Does the GMAT matter?

If you either know me personally or are a regular reader of my GMAT blog, you know that I’m not always fond of the GMAT.  I honestly enjoy some of the intellectual and psychological challenges presented by the exam, but I often cringe at the actual content of the test.  I’m simply not convinced that your knowledge of number properties or modifier placement will ever help you to become the CEO of a successful company. And that brings us to a (somewhat unanswerable) question:  what is the GMAT good for, anyway?  And can we prove that the GMAT is a useful measure of… something?

As I mentioned in an earlier blog post about the new Integrated Reasoning section, the writers of the GMAT spend a lot of time proving that the GMAT is “valid,” and their official GMAT blog often goes to great lengths to remind us of the GMAT's value.  GMAC’s definition of the word “valid” is interesting, though:  most GMAT validity studies simply examine the correlation between GMAT scores and students' grades during the first year of business school.

By this measure, the GMAT is an outstanding exam, and it does an excellent job of predicting test-takers’ academic performance upon entering business school. If you feel like geeking out on some of the numbers, you can check out a classic GMAT validity study here.

But the GMAT isn’t really designed to predict anything else.  Yes, the GMAT correlates strongly to your grades during your first year of business school.  But your grades in an MBA program don’t correlate strongly to success in the business world—and neither do your GMAT scores.  According to a recent article in Forbes, the GMAT doesn’t seem to predict to post-MBA salaries at all, despite the fact that a handful of high-paying finance and consulting firms still use business school grades during the hiring process.

Many of us have an unfortunate habit of blowing the GMAT way out of proportion, and we act as though it’s a measure of general intelligence or business acumen.  It isn’t either of those things.  The GMAT is a fantastic measure of a specific set of quantitative and verbal reasoning skills, and validity studies have proven that those reasoning skills will help you get good grades in business school.  Beyond that, the GMAT isn’t a great indicator of success.

So next time you get your butt kicked by some GMAT questions, don’t take it personally.  The GMAT isn’t telling you that you’re stupid, or that you won’t succeed in business.  It’s just telling you that you might not have the specific skills required to get a high score on a very specific standardized test.  And even if you’re getting your butt kicked by number properties or modifier placement rules, you might still be an absolutely spectacular business mind, destined for a lifetime of financial success.