An Autopsy Of The U.S. News MBA Ranking
Maria |
May 3, 2023

In today’s highly competitive business world, MBA rankings play a crucial role in determining which business school to attend. However, the methodology used by ranking organizations has come under heavy criticism in recent years. In this episode Business Casual, our hosts explore the flaws of the US News MBA ranking and the impact it has on students, schools, and the business world at large. This episode delves deep into the inner workings of the ranking system and provides valuable insights for prospective MBA students and business schools alike. 

Whether you’re a prospective MBA student or a business school administrator, this podcast episode will shed light on the ranking system’s inner workings and help you make informed decisions.

Episode Transcript

[00:00:07.050] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. And my co hosts Maria with Villa and Caroline Diarte Edwards. Of course, this is Business Casual, our weekly podcast. Caroline, as you well know, was the former Director of Admissions at INSEAD and is now an admissions consultant and a director of Fortuna Admissions, where she was one of the founders. And of course, Maria is our favorite Harvard MBA grad of all time, and she is the founder of Applicant Lab. We are here to do another one of our rankings analyses. We have a new ranking from US news and World Report. This is among the more interesting US News and World Report rankings, and I’ll tell you why. For one thing, the ranking organization actually delayed the release of this ranking by a full week after sending an embargoed copy to the deans and receiving sort of an outpouring of protest and complaint. Most of those complaints, I believe, in fact, came from law and medical schools, many of which wanted to boycott the ranking. But US News ranked them anyway by getting data from publicly available sources. There was no such boycott in the business school arena.

[00:01:28.230] – John

Nonetheless, we got our hands on what US News sent the schools a week before the release. And there are some dramatic differences between that list and the list that was ultimately published. There is no explanation from US News as to how some of the schools changed the rank in one week. But that’s just one of many mysteries. The number one school this year is a repeat Chicago Booth, which last year tied Wharton for number one. Number two is Kellogg, which had been number three last year. Wharton slid down two spots to three. MIT is next, even ahead of Harvard at five. And now Harvard has been fifth in this ranking for three consecutive years. The big surprise among the top ten is Dartmouth Tuck. Dartmouth Tuck, which was outside the top ten last year, moved up five places to number six, ahead of Stanford. Stanford fell three. In fact, three prominent schools fell three places in this ranking. Stanford down to six. But then, interestingly enough, Columbia and Berkeley both down three and out of the top ten. Rounding out the top ten is Michigan at eight, el tied at eight with Michigan and then NYU Stern at ten.

[00:02:56.470] – John

The one thing that you always know about rankings is you’re going to find people who love them and people you hate them. So I’m imagining if you’re at Chicago booth, you’re loving this ranking. I’m imagining that if you’re at Stanford, you’re completely ignoring it. And if you’re Columbia or Berkeley, you can’t believe you’re not in the top ten, and you know the whole damn thing is ridiculous. Which one of you want to go first on your thoughts?

[00:03:23.580] – Caroline

Well, it is quite a dory, as you say, John, and it’s interesting to read through your articles analyzing the differences as a methodology here. I think schools don’t change dramatically from year to year, right? So it’s kind of crazy to shuffle everything around so much from one year to the next. And frankly, we all know that publishers do that to make a story, right? And to drive traffic and attract eyeballs, et cetera. So if they just publish the same list year after year, then it wouldn’t get any attention. So they need to make a story. But I think they probably got more stories than they bargained for with this one. I’m sure that they’ve had a bigger backlash than they had anticipated with this. But there’s no perfect methodology, right? You’re never going to have a methodology that keeps everybody happy. And I think to me, the value of some of these rankings is the data collection that they do. And I would encourage candidates to dig into those various data tables behind there and figure out what is important to them as an individual. And that can be a very useful data source as candidates think through what are my criteria and what is important for me and what is going to be a good fit for me.

[00:04:58.350] – Caroline

And I would discourage candidates from just looking at those headlines and just looking at the bare facts of that list and taking that as God given truth, right. An MBA is a very complex proposition, right. There’s so many things that go into making an MBA experience, and you cannot distill it into a fixed number of criteria and data that will perfectly represent the quality of a program. And as I said, what suits one person and what is important to one person will be different to another candidate and another student. So it’s a bit of an artificial exercise to start with. And frankly, for the schools, it’s often very frustrating that people care so much about the rankings, right. As you said, schools can get very excited when they do well in the rankings, but they’re also very keenly aware that you should be careful not to celebrate too much one year because you don’t know what’s coming next year. It’s better not to state your reputation on a ranking, right? So it’s a game that the schools kind of have to play, but with gritted teeth.

[00:06:26.190] – John

Indeed. And one of the things you didn’t mention, that I would have expected you to mention, is that this ranking is totally US centric in a world that is very global, particularly the business school community. And that is one major handicap. And even worse, I’m going to just point this out they changed the methodology so that if a school had more than 50% of their enrolled students who are not from the United States, the school gets penalized. So, in effect, this ranking is going to have the really unintended consequence of limiting enrollment of international students at second tier schools. Which is a shame, because as we said here year after year now domestic applicants have been in a severe decline for a number of years. That decline has been made up by a lot of international candidates, many of whom, frankly, are more qualified to attend these programs than some of the domestic applicants that apply. And now us. News has put together a formula that basically discounts students who are international. And I’ll tell you how they do that. They’ve decided that if you’re an international student and you don’t have a 4.0 GPA on your undergraduate transcript, you can’t count that GPA.

[00:07:48.070] – John

And so that is a real big problem, because if in fact, half your or more than half of your international students are in that incoming class, basically those GPAs go out the window and only the domestic GPAs are counted. And then there’s some other adjustment that’s made. So that, in fact, if Chicago Booth had a 60% enrollment of international students, their average GPA for the class would go from something like 3.7 to 2.7. Whiz. Bang. There it goes in the black box. There it comes out. No one knows what really happened, but in any case, it’s not a real number. Maria, don’t you love that?

