With the upcoming changes to the GMAT format, it’s understandable to feel overwhelmed and unsure of where to start. 

In the latest episode of Business Casual, our hosts John, Maria, and Caroline break down the upcoming changes to the GMAT format and discuss how they could impact your business school applications. They will cover everything from the removal of the writing Analytical Writing Assessment to Integrated Reasoning section’s removal for something called Data Insights.

Whether you’re a seasoned test-taker or just starting your GMAT journey, this episode is a must-listen for anyone looking to succeed in their business school applications.

Episode Transcript

[00:00:07.610] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast co hosts Maria Wich Vila and Caroline Diarte Edwards. The big news right now is the new GMAT exam. GMAC, the administrator of the test, has announced that it will release a newly updated, shorter, or light version of the GMAT later this year. It’s going to be dramatically different than the current test. Among other things, it’s going to be shortened to almost by nearly an hour, and it will eliminate the writing requirement in the GMAT, the writing Analytical Writing Assessment. It will be composed of three sections, each 45 minutes long, quant, verbal, and then the Integrated Reasoning section will be removed for something called Data Insights. Ultimately, I think the reason for the test is simple. GMAC has been losing market share for quite some time to GRE. Standardized testing as a whole is viewed to be a friction point, another hurdle that applicants have to overcome before they apply. And to the extent that that is making fewer people apply to business school. That is a problem at a time when particularly domestic applicants to full time MBA programs have been declining for some time.

[00:01:37.410] – John

So I wonder, Maria, is this something you welcome? And Caroline, is this something you welcome, having been the former admissions director at INSEAD who very much relied on the GMAT test, who wants to take it first?

[00:01:53.840] – Caroline

Yeah, we’ve discussed this before. Right. I think referring back to our previous conversation, I think we’ve pretty much called this change. We discussed the fact that it’s a very long test, right? It’s 4 hours. I don’t think it necessarily needed to be 4 hours. The GMAT already had launched the executive assessment, which is a much shorter format and seems to be pretty effective for schools in helping them to assess candidates for the executive MBA. So given that success, it seemed like there was an opportunity for the GMAT for GMAC to shorten their test. And as you say, I think it’s a competitive response. Right. And I think this goes back to several years ago, when GMAC took the contract away from ETS to administer the test and gave it to Pearson View. And so ETS, in order to win back market share, started pushing the GRE. Right. So in some ways, GMAT created this monster and created this competition by shifting the market dynamics when they changed that contract several years ago. So they’ve faced competition from the growth of the GRE, also now, of course, increasingly test waivers. So candidates feeling that they don’t need to take the test, I think they feel that if you can make the test less intimidating, then why not?

[00:03:30.210] – Caroline

So I’m certainly in favor of that, making it more approachable for candidates. And I think another factor is also that, and this may not have filtered through much yet, but it will do gradually. In the US. At least, students have been very used to taking standardized tests because of the undergraduate market and taking the Sat or the act to get into undergraduate programs. And so now that there are more and more colleges that are test optional or won’t accept tests for undergraduate programs, there’ll be more and more students coming into the system for graduate programs that have never taken a standardized test. So they will also be less inclined to take a standardized test to get into a graduate school. And the idea of taking a four hour test will be even more horrific. So I think the schools will have to be more flexible in future because they’ll be dealing with a different market than they have dealt with in the past.

[00:04:40.490] – John

Yeah, that’s really true. Maria, your take.

[00:04:43.580] – Maria

Yeah, I agree with all of that. And I think if I were to put on my admissions hat, this is in a way, a good way to almost get a bit of a respite from the GMAT arms race that has been happening these past several, several years, right where the GMAT is such a key part of particularly the US News Ranking. And, yeah, they say they also collect the GRE, but when you go to the US. News ranking site, they don’t show the GRE. You have to dig for that number. But the GMAT, the average GMAT is right there, front and center. And I think that a lot of schools have thus been trying to game the rankings a bit by focusing so much on that average GMAT score that I think other things perhaps have been lost in the process. And so now if we’ve got a third score, I mean, this season is going to be bonkers for admissions officers because they’re going to have either four potential things. They’re going to have a test waiver, people applying without a test. They’re going to have people applying with the old GMAT, people applying with the GRE.

