Why MBA Rankings Are (Partially) BS

Do MBA rankings matter? Broad tiers do, but the exact numbers are meaningless. MBA rankings are based on arbitrary formulas that produce wildly contradictory results: Stanford is ranked #1 by both US News and Bloomberg Businessweek but #26 on the Poets & Quants composite. Chicago Booth is #3 on US News but #20 on the Financial Times. If the lists can’t agree on whether Stanford belongs in the top 25, the difference between #8 and #14 is hard to take seriously.

When I was a teenager, I used to hate talking about college admissions with my father. He was absolutely convinced that there was, somehow, a big difference between the #12-ranked university and the #14-ranked school, based solely on US News & World Report’s annual list. On multiple occasions, I’ve told him that he’s completely full of crap. Now, I’m going to tell you why he’s full of crap.

MBA Rankings Are Based on Arbitrary Formulas

First of all, keep in mind that MBA rankings are based on completely arbitrary formulas concocted by journalists. I’m not saying that the basic components are necessarily flawed (who would disagree with the notion that salary increases, reputation, and student selectivity are good indicators of the quality of an MBA program?), but there’s some randomness in the way that any particular list might choose to quantify and weight these measures. They should always be taken with a grain of salt.

The arbitrariness has only gotten more obvious over the past few years. Two of the five major ranking systems that existed a decade ago are gone, and the survivors weigh completely different things. We’ve broken down exactly how each formula works, but the short version is that no two of them are measuring the same thing. Fewer lists, somehow even less agreement.

The Contradictions Are Worse Than Ever

And then there’s my favorite indicator of the stupidity of MBA rankings: the contradictions among the surviving lists. Here are a few of my favorites from the most recent cycle:

Stanford: #1 on US News and #1 on Bloomberg Businessweek, but #26 on the Poets & Quants composite after withdrawing from one of the underlying rankings. Number one and number twenty-six for the same school, in the same year!

Chicago Booth: #3 on US News, but #20 on the Financial Times and #12 on P&Q. A 17-position gap, with no clear reason for the difference.

Berkeley Haas: #3 on Bloomberg, #9 on the Financial Times, #10 on US News, but outside the P&Q top 10 entirely.

Kellogg: #1 on P&Q for the second consecutive year, but only #4 on US News and #5 on Bloomberg. The top-ranked school on one list doesn’t crack the top three on any other.

Darden: #5 on P&Q and #10 on Bloomberg, but outside the US News top 10 at #11.

Michigan Ross: #9 on P&Q (up 20 spots from the prior year), but absent from every other list’s top 10.

Would anybody out there really believe that Stanford, the #1 school on two separate lists, doesn’t belong in the top 25? Would any of you say Booth isn’t a top-10 program, as the Financial Times apparently believes?

How to Actually Use MBA Rankings

All I’m saying is that these MBA rankings should be taken with a big, fat grain of salt. If you’re thinking that you want to go to a “top 10 b-school” or a “top 20 MBA program,” make sure that you don’t rely on just one of these silly, arbitrary lists. (And for what “top 10” even means, we have thoughts.)

Rankings can still be useful if you treat them as rough tiers rather than precise orderings. Broad groupings (top-tier, upper-tier, mid-tier) do correlate loosely with recruiting access and brand recognition. But the difference between #8 and #14 is statistical noise dressed up as journalism, and building your school list around that noise is a mistake.

Look at career outcomes for the specific role and industry you want. Talk to alumni. Visit campuses. Use the rankings as one imperfect signal among many, and then make your own list based on what actually matters to your career.