[00:08:33.040] – Maria

My favorite thing that I love more than real numbers are numbers that are based on completely arbitrary cut offs. So when you were talking about the penalty for the schools that have less than 50% of American students with 4.0 GP, I mean, why 50%? Why not 75%? Why not 20%? It was just such a weird you almost feel like they got some weird results perhaps the first time around, and then went back and said, Whoops. Well, this didn’t quite give us what we were hoping for, so let’s just play with that little number in Excel and see how things show up if we end up changing it. I was initially excited when I heard that the US news was changing its methodology, because as we have said many times before on this podcast, they are all flawed methodologies, and they had had so much outcry with their law school rankings. And so I was excited because I thought, oh, they’re going to take into account what the ecosystem and what the MBA community has to say. And it was really funny because I was reading your article and you said, well, except they didn’t really consult with any of the business school deans in terms of these changes that they made, and I think it really shows.

[00:09:45.740] – Maria

So I was excited when I heard that they were changing the methodology, but then when I saw the changes that they made, I thought, oh no, this is going backwards. This is worse than it was before. And I was sort of cackling to myself, I thought to myself, if US. News were making instead of making an MBA ranking, if they were making a rocket ship and the rocket ship blew up, this is a random hypothetical example, but if the rocket ship blew up four minutes after launch, right? And you go to us. News and you’re like, hey guys, you can’t have a rocket ship blowing up after four minutes. They’re like, okay, yeah, totally get it. How about if we make one that blows up after 10 seconds after launch? And you’re like, no, you’re going in the opposite direction. And so for me in particular, one of the things that I thought was just a real banging my head against the wall was the increase in the importance of the GPA. Not just the international stuff we were talking about, but in terms of like, it’s now 10% of the ranking versus before it was seven and a half.

[00:10:46.020] – Maria

And then the reduction of the GMAT and GRE scores, which used to be sort of 16ish percent, and now it’s 13%. And I understand that in a post COVID world, schools are going test optional, et cetera, et cetera. But as we have talked about ad nauseam here, at least the tests are standardized. Something like a GPA is in fact, not only I think it’s a nonsensical number to even look at because someone with like a 3.1 in electrical engineering from Cal Tech probably frankly has a lot more brain power than someone with a 4.0 in comparative navel gazing from online correspondence school. So it’s such a silly thing to look at GPAs to even weight them at all, I think, because they don’t say anything at all about someone’s academic prowess or their intellectual horsepower, and they made it more important. I don’t even know what to do anymore.

[00:11:47.480] – John

Yeah, it’s true. And I should point out that what they made more important as well is the career outcome piece of this. So starting salary and bonus and then employment at graduation in three months. Those three metrics are now 50% of the weight of this ranking. They have been 35%. And what was diminished is a very controversial piece. It’s their so called peer assessment survey, where they send out surveys to deans and senior faculty members and essentially ask them to rate the schools. And there’s been a long suspicion that’s little more than a popularity contest, if you’re filling out the survey, you’re going to rate your own school very highly. There’s no evidence that us. News actually even corrects for that. And more importantly, what do you know about what goes on at other schools, particularly hundreds of other schools or even dozens of schools? You probably don’t even know what’s going on in your own school, never mind elsewhere, to be able to rate them. So this long held suspicion is that people just take out the previous year’s ranking and more or less follow that well, they diminish that peer assessment ranking. They also diminished to some degree, although less so.

[00:13:04.460] – John

Their corporate recruiter survey, which frankly is from all that I know, it’s not a very good credible survey because of the way it’s done. Not enough due diligence is performed on that survey. And I can guarantee that most of the really good firms that recruit the bulk of MBAs don’t even fill it out. And actually to support that, US News doesn’t even give a response rate and doesn’t even tell you how many of those surveys it sends out, which is a real journalistic no no, and really to me evidence that it’s a garbage survey. So they did diminish that a little bit as well. All these changes, incidentally, do result in even more variation than is typical year over year. And say what you will about the peer assessment survey, which I am no fan of, incidentally, but it was a stabilizing anchor on some level because it prevented more movement than otherwise would occur in this ranking because of the very big changes. And in fact, I believe these are the biggest changes US News has ever made in the MBA ranking since it first came out back in 1989. You see a lot of movement in this ranking.

[00:14:23.650] – John

It’s very topsy turvy. One school actually fell by over 40 places, even though nothing at all has changed. It’s just kind of pretty remarkable, to be honest. Caroline, though, what do you think about this? Penalizing schools with more than 50% of the international student body?

[00:14:47.210] – Caroline

Well, yes, the mind boggles, right?

[00:14:51.060] – John

What do they want?

[00:14:51.710] – Caroline

They want schools to stop admitting international candidates. Great. I mean, apply to there’s a lot of wonderful international schools.

[00:14:59.160] – Maria

They can go to India.

[00:15:00.020] – Caroline

They can go to London Business School. Perhaps they shouldn’t be applying to the top US schools. Is that what they’re saying? I mean, it’s extraordinary. I really don’t get it. And of course it penalizes a lot of schools who are actually admitting probably a lot of the international admits actually have much higher GPAs than some of the American students.

[00:15:20.740] – Maria

Right?

[00:15:21.290] – Caroline

Domestic students.

[00:15:22.740] – John

Absolutely.

[00:15:25.030] – Caroline

It’s a double whammy.

[00:15:26.390] – Maria

Right.

[00:15:26.780] – Caroline

Because they’re being penalized by having that percentage of international students. And then actually those international students are probably coming in with actually higher GPAs than the domestic students.