[00:05:42.710] – Maria

And now in Round Two, only because if the test nobody knows if the test is going to come out in the summer, in the spring, or in the winter, but if it comes out out at any point after, say, August, then presumably it’ll be too late for anyone in Round One to take it. So now you’re going to have some people in Round One who weren’t able to take the test and some people in Round Two who were able to take the test. And so I don’t even know how to do the apples to apples comparison there. So from a usage of the test as an apples to apples comparison of someone’s intellectual horsepower, I think it’s going to be a big mess. But if I’m an admissions officer and I’ve got some candidates, that it’s. Now apples and papayas and oranges and cumquats. Like, we got all kinds of things in the mix now. So I don’t know how to compare that. But from that perspective, that would be annoying. But if I am an admissions officer and I want to accept someone into my program whom I might otherwise hesitate to, if they had a low GMAT score, and I might think like, oh man, they might drag down my average, and what are the cascading effects of that?

[00:06:40.110] – Maria

Now? I can just say, like, well, this is a brand new it’s a brand new test and nobody knows what it means and what are the percentiles, and we’re not going to have that same intuition the way we do. If somebody says, oh, that person has a 740 on the GMAT, all of us immediately intuitively know that that’s a good score. But now if you have a 37.6 on the new or whatever that grading score, we don’t know. Nobody’s going to have a real intuition of it. And so I think that gives the schools a useful excuse to still require a test and yet not be so beholden to achieving a certain number. I think it’s a good middle ground for them where we understand that the original GMAT was just way too big of an ask. But this way, look, it’s the new friendly GMAT, so surely you can take the friendly GMAT Mr. Or Ms. Applicant. And so hopefully it won’t be too big of an ask, but we’ll still free them from the shackles of the aim for the 730 average.

[00:07:38.070] – John

Yeah, that’s really true. Do you think that making the test shorter will result in any increase in applicants to graduate management education or not?

[00:07:50.550] – Caroline

I’m sure that’s what they’re hoping is that it will reverse the decline in GMAT takers. So time will tell. Right. I think that the trends are against them. Right. Because schools are increasingly becoming more flexible with test requirements, and I don’t think that the candidates will continue to take the GRE. That continues to be a good option. So perhaps it will, to a certain extent, reverse the decline in GMAT test taking. I’m sure that’s why they’re doing this. So yeah, hopefully it will bring some more candidates into the pool. That’s certainly a positive thing. So we’ll have to wait and see what happens. But that’s got to be the goal here.

[00:08:37.860] – John

Yeah. There’s some speculation that they could retake some market share from GRE because GRE is a bit more constrained in altering its test and making it shorter because it applies to a lot of different graduate schools, not only business. So they may have more difficulty shortening the test to match this competitive move by GMAT. The other thing is, this is something that’s been in development at GMAC for at least two years. The person who is bringing it to fruition had been in charge of the project as Chief Product Officer of the organization, as now CEO, newly elected as a result of conversations with all kinds of stakeholders, from program directors, faculty, and deans. They even spoke to thousands of candidates. They had live focus groups and all this kind of thing, but we don’t know how it will play out, right, because they haven’t actually tested it in the field. They’ve done some simulations that suggest the correlation is as strong to your ability to easily master the core curriculum and the quantum, but it hasn’t been time tested with real people over years of being in MBA programs and seeing how those people perform after they’ve been admitted.

[00:09:59.970] – John

So that’s a big question mark as well. So we don’t know how that will turn out. I’m assuming that the psychometricians at GMAC kind of know what they’re doing and that the correlation will be as strong as it has been for the longer test. But they’re also thinking that it increases the relevance of the test because there’s greater diversity among the candidates today than previously. And they’re applying to a much broader mix of programs using these standardized tests. So they actually think that this new test is more relevant to both the diversity of the candidates and the mix of programs, which is kind of interesting to me. I don’t think it removes the anxiety and the dread that almost everyone feels when entering either an exam room or turning on your computer to take the test. Do you think it’s going to relieve any anxiety. Maria?

[00:10:58.840] – Maria

Well, first of all, if I’m someone who hates writing essays, it’s certainly going to relieve that level of anxiety. So I think it’s going to relieve some anxiety insofar as my understanding is that they are removing certain test topics altogether, some of which may or may not have been of any use at all. I think geometry is being removed. I don’t know about you, but I don’t really use geometry ever. I think from that perspective, I think there will be less, not only the shorter duration, but I think, the shorter scope. And I welcome the increase in what used to be called the integrated reasoning type questions, because those are, I think, more useful and more representative of what someone in a business environment does need to analyze. So I think it will be less. There will always be anxiety, of course, but I think there would be if you if you told someone you have to take this one or this other, the first test or the new test, I think there would be more anxiety for taking the current test.

