in the U.S. News ranking. Even worse, it shares the 12th sport with NYU Stern and Virginia Darden, meaning they could’ve very easily been 14th had U.S. News tinkered with their weights this year.
What’s behind Tuck’s fall from grace in U.S. News? Nothing, really – and that’s the problem. With the Class of 2020, the average GMAT held steady at 722 from the year before, much like the 717 average posted the two years previous to that. The average undergraduate GPA dipped…but just by .02 of a point! The same is true of acceptance rate, which inched up from 23% to 23.3%. When it comes to average starting pay and bonus, Tuck’s $157,821 number tops every Top 10 program except Stanford GSB. In fact, the only real difference with Tuck involves placement, which bottomed out at 91.9% in 2020 after consistently running at an above average 95% clip in recent years.
Another area that haunts Tuck is the peer and recruiter assessment scores. Here, Tuck scored a respectable 4.3 among academic colleagues and a 4.0 among recruiters. Problem is, the schools that moved ahead of Tuck – Duke Fuqua and Yale SOM, in particular – scored 4.4 in the peer category and 4.2 among recruiters. Even more, Tuck has seemingly been locked into these scores for a stretch (though it was scoring 4.3 among recruiters a decade ago). In other words, Tuck isn’t doing anything wrong. Problem is, the schools around them are making strong moves. NYU Stern, for example, passed Tuck in both pay and placement, enabling them to pull into a tie.
With an Ivy League pedigree and a loyal network of legendary proportions, Tuck has the foundation to be a perennial Top 10 program. Its tight-knit community and transformative experience are cultural elements that simply cannot be duplicated in other programs. Can Tuck generate more buzz among recruiters – who are already paying a premium for their talent? That’ll be one of the big questions for Tuck to answer in 2019. If they can’t, they will become the Ivy’s answer to Virginia Darden: a program always on the outside looking in, never able to make that final and difficult step into the Top 10.
USC Marshall Dean Jim Ellis
5) For USC Trustees, More Evidence Of A Major Blunder
It’s not like Jim Ellis, the beleaguered dean of the Marshall School of Business at the University of Southern California, needed any more evidence that he has worked miracles at the school. But this year’s three-place rise for Marshall to its highest U.S. News rank ever at 17th is still more proof in favor of a dean who many say has been unfairly ousted from his job by interim USC President Wanda Austin.The highly popular 71-year-old dean is scheduled to leave at the end of this academic year, his third consecutive term cut short by three years because of the termination. His firing had been recommended by Provost Michael Quick who with Austin has been heavily criticized for the lack of transparency over the decision and failure to consult with faculty. Students have marched on campus in protest. Most of the school’s faculty are stunned and enraged. Many donors are canceling or rethinking tens of millions of dollars of pledges to the school. And several board trustees are reportedly seeking to revisit the decision (see At USC Marshall, An Engaged Faculty Tries To Understand Their Dean’s Ouster).
More than 4,000 people have signed a petition in support of Ellis, and hundreds more have sent letters, emails and phone calls to the university’s board of trustees opposing the university’s decision. Austin has not publicly disclosed the reason for the termination, only that the decision was made “after careful deliberation,” according to an email sent to alumni. “Because this is a personnel matter, we are limited in what we can share about this decision,” she added.
However, unnamed university sources, in spinning the story to the Los Angeles Times, suggested that Ellis was ousted because he had allegedly mishandled gender and racial bias complaints at the school. Rick Caruso, chairman of the board of trustees, has been quoted in the newspaper saying that Ellis’ firing “is part of where the university is today in terms of acknowledging a proper culture that needs to be embraced and practiced on campus.”
Well, that culture has gotten yet another independent endorsement from U.S. News. For Marshall, it is the third year in a row of improved U.S. News rankings. During that time, the school has moved up 14 places from a rank of 31st in 2016.
Even more compelling is that USC has made considerable progress in closing the long-standing gap between its business school and UCLA’s Anderson School of Management. The new ranking shows that USC is breathing down UCLA’s neck, just one place behind No. 16 Anderson in the ranking. In fact, only a single point separates USC from UCLA, 83 vs. 84 on the U.S. News’ overall ranking score.
No less crucial, Marshall’s MBA grads are reporting better placement and pay stats than grads at their crosstown rival. Last year’s graduating class of MBAs at USC pulled down an average salary and sign-on bonus package of $151,408, nearly $8,500 more than UCLA’s $142,997. Some 79.2% of Marshall MBAs were employed at graduation, nearly 10 percentage points higher than UCLA’s 69.7%, while 95.8% of USC’s grads had jobs three months after commencement, versus 88.7% at UCLA.