[00:15:40.410] – John

That’s definitely the truth.

[00:15:41.870] – Caroline

It’s really unfair, especially in the second.

[00:15:44.110] – John

And third tier arena where they’re having more trouble with domestics because the fewer domestics in the pipeline are being scooped up by higher ranked schools. So when you do pick international applicants, you’re going to pick them with they’re going to be very qualified, you’re going to have high GPAs. And then here’s this other issue. This class, in terms of the career statistics that are in this report, is the COVID class. So if you had a lot of international students and many of them weren’t able to get to the program on time because of visa restrictions or travel issues, that meant they actually started the MBA program little later than they typically would. And they took their early classes online, which affected their ability to get a summer internship and all that we know about recruitment at the MBA level. A summer internship for many of these two year programs is absolutely essential because it lines you up for a full time job offer. So then you have this extra whammy put on you if you have international students being this COVID class that may have had a little bit more difficulty landing that job offer after graduation without an internship.

[00:16:58.720] – John

And so then you have your career stats falling apart because this is the worst possible time to change your policy on employment in the ranking because it’s the COVID class. So lo and behold, some of these schools really got whacked and whacked severely in a way that I don’t think anyone expected because no one knew about these changes to the methodology and how they would in fact impact the ranking. Okay, what do you make of Dartmouth Tuck being ranked higher than Stanford? Maria, would that convince you if you were an applicant to both these schools and you were accepted to both to go to Dartmouth over Stanford?

[00:17:46.070] – Maria

No, it wouldn’t necessarily. But in fairness to Tuck, I just hate winter, so that’s a big part of it. But even separating out my ecosystem and temperature preferences, as we’ve talked about before, these are just rankings that are meant to get people talking. Caroline was bringing up this point even earlier in today’s discussion. This is not something that I think is really credible. And as you pointed out in the article, one of the big things that the rankings is really paying even more attention to now is that post MBA salary and the percentage of the class that is employed three months after graduation. And so places like Harvard and Stanford have relatively lower numbers because the students are choosier, because the students are not in a panic, because they know that if they really, really want a certain job, they are willing to hold out for it. They are willing to wait six months. They are willing to take an unpaid internship in their field of whatever their field is that they want to get into. They are willing to do these things in part because they have so many opportunities open to them, in part because I think the career services offices at these schools emphasize that your career is a marathon, not a sprint.

[00:19:04.600] – Maria

And so you might want to make a decision. You might want to join a startup right out of business school that maybe pays you a lot less than what it would otherwise pay, but maybe in the long term that ends up being the smartest decision you could have made. I think that that emphasis on the employment three months after graduation, this was another one that had me sort of banging my head against the wall. Was that’s a metric? That doesn’t necessarily mean anything, right? I could, as a career services office, put the fear of God into people and say, well, you’re not going to get any job offers after April 5. So you better take whatever’s on the table. And I don’t care if you hate it. I don’t care if you quit after three months and have a nervous breakdown. Who cares? I just need this US news ranking number to be higher. I mean, it’s silly. It’s really a myopic viewpoint, but you.

[00:19:52.530] – Caroline

Do it so well, Maria. I think that should be your next career move.

[00:19:59.550] – Maria

It’s going to be my side hustle. Yeah, it’s silly. It’s penalizing schools that have a higher quality student body. What? Crazy talks.

[00:20:14.010] – John

Yeah. And if you think about it, okay, even by all the metrics, okay, so Stanford is the most selective business school in the world. Number one, Stanford has the highest GPA, average GPA for its incoming class. Stanford has the highest medium. There are a few schools that are tied for 740 with Stanford, but if you look to the average, the Stanford average is higher than any other school. Stanford pay, starting pay, and bonus is higher than any other school this year except Harvard. And the difference is negligible. And of course, their peer assessment score and the corporate recruiter score is above Dartmouth. So the only way they lose is by US news changing the methodology so that employment at three months after graduation and at graduation loom large in the methodology. And that’s exactly where, as Maria points out, Stanford MBA doesn’t compare as favorably with Dartmouth. But in every other single metric that’s measured out of the eight metrics, Stanford beats Dartmouth on, let’s see, six of eight and loses on two. And yet Stanford is below Dartmouth Tuck. Just to even put a little ribbon around why those stats are low. Yes, it’s a self confidence of students.

[00:21:46.870] – John

Yes, they’re doing more individual searches instead of just taking what comes across the transom when the mainstream MBA recruiters come. And yes, they place more people as a percentage than any other business school in the world in venture capital and in private equity. Two places where no one does mainstream recruiting. It’s all one on one. It’s a job search. They don’t hire on a specific MBA recruiting schedule. It’s just in time hiring and it’s network hiring. And Stanford kills everybody percentage wise, in the numbers of people who go into those two highly lucrative fields. But guess what? They don’t have the orientation in June or May for the incoming students because that’s not how they operate. They don’t have that many positions open. They’re that selective. So for all this, Stanford gets penalized, which just is insane. But here’s the problem. People look at the ranking and they don’t know what’s behind it. And some people who are misinformed or uninformed entirely will take it for granted and not know that there is a reason why this occurs. And it’s largely due to methodology designed by some mindless journalists who knows little to nothing about business education.

[00:23:16.430] – John

But I will agree with Caroline that there’s a lot of interesting data in here, including the salary and bonus data, the GMAT data, the acceptance rates, which incidentally, are all up, as we would have expected and we’ve reported before based on the decline in applications last year. But still, fascinating reading, fun to talk about and always controversial. Maria and Caroline, thanks so much. And for all of you out there, take a look. We have already four stories on the site. On the ranking, we have our ten biggest surprises story, our overall analysis. We have a piece on the part time MBA ranking that US. News came out with. Berkeley, incidentally, was number one dislodging Chicago booth, which had been number one before. And we have a piece on the rankings on the specialty masters programs. So pretty complete coverage. And guess what? We don’t put it behind a paywall so you can actually see it and read it for free. I love that. All right. This is John Byrne with Poets and Quants. You’ve been listening to Business Casual.