[00:11:55.450] – John

Yeah. Now, many of the details about the test have yet to be released. On March 28, GMAC is coming out with an announcement that will give a little more detail about the test and the timetable along with the pricing. Will it be cheaper because it’s shorter. Or will they maintain the price structure, or will it in fact be more expensive because it’s brand new? We don’t know. What we do know that has been leaked on poets and quants, I might add, is that the quantitative reasoning section will be reduced by ten questions to 21 from the current 31 questions, which is how they’re reducing the time it takes to complete that section to 45 minutes from 62 minutes. The verbal reasoning portion of the test is being cut by 13 questions to 23 from 36. And then on this Data Insights portion, which replaces the integrated reasoning piece, they’re going to boost it by eight questions to 20 from twelve, and increase the time devoted to that part of the test by 50% to 45 minutes from 30 minutes. And I think this is where they think the test will be more relevant for what schools expect today on things like data sufficiency, multi source reasoning, table analysis, graphics interpretation, and other things that get at the more analytical nature of what MBA programs are teaching today. So that will be really interesting. Do you think it makes the test less valuable for an admissions officer, Caroline, having used this test as an admission service?

[00:13:44.870] – Caroline

Well, as Maria said, there’s going to be a transition period where there’s going to be some guesswork to do, right? Because they won’t know. They won’t have any point of comparison with any historical data to be able to see, okay, well, this person has this score, and how does someone with that score typically perform on our program? It’s a blank sheet of paper, right? So they will be admitting people based on the data that they’re getting from GMAC about how that score correlates with previous GMAT scores. And then they’ll be cross checking that with candidate academic track records from their undergraduate degree. They’ll be looking at their profile holistically and cross checking very carefully. So I think it will take them, they’ll have to spend a bit of extra time scrutinizing profiles to be sure that they have the academic requirements, because that’s very important. Schools do not want to admit candidates who are going to struggle academically, right? That’s an absolute nightmare. If you admit a student, and I’ve seen it happen, right? Candidates who students who come in, who with the best will in the world, doesn’t matter how motivated you are, if you don’t have the academic ability, you’re going to struggle in the classroom.

[00:15:13.830] – Caroline

It’s a bad experience for you, it’s a bad experience for the school. And it does happen that people don’t get through the program, right? And it’s a total mess. So nobody wants that to happen. And so they will be spending extra time scrutinizing those new scores and the profiles and seeing how those scores cross check with other elements of the profile to make sure that they feel confident. But as you say, GMAC has a huge amount of experience in developing these tests. I’m sure that they have done a lot of they’ve kicked the tires on this. I’m sure that they have done a lot of work with the schools. They’ve done this in consultation with the schools. So I’m sure that they have a pretty high level of confidence that when they roll this out, that the schools can rely on this. And likewise, the schools wouldn’t have let them go ahead with it, right, if they didn’t feel confident that this was going to be a positive move for them. I would expect that it will be a positive move and that whilst there will be some extra scrutiny required in the first season or so after that, I’m sure that it will be a very positive thing from the admissions office’s perspective.

[00:16:45.330] – John

Yeah. And just circling back to what you said earlier, Caroline, I’m sure one of the worst days an admissions officer can have at a school is when a professor walks in and says, how in the world did you admit this student?

[00:16:59.910] – Caroline

Yeah, it’s a mess when that happens. Nobody wants that to happen. Right? And the school works with the students to help them get through. But you really want to avoid the situation where someone starts to struggle, right. You want to get people in that classroom who are going to be successful. That’s the goal. And candidates get frustrated that they get rejected on academic criteria. But at the end of the day, you are applying to an academic program. And no matter how professionally successful you are, you do need to meet those academic criteria, because you do need to be able to demonstrate that you’re going to flourish academically, because it’s not going to benefit you and it’s not going to benefit the school, and it’s not going to benefit your classmates if you can’t keep up.

[00:18:00.330] – John

Maria, for you. For candidates who will be applying either in Round One, Round Two, or even Round Three in the next cycle, what should their strategy be based on this news from GMAC? Should they prepare for the current version for the end of the year? Probably on Round One applications, they will have no other choice. Do they prepare anyway for the tougher test? And then if the newer version comes out in time for Round two, do they basically take the new test and feel that they’ll be over prepared for it by preparing for the current one? What’s your advice?