If anyone at USC needs to be ousted, it’s interim President Austin, Provost Michael Quick, USC General Counsel Carol Mauch Amir, and Board Chair Rick Caruso, all of whom have been directly involved in making a major blunder in dismissing Dean Ellis.
USC Marshall’s campus in Los Angeles
6) The Untold Story Behind One School’s Rise & Another School’s Decline In The Ranking
One of the rarely examined yet crucial elements of an excellent MBA program is the support that goes on behind the scenes in such key areas as admissions, programming, and career services. The best schools pour plenty of money and resources into these functions, ensuring that MBA students get the best possible experience.
Mark Brostoff, assistant dean and director of MBA career services at USC’s Marshall School of Business. Courtesy photo
He joined Marshall after serving seven successful years as associate dean and director of the Weston Career Center at the Olin Business School at Washington University in St. Louis. It’s no coincidence that Olin fell out of the top 25 this year, slipping three places from 23rd to 26th, the full-time MBA program’s lowest ranking from U.S. News in five years.
Just look at what has happened to Olin’s employment stats since his departure. In his last full year at Olin, the school’s placement rate three months after graduation was 97.1%, the best of any top 25 school in 2015. In the year that Brostoff left Olin, it was 96.3%, again beating every other top 25 school in 2016. Last year, without him in the job, that employment rate fell to 87.9% within three months of commencement and was 77.8% at graduation. Yet, market demand for MBAs remains high and last year’s economy was as stronger if not stronger than it was in 2015 and 2016 when Olin led all top 25 schools in MBA placement. Hats off to Brostoff for working his magic.
7) So Many Ties, So Little Satisfaction
No one likes a tie. People want something definitive. Isn’t that what rankings are for, to separate schools – even by the most modest of margins?The 2020 U.S. News ranking violates that precept in a major way. Traditionally, you’ll find a couple of ties, but few that raise ire. Last year, for example, Harvard Business School and Chicago Booth tied for the top spot – an exciting development that heralded a potential changing of the guard. By the same token, Duke Fuqua and Yale SOM shared the 11th spot, no different than NYU Stern and Virginia Darden at 13, Carnegie Mellon Tepper and Texas McCombs at 17, and Emory Goizueta and USC Marshall at 20.
This year, the ties are far less amusing. Perhaps that’s because many came in threes – and touched the most storied programs in the MBA landscape. Harvard Business School and Chicago Booth each tumbled out of their perch, tying MIT Sloan for 3rd. Northwestern Kellogg, Columbia Business School, and U.C. Berkeley Haas were bunched up at 6th like a car wreck. Duke Fuqua and Michigan Ross? Both 10th. Dartmouth Tuck, NYU Stern and Virginia – they huddled up at 12th. USC Marshall replaced Texas McCombs as Carnegie Mellon Tepper’s roomie at 17th. That’s OK, McCombs just paired up with North Carolina Kenan-Flagler at 19th. It’s bad enough to miss the Top 20, but Emory Goizueta, Indiana Kelley, and Washington Foster had to scrunch together at 21st.
At their best, rankings produce a sharp contrast, a set of tiers based on hard data and precisely measured expert opinion to give users a clear indication of potential value. In this regard, U.S. News is failing. In many ways, schools have mastered the system. Like a disenchanted teen, they simply study to the test, churning out metrics that show just how closely they’ve watched their rivals and integrate ranking considerations into their decisions.
In short, U.S. News must take a close look at its stale methodology. Say what you will about The Economist – with its myriad variables producing bi-polar, roller-coaster results that confound conventional wisdom – but there aren’t ties there. The Financial Times ranking, far more steady, didn’t see a tie in the 2019 ranking until 31st. With U.S. News, the ties simply make the ranking less credible, with readers needing more contrast across lines of measurables to make better decisions. Question is, will U.S. News be open to a fresh take, one perhaps less geared to reputation (i.e. peer assessment) and more towards student growth and satisfaction. The wheel may not be broken at U.S. News, it is dribbling a lot of air. Time to patch it up and rotate guys.
MBA students at Rice University’s Jones Graduate School of Business
8) When Will Rice Jones Take Flight?
Three years ago, the Jones Graduate School of Business was the toast of the MBA universe. They had vaulted into the Top 10 of Bloomberg Businessweek’s ranking, buoyed by high scores in satisfaction surveys given to employers, students, and (especially) alumni. After that, Jones was no longer the biggest secret in Texas, especially not when over 80% of students received sizable financial aid packages (a staple of Rice University itself).Led by Dean Pete Rodriguez, Jones has laid out an ambitious agenda in recent years. Pairing old school academic rigor with intensive personal attention, Jones has crafted a distinctive MBA program suited well to employer needs. In recent years, the school has ushered in required global experiences and employee-sponsored projects to provide students with both real-world experience and a broader view of business dynamics. The school has also launched an online MBA program – MBA@Rice – slated to boost resources available to full-time MBAs. Not to mention, the school is planning to add another section to the full-time program, boosting enrollment by 20%.