The Economist Dis on MBAs: Is the Degree Still Worth It?
An Autopsy Of The U.S. News MBA Ranking
Maria |
May 3, 2023

[00:00:00] John Byrne: Well hello everyone, this is John Byrne with Poets and Quants, welcome to Business Casual, our weekly podcast with my co-hosts Maria Wich-Vila and Caroline Diarte Edwards. Today we have a special guest, Heidi Hillis from Fortuna Admissions. She is based in Australia, is a senior expert coach for Fortuna, and has three degrees, all from Stanford, a BA in English literature, that’s my degree, an MA in Russian studies, and an MBA from the Graduate School of Business. And we have Heidi here to discuss some really fascinating research. Here’s what Fortuna did. They dug into the last Two class profiles of the Stanford Graduate School of Business.

That’s the class of ‘23 and the class of ‘24. They looked up all these folks on LinkedIn to identify a little bit more about their backgrounds, including their former employers and their places of undergraduate education to come up with an incredible analysis. Heidi, welcome.

[00:00:46] Heidi Hillis: Thank you. I’m glad to be here.

[00:00:48] John Byrne: Heidi, what is, what are the big takeaways from your deep dive discovery?

[00:00:54] Heidi Hillis: It’s hard to know even where to start. I think there’s a quite a few interesting kind of trends that we’ve seen that have taken place over the years. We were mentioning before the call that traditionally there hadn’t been, 10 years ago, if you’d looked, you wouldn’t have seen so many tech companies represented, but now there’s a big presence of tech companies who are feeding a lot of these MBA programs in Stanford in particular.

I think that the thing that was really interesting was, looking, not just at where the companies that were feeding the students, the applicants to Stanford. When they were working there, when they were applying, but actually the paths that they took prior to their current job.

So how many people were working, if you look at McKinsey, for example, or Bain and BCG, those are obviously companies that feed a lot of applicants to the program, but we found 20%, which seemed to be normal of, the class came from consulting, but if you actually look into the numbers in their background, You would see that actually 37 percent of these two classes had worked at McKinsey sometime prior, or actually in consulting, so it was, it’s The kind of the patterns that are behind, what you would normally see in terms of what Stanford tells us.

So you get a sense of the paths that people have taken. And so that’s something that was really interesting to see.

[00:02:16] John Byrne: Absolutely. And of course, this is this analysis goes so far beyond what any applicant would learn by simply looking at the class profile that the school up because, this level of detail is never available to people.

[00:02:33] Heidi Hillis: No, and yeah, for example, you could see that, Stanford will say that they have around, each year around 50 percent of applicants are international, which is a great statistic and gives you lots of hope if you are an international student. But when you dig into the numbers, you actually understand that.

75 percent of the people who get into Stanford actually went to a U. S. University. So even if you’re international, it does have does seem to have kind of an advantage of having been educated in the U. S. That seems to be something that they look for. However, I think. The concentration of universities in the U.

S. that are feeding to Stanford is something also that, if you’re looking at it, you might find a little bit dis, disconcerting. There’s a few programs that are really, obviously the top. Programs as you would expect places like Harvard, Stanford, Yale, the Ivies but if you look at the international universities very diverse from all over the world, really lots of people from different places, which is also really interesting.

[00:03:38] John Byrne: Yeah I tell you, one of the things that struck me in the data is how consistent it is. 10 years ago, we did the same exercise at Stanford and a bunch of other. Schools from Harvard and Dartmouth and Columbia and talk and a few others and back 10 years ago, we found that 25. 2 percent of the class of 2013 were from Ivy League colleges.

And the Ivy League 8 schools, not including Stanford. And if you included Stanford, it would have been 32. 6%. So now, let’s move forward to your data. And in 23, 30. 7 percent went to Ivy League schools, even above the 25. 2. And in 24, 27. 9 percent went to Ivy League schools. So it looks like Stanford has gotten even a little bit more elitist than it was.

Yeah,

[00:04:41] Heidi Hillis: It’s, it is it’s what the data says, right? Obviously, this is a sample. We have 80 percent of the two classes. So we don’t know where those other people went. And that might skew the data a little bit in another direction. But it is, if you look at there’s 15 schools, that include the Ivy’s and then you have UC Berkeley and obviously Stanford that really are contributing, 49 percent of the class of 23, 47. 3 percent of the class of 24. So that is a pretty heavy concentration and But, if you actually look into the data, you see a lot of people also, each of these is actually an individual story.

You see a lot of people who come from other schools as well. So it’s not like you have to give up hope if you come from a different school. I see a lot of individual stories that, from the whole range of U. S. schools that really are feeding into Stanford. So I think what the data doesn’t also tell you, unfortunately, is how many of these Of people from these backgrounds are actually applying.

So

[00:05:39] John Byrne: good point.

[00:05:40] Heidi Hillis: It’s it’s hard to know. And sometimes I think people this is. A path that a lot of people who go to these schools plan to take from the very beginning. So I would see, it would be interesting to know that I don’t know that we will ever find that out. But, um, that’s something to keep in mind as well.

[00:05:56] John Byrne: Yeah. And that’s a fair point. Because how reflective are these results of the applicant pool reflective of an elitist attitude probably a combination of if I had to guess, but, it is what it is, and these institutions obviously are great filters, so you come from McKinsey, Bain, BCG, and you go to Harvard or Stanford or Penn, and you pass through a fine filter, and it makes you less of a admissions risk than if you went to, frankly, the University of Kentucky and worked for a company that no one knows of.