[00:18:40.310] – Maria

I think it’s going to vary based on each individual person and what their strengths are as a test taker. So if they are someone who, let’s say they’ve done a few practice tests for the current GMAT, and the sections that we think are rumored to be eliminated are the parts that tend to trip them up, then it might be worth waiting for that next version to come along. I also can’t help but wonder if there will be quite a bit of leniency this year with the new light GMAT test. Because, Carol, no one’s going to know what to make of these scores. And so because of that, if I know I want to submit a test, maybe this new GMAT might be the right way to go. Because if nobody really knows how to make heads or tails of my score, and I’m not totally confident in my score. Maybe this is the great opportunity for me to try something experimental and hope that it is solid enough to get me in, but does not subject me to the same level of scrutiny as a standard GMAT or a GRE score. That having been said, I think if somebody is looking to apply in round one, if they are from an overrepresented group, and so it is therefore all the more important for them to apply in round one, I would not sit around and wait for the new test to come out.

[00:19:57.170] – Maria

If you are not confident in your skills in the GMAT, then I would advise you to simply switch to the GRE and move on with your plans, as usual. Because who knows, right? Maybe it will come out like they’re saying it’ll come out later this year. But what if that doesn’t happen? What if, for whatever reason, there’s a bug in the system and it doesn’t come out until next year? I would hate to have somebody sit around waiting just for this new test that may or may not happen, that may or may not have certain traits associated with it. So I think yeah, study for the GMAT or the GRE, as usual. I think it would take a certain amount of self awareness for someone to say, AHA, yes, the parts that will be on the new GMAT are probably things I am very good at, therefore I should wait. But that seems like a risky game in terms of the timing.

[00:20:40.920] – John

Yeah. I mean, on the surface of it, I’m thinking that if English is a second language for you, these test changes are to your advantage. Number one, there is no longer an analytical writing section that would have taken 30 minutes, and if English is a second language, that would have posed a special challenge. Number two, the verbal section of the test is being caught more than any other section by eliminating 13 different questions. So that’s got to help someone who is English as a second language. So I’m thinking that this could be especially helpful to people who are in other countries around the world and who have to face an English test to get into an elite business school. Caroline, you think that’s true?

[00:21:26.780] – Caroline

Yeah, that’s a very good point, John. There’s definitely a difference in, as you say, it is harder for someone who’s not a native English speaker to take the GMAT, and that is taken into account by the schools. But still, it is a big amount in decline for someone, and obviously they want to do well in the GMAT and prove their capability. It is definitely more difficult. I wouldn’t fancy taking the test myself in one of the foreign languages that I speak. Right. It’s bad enough taking it English, never mind a foreign language. I think that makes sense that switching the focus elements that are less language focused. Having said that, of course, when you do go to business school, a big part of the academic work is plowing through large volumes of material. And for preparing for classes, you will need to be able to read through cases pretty quickly. So the schools still need to be confident that whilst maybe you don’t necessarily master some subtleties of English grammar to the same extent, but you do need to be able to plow through vast quantities of English reading and be able to express yourself very coherently in the classroom.

[00:23:06.050] – Caroline

So that’s something that they still need to be very confident in. But there’s other ways that they can check that, right. It doesn’t necessarily just through the GMAT.

[00:23:14.610] – John

That’s true. And I will say one underrated aspect of the GMAT and studying for it, frankly, is that it is a step in the right direction of preparing you for a rigorous academic experience. For people who’ve been out of school for three to five years, just tackling the questions on a practice GMAT I think is terrific preparation for the quant in the core and the rigor in the program just to get you back into that frame of mind. And I think that’s often underappreciated by applicants who have to go through the grueling process of prepping for the test and crossing the fingers and hoping they. Get a 700 plus score to get into a really good school. But I think there’s value in that.

[00:24:04.820] – John

And I think that value will remain. With the shorter test. So there you have it. New GMAT will come out before the end of the year. We don’t know exactly when, but it’s a very big change. It’s really the most significant change in. The exam since it went from paper and pencil test to computer quite a few years ago. I think that in general, people are going to like this because it is shorter, it’s not as weighty, and after all, sitting down in the exam room or at your home on your computer for something like three and a half hours, once you include the breaks that you’re able to take, those are optional.

[00:24:51.700] – John

Breaks is a long haul. This reminds me of what D at Harvard Business Ball would often say when she shortened the number of essay questions required for admission to just one. She basically said, look, it’s not an essay writing contest to get into business school, and it shouldn’t be, which is why I was reducing the number of essay questions at Harvard down to only one. And it shouldn’t have to be. A ruling three and a half hour test that you have to pass to prove the simple thing that you can do a relatively easy math and calculus so that you don’t struggle through a quantum course in an MBA. Same kind of thing. There you have it. Well, thank you, Caroline and Maria, for your insights. And thank you to all of you out there who listen to us. This is John Byrne with Poets and Quants. You’ve been listening to Business Casual, our weekly podcast.