February 01, 2007

Financial Times FT 2007 MBA rankings - do they matter?

If you are planning to do an MBA and did your research, you will come across a few well known MBA rankings. The notable ones are Businessweek rankings, The FT ranking and Economist Intelligence Unit (EIU) rankings. Of the three the Businessweek and FT rankings have considerable weightage. The EIU rankings are ..well.. strange. I mean, Wharton is no. 17, Harvard is 8, INSEAD is 22...you get the picture.

The Businessweek rankings are significantly US/North America centric (Queens outranks LBS and INSEAD..) whereas FT has a more global approach, and is probably the best mirror to general branding and perceptions. FT rankings are read around the world.

The rankings came out 2 days ago, and for me - it was good news. INSEAD is 7 (though I would have liked us to swap places with LBS. But in terms of 1 year general management programs INSEAD is no.1 in this case) and there were optimistic debates about the future of MBA. This post is not to discuss whether MBA is right etc. but to discuss if rankings matter.

Shoot me if you want to - but yes, they do, and quite a lot. Industry observers, leaders, executives all read these rankings and that creates a perception. This perception perpetuates and has its own power. No amount of reasoning is going to make us agree that some how Wharton is no.17 in the world and Harvard is 6 positions below IESE (no offense to IESE ;) )

Ranking is like a brand - it has its own power and influences potential applicants, recruiters, professors, business leaders and media. A strong rank is self-perpetuating. It creates an aura that a school is strong, therefore well qualified applicants apply, therefore the quality of student pool and eventual alumni is better, therefore recruitment becomes increasingly stronger - and it sustains. An observation will show that the top 10 schools pretty much stay that way (even if they juggle the positions internally within 10) for years and it is unlikely they will suddenly go down.

My own take is that it is important to research your potential schools well and aim higher if you can. It is not sufficient to say "school X has course Y I like and so I'm going to spend 100,000$ going there". It is also important to see what your world looks like after you graduate and 10 years down the line. Where are your potential classmates likely to be and what would they be doing? You want to gain the best mileage out of your MBA and the better the perceived rank of the institute, the better your chances are.

You could argue all you want, but if you were a VP of a company and you had 2 strong candidates - one from Columbia and one from Tchikkakaramba* school of business, the chance that you would lean towards Columbia are greater.

If you have a good background, strong scores, then don't aim too low to start with. Yes, competition is fierce, but how would you know what you can achieve if you did not even try? It may be a good option to mix top schools and some next level schools to achieve balance. I'm not the right one to comment because I only applied to one :P (hey, in my defense, I had very strong reasons. You might find it interesting to know that nearly 40% of INSEAD entrants applied only to INSEAD). A post like this is bound to raise heckles and ire about "stupid ranking nonsense", hey - don't shoot the messenger. It's better to face reality and take it by the horns than pretend it isn't real.

I plan to put another post on why ROI calculations miss what I call as "the flash of opportunity" that can alter our lives. But until then, I have to get cash for the school admission advance. I'm now about to become officially very poor.

(I am a little disappointed that power houses of Indian Business schools - the IIM's -Indian Institutes of Management - made no cut into the list. I do have my own observations on how some IIM statistics are twisted played to the gallery, but even then they are a powerful local brand, have great students and I would think they had some currency outside too. What are they missing so much that they don't make it to the top 100?! There are some areas they hurt - like diversity, experience of incoming class, international experience of class etc... if any IIM student/alumni is reading this - care to comment?)

Epilogue

* You could argue that I valued FT over Businessweek because of the bias that my school ranks higher, you can see for yourself that Canadian schools rank higher than world class European institutes like LBS, IMD and INSEAD and I don't buy that. Flame me.

* There is no Tchikkakaramba school of business anywhere in the world as I know it. But hmm..it sounds nice..I think..

9 comments:

Dmitri said...

I thought that H/W did not participate in the rankings? They declined to provide data for the Economist's rankings and they were dropped from the list...

JuJu said...

I personally believe the USNews rankings are the best.

necromonger said...

dmitri - the EIU ranking shows both the schools in the list. If they were dropped, then I thought they should not be appearing.

juju - USNews ranks only US schools and is no a global ranking. However, the top rankings have many matches and as I mentioned, the numbers tend to be fluid within the top 10 cluser.

Alex said...

USNews rankings reflect the reality. I mean Kellog below some chinese school??? give me a break.

and more on that: the ultimate question, if accepted to HBS/Col/Chi/K and some of these no-name schools in china/europe -where would you go? I think HBS would be the answer, indeed reflecting the power of H brand. the rest is just a journalists, trying to sell publications.

so rankings are just... rankings, not necessarily reflecting the reality.

necromonger said...

Alex,

I'm not disputing what you say. If you see my comments, I'm only saying what rankings are closer to perception. Perhaps FT and USNews are closer than any other - while the "almost universal" perception is the H/S/W pretty much always round out the top 3, the remaining are fluid but fall within a cluster with a surprise entrant here and there.

Whether rankings make sense or not, whether it's journalists making money for their publications are not is a matter of debate - ultimately they do shape general opinions. If for the next 10 years TIME ranked Haas as the world's number 1 school - then there is no doubt it would inch up in everyone's opinion.

Dave said...

Just out of curiosity,

Why is it that you discount Top-Tier Canadian schools like Queen's/Ivey/Rotman from outranking World-Class Euro MBA's as you mentioned?

Is it because the only two major Financial Centers they are Targets of are New York and Toronto?

The right Canadian MBA's offer excellent value to their Students, and placement stats speak for themselves -- in the overall I'd say it's a tad arrogant to dismiss those facts in the face of the home country these MBA's come from.

food for thought,
Lowly Canadian MBA student

necromonger said...

Dave,

I had no intention of sounding arrogant - so sorry if I came off sounding that way. My assertion is based not on how a school might do locally and what local reputation it has/what placement statistics it has, but is based on general reputation on a global arena.

The value of an MBA is not just in terms of immediate placement, but also really in terms of strength of the alumni-in terms of size, spread and influence and also general recognition of the brand. Given these factors, I stand by my assertion that schools like INSEAD and LBS are global.

I'm sure the canadian schools are great when taken in context of their local market and perhaps 1 or other places - but would they compare to the larger brands? This brings me to a similar comparison with the Indian Institutes of Management in India. Awesome schools, incredible placement statistics - but it would hard to place them above the generally considered top programs in the world.

Ultimately, rankings mean something if the context of their evaluation means something to the applicant, not otherwise. For someone wanting a good job in India, IIM-A is amazing and it doesn't matter if Wharton is tops or not or if INSEAD is truly diverse. I would think the same holds true for canadian schools.

rocketman said...

In the current rankings, some relatively small (less well-known) UK schools have surged, particularly Warwick and Cranfield. Do these schools deserve such a stellar ranking or is it because of the methodology that places too much emphasis on salary increases?
How can these schools even compare with some of the well-known Canadian schools that are the subject of a debate on one of these threads?

necromonger+nospam@gmail.com said...

Rocketman,

I do wish I had the time to look at different schools and combinations - but unfortunately I do not. It so happens that many readers visit this blog and often read these ranking posts - so you could potentially analyze some interesting aspects and leave a comment. That could help those who wonder on similar lines :)