That’s just the reality of elite MBA admissions, right?

[00:06:40] Heidi Hillis: Yeah. And so you will see that the people who are not going, you’ll see a lot of the people who you would, the profiles that you would expect, the Harvard undergrad that then goes to Goldman that then was working at a PE firm.

That’s a really typical profile that you’ll see. But you’ll also see some really, unique and interesting ones, which I think, Okay. Helps you understand that if you don’t have that path, you also have a real chance at these schools, and maybe even more of a chance, again, not knowing, how many of those Goldman P.

E. Harvard grads are applying. So I’m thinking of the guy that I saw who he went to UPenn undergrad, studied engineering, started out a kind of pretty typical path working in private equity, but then made a big pivot to work for go to Poland where he was working in a real estate investment firm and the head coach of the Polish lacrosse team.

So you have really interesting profiles like that, that you can see that. aren’t necessarily taking that typical path. And sometimes that really does help you stand out.

[00:07:42] John Byrne: True. Maria, what surprised you most about the data?

[00:07:48] Maria Wich-Vila: Wow. I think we already covered, the, one of the biggest ones was the number, the percentage of people who would had some sort of either their undergraduate or graduate education within the United States.

Intuitively, I had felt that was true. And sometimes when I try to, give some honest, tough love to applicants from certain countries, and they’ll say, oh, but Maria, I think you’re being a little too pessimistic. After all, X percent of the applicants at these schools are international, and Y percent are from a certain geography internationally.

I’ll say yes, but that doesn’t mean that they’re all Solely from that area. A lot of them are, do have significant international educational experiences. I think another, speaking of the international piece the percentage of people who had significant international work experience as well was something else that really jumped out at me.

Because it would signal to me that Stanford really does value this global perspective both within probably its domestic applicants and also its international applicants. So I thought that was also a really interesting piece of data that jumped out at me.

[00:08:52] John Byrne: Now remind me what percentage was that?

[00:08:56] Heidi Hillis: People who are international

[00:08:58] John Byrne: who have had international work experience.

[00:09:01] Heidi Hillis: I think it was 30%.

[00:09:02] Caroline Diarte Edwards: Yeah. Yeah. Yeah, it’s pretty

[00:09:04] John Byrne: impressive.

[00:09:04] Caroline Diarte Edwards: 30%, which I was thrilled to see. As well as coming from in Seattle and Europe. Obviously the international schools put a heavy emphasis on international experience and I hadn’t fully appreciated that. A school like Stanford would also.

really value that to the same extent. And it’s great to see that candidates are making the effort to get outside of the U. S. and get international experience because I think you gain so much from that exposure. And you bring more to the classroom if you’ve got that experience. I know that both Maria and Heidi.

I’ve worked outside of the home countries as well. Pre MBA and I think that you just have so much more to contribute to the whole experience. And it was great to see that 30%.

[00:09:50] John Byrne: What else struck you, Caroline?

[00:09:53] Caroline Diarte Edwards: We talked about the concentration of academic institutions, and I was also surprised about the concentration in employers.

So while there is a very long list of employers where the students have worked pre MBA when you dig into the career paths that they’ve taken there is some interesting concentration. Heidi had noted that the reports that There are 26 companies that account for nearly one third of the class in terms of where they were working right before Stanford.

But when you look at their whole career history, those same 26 companies represent over 60 percent of the class. So that is, yeah, that’s quite extraordinary that so many of the class have experience of working at quite a short list of companies.

[00:10:46] Heidi Hillis: I think that’s reflective of, if you really think about it, you have a lot of these companies.

You’re talking about the Goldmans and the Morgan Stanley and McKinsey that have really large programs that recruit out of undergrad that are really training grounds for. A lot of people that then on to do, work in industry or go on to work for in finance in particular, a lot of people starting out at some of these bulge bracket banks and then going into.

Private equity or smaller firms. So the diversity within finance in terms of where they were working prior to MBA is quite large compared to consulting because there just aren’t as many consulting firms, but a lot of people in financing, a lot of different firms, but they, a lot of them really do start out in these training programs, these analyst programs that are so big and popular.

[00:11:34] John Byrne: Yeah, true. And looking back, I did this exercise as well. The feeder companies to Stanford 10 years ago in the class of 2023, 22. 8 percent from McKinsey, Bain, BCG, and your data, 22. 5 percent work there. Incredible consistency over a 10 year period. When you look at the top six employers 10 years ago, they were McKinsey, BCG, Bain, Goldman, Morgan Stanley, and JP.

Morgan Chase. They accounted alone for 34 percent of all the students in the class of 20, 2013 at Stanford. In your data for 23 and 24 they account for 29. 8%, just a few percentage points less. So remarkable consistency. And I think you’re right, Heidi, this is a function of the fact that these firms bring in a lot of people who are analysts and actually expect them after 3 to 5 years to go to a top MBA school.

So there’s a good number of them in the applicant pool to choose from and let’s face it, they’re terrific candidates.

[00:12:46] Heidi Hillis: Yeah. I think another pool of really terrific candidates that you see, and I don’t know what the 2013 data was saying, but is the US military, which is really, I think, again, something that I felt having worked with lots of military candidates myself, understand that, Yeah, intuitively, I would have expected, but to see it in the data is actually really interesting.

You just see Stanford in particular, I think, is really looking for leadership potential, and it’s so hard to show that as an analyst, as a consultant, but as in the military, these people have such incredible leadership experience that it really helps them to stand out.

[00:13:23] John Byrne: Yeah. And let’s tell people what the data shows.

