MBA Rankings | Why you should ALWAYS take Rankings with a grain of salt

In this video I am talking about the most prominent MBA rankings, I will give you some insights on how they actually work, and why you should always take rankings with a grain of salt. Every MBA ranking has its own unique approach, giving more or less weight to different metrics:

00:00 - Intro

00:23 - US News
Its specifically for the US market and covers American business schools only. 25% is peer assessment (asking other business schools on their opinion, which schools the better schools are). And with that, U.S. News is the only ranking to include a measure of the opinions of business school leaders as a part of its methodology.

01:08 - The Financial Times
The FT focuses on salary increase. 63% is everything career-related. By that logic, business schools would favor candidates from low wage countries or candidates, who are currently on a low salary but have such a strong profile that they know their salary post-MBA will increase significantly.

01:52 - The Economist
The Economist includes over 20 separate data indicators that fall into nine of the weighting categories. In order to be eligible for the ranking, schools must complete questionnaires for at least two consecutive years before being ranked.

02:21 - Forbes
The Forbes ranking methodology is special. It's based solely on the return on investment achieved by alumni five years following graduation and is basically answering the question: Is a full-time MBA worth it?

02:36 - Bloomberg
Bloomberg focuses on compensation with ~39%, networking with ~28% (network built by classmates; students’ interactions with alumni; successes of the career-services office, etc.), learning with ~23% (quality, depth, and range of instruction) and entrepreneurship with ~11%.

03:08 - Poets & Quants
In the Poets & Quants MBA ranking, each ranking is separately weighted to account for their view of the soundness of the methodology and the credibility of the list.

03:26 - Criticism
MBA rankings suffer from sample size problems, making the data meaningless. Also, when you browse through all the different rankings, you will notice that rankings vary widely.

Think of rankings as pictures. They are a snapshot in time. There are always movements of course, but what really matters is consistency. Great schools are always in a certain corridor or range. Also, some publishers of rankings adjust the metrics every once in a while, which makes a ranking itself difficult to compare.

Landing on the rankings is very important for a school's marketing. In order to be eligible for a place on the rankings, schools need AACSB or EQUIS accreditation. Rumor has it that schools don't have either, but still land a spot in the ranking.

A lot of experts prefer the US News ranking because the outcomes are raw. You’re getting the real data; not data that’s put into a black box, manipulated, and then spit out for public consumption which is apparently what the Financial Times does.

In recent years, some business schools have knowingly misreported data to make their program to look better. MBA rankings are a black box and most schools don’t get caught. If you do some Google research, you will find the name of the schools, which have previously manipulated data.

Rankings are only based on statistics. Don't let them drive your final decision, because rankings don't capture two very important things: fit and culture. Those factors are far more important than just a set of numbers. When browsing through the rankings you should see the big picture: Understand the underlying methodology, compare a school's ranking to the previous year, check for consistency and assess which rankings’ methodologies best match what you want to get out of business school and which rankings value the same things as you do.

The MBA experience is different for everyone, it’s just very hard for a rank to represent just how good a school is for you. Rankings can never fully reflect the rich complexity of business schools experience and they are no substitute for what matters most: finding schools that best fit you.

Question of the Day:
What is the most important MBA ranking to you? Which are the ones that you look at? And how trustworthy do you think, rankings are? Let me know in the comment section below.

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Useful links:
US News: https://www.usnews.com/best-graduate-...
Financial Times: http://rankings.ft.com/businessschool...
Forbes: https://www.forbes.com/business-schoo...
Bloomberg: https://www.bloomberg.com/business-sc...
The Economist: https://www.economist.com/whichmba/fu...

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