On top of that, Jones hosts the world’s largest startup competition. That doesn’t its Houston location, home to a dozen Fortune 500 firms, including many of the world’s top energy providers.
You get the gist. Unfortunately, these grand plans haven’t translated into a rankings bonanza. After rising from 33rd to 23rd from 2016-2019. Jones hit the wall, tumbling back to 26th in 2020 – in a three-way tie to add insult to injury. That should come as no surprise as you dig through the data. On the plus side, Jones is attracting top talent. Technically, Jones endured a five-point drop in average GMAT with the Class of 2020. Still, that 706 average bests six Top 20 programs in the U.S. News ranking. Employers are certainly impressed with Jones talent too. The program’s placement rate was 94.5% — which would place it above 16 Top 20 programs.
Alas, hiring and paying are two different functions. In 2018, Rice Jones MBA grads landed $129,950 pay packages – lower than any Top 20 program. One reason: Just 17% of 2018 grads reporting their pay chose consulting – and earned a below average $124K package to boot in the field. While Jones grads scored high in the GMAT, their undergraduate GPA – 3.32 – ranked 44th among Top 50 programs. That may be a reflection of selectivity. 39% of applicants were able to snap up a spot in the Class of 2020, which would’ve been the 4th-highest acceptance rate among Top 25 schools.
By increasing its class size, Jones’ acceptance rate will ultimately fall. Still, pay remains an albatross – one that will pull its ranking down lower than it deserves.
The University of Florida’s Warrington College of Business
9) Warrington Cracks The Top 25
Looking for a predictable player in the U.S. News MBA ranking? You could always depend on the University of Florida to rank somewhere from 35-40, in that same block as Michigan State and Illinois. They were a ‘solid state school,’ marked by high placement and small school experience that rested heavily on one-on-one attention and feedback.In 2020, the Warrington School broke out of its rut, climbing nine spots to 25th. The reason? Start with the school’s acceptance rate, an impressively low 18.8%. In other words, applicants have a better shot of getting into the Wharton School, Chicago Booth, or Northwestern Kellogg than Warrington. Make no mistake: Warrington attracts an impressive cadre of candidates. The Class of 2020, for example, brought an average 3.55 undergraduate GPA to campus – or just .02 of a point less than MIT Sloan’s incoming class averaged. On top of that, 89.1% of second years have already landed a job by graduation, second only to Michigan Ross among Top 25 schools. Within three months of graduation, the school’s 95.7% placement rate ranks third-best in this same range.
Those variables alone account for over 43% of the U.S. News ranking weight!
It was a banner year for Warrington, though some measures continue to dog the MBA program. The school’s peer assessment score – a measure more of reputation than actual performance – remains lodged at 3.5 – though a marked improvement over its 3.2 in the 2012 ranking. The same is true for its 3.5 recruiter survey score. While it is a .5 of a point jump over the past eight years, it still lags behind Warrington’s new company: Georgetown McDonough (3.9) and Indiana Kelley (3.8). In addition, average pay and bonus – $121,558 – is the lowest in the Top 25…and it trails programs nipping at its heels, such as Notre Dame Mendoza, Georgia Tech Scheller, and Vanderbilt Owen.
That begs the question: Can Warrington sustain this momentum – or was this jump simply a one-year anomaly. On the negative side, the average class is just 95 students – the fourth smallest among Top 50 full-time MBA programs. Of course, Warrington also benefits from a resource-rich larger public university – not to mention a robust undergraduate and online MBA programs.
Here’s where it gets interesting. Just look back in history. In 2011, Warrington ranked just 47th with U.S. News. Four years ago, it had clawed its way to 37th. Now it is 25th. In other words, Warrington has been quietly building up to this moment – and we wouldn’t be surprised if they are a Top 25 program to stay.
10) Those Inevitable Roller-Coaster Ups & Downs
What goes up must come down. Well, in rankings that is certainly true.As is customary, the biggest changes tend to occur further down in the rankings. Excluding schools that either disappeared completely from last year’s list or popped up on the new ranking, ten MBA programs experienced double-digit improvements in their rankings and another 13 suffered setbacks.
The year’s biggest winner? Iowa State University’s Ivy College of Business soared 32 places to rank 47th from 79th just a year ago.