How many out of us military academies,

[00:13:28] Heidi Hillis: In all in total, we had, 20 over the two years. So that’s in the two classes that we found. So that’s, a pretty large number. And they come from all the different academies, right? So you’ll find them from different, not academies, in the army, navy and the marines.

So you’ll see that. And you also see quite a few, in the data we’ll, we see a lot from the Israeli military as well, but that’s actually a little bit difficult to because every Israeli does go into the military. So it’s they have that in their background. Any Israeli candidate would have Israeli military background as well, but again, that’s.

Place that people can really highlight their leadership. So you had eight people from who had been, who were Israeli and obviously had military experience where they were able to demonstrate significant impact and leadership prior to MBA.

[00:14:18] John Byrne: Yeah. In fact, 10 years ago, roughly 2%. of the class went to either West Point or the U.

S. Naval Academy. Good number of people actually from the military. Maria, any other observations?

[00:14:34] Maria Wich-Vila: Yeah, I was also surprised at the fact that within those top employers And when we look at the tech companies, it was Google and Facebook and Meta with a pretty large showing. Google was actually the fourth largest employer after the MBBs and, but then, I was expecting there to be an equal distribution amongst those famous large cap technology companies.

So I, I would have expected even representation amongst Google, Meta, Microsoft, Apple, Nvidia, Amazon, et cetera. And yet. Apple and Amazon only had one or two people each versus Google at 25. So I thought that was really fascinating and it makes me wonder if perhaps it’s a function of maybe Google and Meta might give their younger talent more opportunities to lead impactful projects, perhaps.

I’m just guessing here, but maybe Apple and Amazon perhaps are more hierarchical. And maybe don’t give their younger talent so many opportunities, but I was really surprised by that. I would have expected a much more even distribution amongst the those famous those famous tech companies.

[00:15:40] John Byrne: Yeah. You’re right. And I crunched the numbers on the percentages and Google took three and a half percent of the two classes and that’s better than Goldman, Morgan Stanley, JP Morgan Chase. Facebook had 2. 7 percent and Microsoft at 1. 5, and I was shocked at Amazon because, Amazon is widely known as the largest single recruiter of MBAs in the past five years.

At one point, they were recruiting a thousand MBAs a year, but in, in one sense, maybe Amazon quite doesn’t really have the prestige. For Stanford MBAs who might rather work elsewhere, I think that might be is, you look at the employment reports at a lot of the other schools and Amazon is number one at a number of schools and very low percentage of people from Amazon going to Stanford.

We don’t know, of course, how many. Leaving Stanford and going back to Amazon, but it can’t be that many.

[00:16:41] Heidi Hillis: I wonder if there’s something about just a proximity effect here. You have the plate, like the meta and Google just being so close to Stanford, maybe it just, attracts more people applying because they.

They’re almost on campus and maybe, just being Amazon all over the world and different places could be not attracting as many. I don’t know.

[00:17:03] John Byrne: Yeah, true. The other thing, the analysis shows, and this is what you also gather from the more public class profile is really the remarkable diversity of talent that a school like Stanford can attract year after year.

It is, it blows you away, really. The quality and the diversity of people despite the concentration of undergraduate degree holders or company employers, it’s it’s really mind boggling, isn’t it?

[00:17:33] Heidi Hillis: Yeah, they come from everywhere and really interesting paths and even the people I think that, have those kind of typical paths, you see a lot of diversity within them as well.

So I think, even if you’re coming from a Goldman or a McKinsey having lived in another country or gone to done a fellowship abroad or running a non profit on the side. These things are actually what helped them to stand out. But you do see some really interesting, I think, profiles, too, of people who’ve just done, you get a sense of what it would be like to be in the Stanford classroom.

People from really unique and different backgrounds. People who come from all different countries and lawyers, doctors people who have run, nonprofits in developing countries people running large programs for places like Heineken or Amazon too. But, it’s a real diversity of backgrounds.

[00:18:27] John Byrne: Now, Heidi, I wonder if one is an applicant. Is this discouraging to read and here’s why if I’m not from Harvard, Stanford, Penn, Columbia, Brown, Cornell, Dartmouth, and if I didn’t work for McKinsey, Bain, BCG, Goldman, Google am I at a disadvantage and should I even try? Some people look at the data and come away with that conclusion.

[00:18:52] Heidi Hillis: I think it’s a reality check for a lot of people. I think it’s just, it’s really, it just helps people understand, what it, the difficulty of this, why it’s so competitive, but I think that there is, again, behind the kind of the percentages, you do look at these individual profiles and I would get, I would actually take a lot of hope from it if I were looking, as an applicant, because especially if you are.

Maybe a little bit more of a big fish or small fish in a bigger pond or big fish in a smaller pond you go to Rice or you go to Purdue or, and you do really well, those are the people who, they’re definitely looking for that diversity of background as well as the international.

I think that’s really neat. think that, instead of looking at the data and saying, why not, why I shouldn’t even apply, it’s why not me look at these other profiles of people who have taken really unique paths that that do get in. So I think it is actually a Kind of a mix of both, it is a reality check for a lot of people, but it’s actually, there is so much diversity in the data as well.

I think also one thing that we haven’t really covered is about is just the prevalence of social impact in, that’s really taken hold of the class. I don’t, again, going back to your 2013 analysis, I’m not sure how easy it was to tell that, but a lot of you can see reflected in the both the types of organizations people are working for, but also their titles and the kinds of work that they’re doing that that there’s a huge 40 percent of the class of the two classes had some kind of social impact in their background.

Whether that’s, running their own nonprofit on the side or volunteering or. Running trans transformational kind of programs within companies that are, either in finance or consulting or in industry. That’s a big trend. I think that people can take heart from as well.

So if you’re working if you feel like you’re in an organization where you’re not getting the leadership that you. can use to highlight your potential for Stanford, that’s definitely a place you can go is working for in volunteer capacity for a non profit or on the board of a of some kind of foundation.

Those are the kinds of places that you can highlight your potential

[00:21:00] John Byrne: true. And I know we have a overrepresented part of every applicant pool at an elite business school are software engineers from India. And I wonder in your analysis, how many of them did you find from like the IITs?

[00:21:18] Heidi Hillis: That’s a good question. The IITs, it was again, it was one of these you have about 50 percent of classes internet, so 25 percent of the class. was educated outside of the US. The IITs are going to be up there. Let’s see from India, 2. 1 percent of the class came from India. So probably, I don’t know offhand exactly how many of those were IITs, but

[00:21:43] John Byrne: I’ve had a lot of them.

[00:21:45] Heidi Hillis: Yeah, probably a lot of them. Although I think, that’s the other thing is that people who come, to work with me from India, they feel like if they haven’t gone to IIT, then that’s going to be a disadvantage. But I think, you’ll find that there are, there’s representation of other universities as well.

Definitely.

[00:22:00] Caroline Diarte Edwards: Yeah, I was just looking at the list of undergrad institutions. And for example, you’ve got Osmania University from Hyderabad. So it is not, it’s not all IIT. Okay.

[00:22:12] John Byrne: Yeah, exactly. And Caroline, 1 of the things about the institutions that are really represented here and that I don’t really see unless I missed it.

I didn’t see a Cambridge or an Oxford. Two of the best five universities in the world. And I wonder if that’s just a function of fewer people in the applicant pool or what? What do you think that could be about?

[00:22:36] Caroline Diarte Edwards: I had a look through the uk Institutions and you have got cambridge in there.

I think I also noticed. Bristol university there are a few different universities. So i’m aston university, which is not it’s not on a par with Oxford or Cambridge. So I think that speaks to the point that Heidi made that you don’t have to have been to an elite school to get into Stanford.

Aston is a good solid university, nothing wrong with Aston, but it’s not it’s not one of the top UK universities. So there’s definitely some interesting variety in the educational backgrounds of the students going to Stanford. And

[00:23:16] John Byrne: then, yeah, it is if you’re a big fish in a small pond, like Afton, you’ll you could still stand out in the pool.

[00:23:26] Heidi Hillis: Absolutely. There’s a lot of really interesting background, you have look hard on blue and you have Miami University and some really smaller universities abroad. I think. Again, it’s really, if you look at that, it does give you hope because it’s really what you do afterwards and if you, obviously, if you come from one of these schools, you probably want to be in the top, 5 percent of the graduating class, you want to show that you have the GPA that can support an academic background that they feel comfortable that you’ll be able to compete academically, but, and maybe that’s what you’re Offset by the, the GMA or the scores, you don’t know, we don’t have those on here.

But, um, the path post university really becomes much more important in those cases. What you’ve done since then where you’ve, how you’ve risen from starting at a entry level position to, running a division or heading a country group or something like that.

[00:24:21] John Byrne: And as far as Cordon Bleu goes, every good business program needs a Cordon Bleu, for God’s sake, right?

You want to eat well at those NBA parties, don’t you?

[00:24:32] Heidi Hillis: Absolutely.

[00:24:35] John Byrne: Maria, I’m sure that was true at Harvard.

[00:24:38] Maria Wich-Vila: I wasn’t the one doing the cooking but I certainly, I was certainly a member of the wine and cuisine society where I happily participated in the eating and consuming a part of that.

But to, to the point that we were just recently talking about. regarding being a big fish in a small pond. Not only have I seen it personally with applicants that I’ve worked with who did not attend these elite universities, but even many years ago, I attended a, an admissions conference where Kirsten Moss, who was the former head of admissions at Stanford, she actually told stories about how they’ve accepted people who even attended community college.

But within the context of that community college, they had really moved mountains. And she said that one of the things that they look for is, Within the context and the opportunities that you’ve been given, how much impact have you had? So maybe you don’t have an opportunity to go to Yale or MIT or IIT for your undergraduate, but whatever opportunity you have been given, have you grabbed that opportunity and really made the most of it and really driven change?

So she specifically called out, I believe, I believe there were two students that year at the GSB who had both started their educations, their higher educations at community college. Anything is possible. It really is about finding the people who, wherever they go, they jump in and make an impact.

[00:25:55] Heidi Hillis: Yeah, I think that to that point, I think it can almost be a more difficult if you’ve gone to Harvard and then worked at one of these, gone on one of these paths because we know that there’s, that’s an overrepresented pool in the applicant pool to stand out among those to have had that, that pedigree sometimes can be a disadvantage, right?

If you haven’t done as much as you should have with that, or if you started at that high level to show that level of progress over the course of your career is actually a little bit more difficult. Okay. And coming from a community college and rising to, a country level manager in some places is actually puts you at a significant advantage, I would say.

[00:26:31] Maria Wich-Vila: Because it’s hard for those people, it’s hard for those people to stand out, but also I think some of them go on autopilot, right? I think some people are on this kind of achievement, elite achievement treadmill, where they’re not even really thinking about what do I want to do with my life?

They’re always reaching for whatever that next, what’s the best college to go to? It’s Harvard Princeton. Yeah. Okay. Now that I’m here, what’s the best employer to work for? It’s McKinsey, Bain, BCG and without actually perhaps stopping to think about what is my passion? What impact do I want to make in the world?

And so I feel sometimes those autopilot candidates, I feel a little bit bad for them because they’re doing everything quote unquote and yet sometimes when you speak with them, that passion just isn’t there. And I do think that may ultimately harm them in the very, very elite business school.

Admissions because business schools want people who are passionate because at the end of the day, in order to do hard things, you’re going to need passion at some point to get you through those low periods. And so I think that’s something business schools look for. And I do think that sometimes these.

These kind of autopilot candidates might sometimes be at a disadvantage.

[00:27:29] Heidi Hillis: Yeah, I think that, to that point look in the data, when you look at it, you see so many people who’ve gone to McKinsey, Bain, Weasley, or Goldman, but then there’s a, you see a lot of success for people who’ve actually pivoted.

So those pivots that are post The second or third job really do show you that, if you’re if you get a candidate who’s coming from, still at McKinsey, okay, that’s fine. They have to be the top 5 percent of McKinsey, like they have to be going to get so many McKinsey applicants that the only the, you can look at the data in a couple ways.

One is, oh, my God, they took 12 people from McKinsey and the others. Oh, my God, they only took 12 people from McKinsey, right? That’s So if you want to be one of those 12, you have to be the top 12 in the world, right? Whereas if you’ve gone to McKinsey and then done an externship at a health care startup and then moved on to be a product manager at for health at Google, that kind of a path is definitely showing a little bit more, maybe risk taking, maybe ability to follow your passions.

So I think that. When I see candidates who come to me, for example, and they’re like, not thinking about applying now, but maybe in a year or two, I say, look for an externship, maybe think about pivoting out of one of these places and looking for some operational experience.

And because you see in the data that works.

[00:28:42] Maria Wich-Vila: And they’re doing themselves a service not only in terms of enhancing their admissions chances, but even just in terms of determining, what do I want to do with my career? If I do eventually want to go into industry, what functional role do I want to have?

What industry do I want to work in? So it’s, it actually benefits them in the long term to do that as well, even if they don’t go to business school. I think those secondments and externships and second job, post consulting jobs are extremely valuable. Totally agree with you.

[00:29:06] Caroline Diarte Edwards: And I’m sure they also bring more to the classroom as well.

I would think that’s also why Stanford is selecting some of those candidates, because not only have they worked at McKinsey, but they’ve also led a non profit in Africa or worked in private equity or whatever it is. So they have much more breadth that they can bring to the classroom. And I think that It’s seen as a very valuable contribution

[00:29:29] John Byrne: in Heidi.

Did you see that? The majority of the candidates to examined actually did work in more than one place, right?

[00:29:37] Heidi Hillis: Yes, most of them did. There were very few that, you see working at one place. And I would say that those are people that would have really risen through the ranks.

Someone who’s worked at Walmart and become, started in, I don’t know, in one state, but then to become a regional manager and things like that really are going to onto a global role. The people who have stayed at one place really have shown significant career progression within that.

And then the other people I think you do see a lot of movement. The big. The most typical would be from investment banking to private equity and then you do find in finance, there’s a little bit less kind of movement into other industries. You see a lot of people staying within finance, but within finance.

Yeah. Yeah. The other industries, especially consulting or other, tech, people are really moving into other places and it’s becoming, it is a little bit difficult. We have these categories that we’ve talked about, for example, healthcare, but it’s hard to categorize some of these companies.

Are they healthcare? Are they tech? There’s a lot of overlap. And so everything’s a little bit of tech in something nowadays. So whether it’s finance and fintech or education and ed tech or health care and health tech, these are all merging and combining. It’s hard to categorize them.

[00:30:53] John Byrne: So looking at the data here I wonder if you’ve seen your old classmates in the sense that these new people are very much like the people you went to school with at Stanford. I

[00:31:05] Heidi Hillis: put this out and it’s really interesting to a lot of my classmates downloaded the report and read it. And a lot of them came back and said, oh, boy, I would never get in now.

It’s these people are super impressive. I think that you see a lot of. It’s just become more and more competitive. And I think that with more information and more people every year applying, it is becoming really difficult. I think that you do see a lot of, I am encouraged by the diversity part of it that you see still Stanford.

I feel like they do take risks on some really interesting profiles and candidates that maybe some other schools are less likely to do. And so that’s what does give me. A lot of hope when I get some kind of really nontraditional candidate who wants to, their dream school is Stanford. I feel like, I say all the time, there’s a 6 percent chance.

You’re going to get in, but there’s 100 percent chance. You won’t get in if you don’t apply. So you’ve got to, you got to give it a go. And that’s, the attitude that we take to it.

[00:32:04] John Byrne: Indeed. So for all of you out there read Heidi’s article on our site, it’s called who gets in and why exclusive research.

Into Stanford GSB and I’ll tell you one conclusion I have about this is that, man, if you really want to get into Stanford, you need a Sherpa, and and Heidi would be a great Sherpa for you because the, just the profiles of these folks, where they’ve been, what they’ve done, what they’ve accomplished in their early lives is so remarkable that To compete against, in this pool for a spot in the class you need every possible advantage you can get.

And and having an expert guide you through this trip probably would be a really big advantage. So Heidi, thank you for sharing your insights with us and the research, the very cool research.

[00:33:01] Heidi Hillis: Thank you

[00:33:03] John Byrne: and for all of you out there. Good luck. And if you want to go to Stanford, you got to check out this report.

Okay. It will inspire you to up your game, even if you are from Harvard, Stanford, Wharton, or wherever McKinsey, Bain, BCG, Goldman, Google, you want to look at this report and you want to really think about. What it will really take to get in. I think it will inspire you, motivate you to really put your best foot forward.

Thanks for listening. This is John Byrne with Poets& Quants.

Maria

New around here? I’m an HBS graduate and a proud member (and former Board Member) of AIGAC. I considered opening a high-end boutique admissions consulting firm, but I wanted to make high-quality admissions advice accessible to all, so I “scaled myself” by creating ApplicantLab. ApplicantLab provides the SAME advice as high-end consultants at a much more affordable price. Read our rave reviews on GMATClub, and check out our free trial (no credit card required) today!