GMAT vs. GRE: The Rise of the GRE’s Popularity
Maria |
February 1, 2022
  • UPDATE MARCH 2023: The GMAC just announced a major change / update to the GMAT test: they are calling it the “GMAT Focus Edition”. So far, it looks like it might be, frankly, an easier / shorter / “liter” version of the GMAT.
    • Notice how, in this podcast which was recorded in February of 2022, my co-host Caroline and I proposed a variation of this very idea to GMAC, ha ha (note to GMAC: please feel free to send us hefty consulting fees for this idea, hahahahaha  🙂

With an ever-increasing number of MBA applicants applying to business schools, the process is becoming increasingly competitive. The GMAT has long been “the standard” for MBA admissions and was for a long time, the ONLY option for MBA applicants. But the GRE is gaining market attention and more and more students are opting to take the GRE over the GMAT.

In this episode of Poets & Quants, John, Caroline, and Maria will help you figure out which testing option is best for you while you pursue your dream of attending business school.

Discussion points include:

  • Why the GMAT is something that we all love to hate
  • Why a GMAT official is accusing ETS, the creator of the rival GRE test, of intentionally misleading people with this comparison tool that has been available on their website for years
  • The differences between the GMAT and the GRE, and how to decide which one to take 
  • Why INSEAD discontinued accepting GRE scores 
  • SHOULD applicants worry about which exam to take, the GMAT or the GRE?
  • The reasons for the decline in GMAT test takers in 2021
  • Whether or not GMAT’s long-held monopoly in MBA admissions can be reclaimed and what they might want to do instead.  

Episode Transcript

[00:00:07.510] – John

Well, hello, everyone. Welcome back. It’s Business Casual, our weekly podcast. This is John Byrne with Poets and Quants, and with my co host, Maria Wich Vila and Caroline Diarte Edwards. Carolina is of course is the former admissions head at INSEAD and a co founder of Fortuna Admissions. And Maria is the founder of Applicant Lab. Now, we’ve missed you for the past few weeks, and I want to explain why. I took a little vacation to Italy to celebrate the new Year. And it turned out that I ended up testing positive for COVID and so did all of my three travel mates. So I ended up in Quarantine in Italy for an additional 15 days. Now, it wasn’t hard duty. It was quite pleasant, and my symptoms were mild, but it meant that I was in a seaside village right next to the Adrianic Sea. It was beautiful, but I was pretty much isolated and couldn’t do a whole lot. But now I’m back, and so is Maria from a snowstorm in Tahoe. Caroline narrowly escaped a snowstorm in Tahoe. And we’re all here back to think about business education and what’s going on and to help you navigate this journey to business school.

[00:01:26.550] – John

The big news really, this past week involves the GMAT, and we know this is the test we all love to hate because it’s one of the major hurdles of getting into a really good MBA program. Some people have the opportunity and luxury of studying for months on end, which gives them tremendous advantage over people who don’t have all that time. Some people can avail themselves of highly expensive tutors and classes and prepare for the test. Others can’t. There are issues about the fairness of it and the use of it by business schools. But what’s going on right now is fascinating. An official at GMAT, which is the organization that administers the GMAT test, is accusing ETS, the maker of the rival GRE test, of deliberately misleading people with this comparison tool that they have had on their website for many years now. Many people in the business admission officials, admission consultants, applicants themselves rely on this comparison tool to plug in their verbal and quant scores on the GRE to basically get a predictive GMAT score, to give you a sense of your odds of whether you can get into a program or not. And this GMAT official is saying that the test that comparison tool is bunk.

[00:02:54.990] – John

He says it can be off by as many as 200 GMAT points. That is nonsense, that it’s a disservice to both applicants and business schools. And yet for years we’ve all relied on it. I wonder, Caroline, what do you think of this?

[00:03:11.790] – Caroline

Well, it is a different test, right? So I understand that you can’t necessarily say there’s an exact equivalent. I have always paid more attention to the percentiles rather than those conversion charts. So if I’m evaluating a GRE score, I always look at where they stand in the GRE percentiles. Having said that, I mean, it’s very strongly worded. Right. Their statement. And given their situation with the downturn application or the a downturn in GMAT testing volume, it does smack of desperation because ETS is eating their lunch.

[00:03:50.350] – Maria

Right.

[00:03:50.960] – Caroline

And this goes back years.

[00:03:53.690] – Maria

From what I remember.

[00:03:54.610] – Caroline

ETS had the contract for administering the GMAT. Right. And then GMAT took it away from ETS and gave it to Pearson View. And therefore to get back into the market, ETS started pushing the GRE as an alternative to GMAT. So that’s how all this sort of started back a few years ago. And GRE has been successful in winning significant market share in this market. And I think that’s perfectly legitimate. Right. I welcome that. I welcome that schools are open to candidates taking different tests. I think it broadens the pool. It increases the diversity and the applicant pool. But there may be some legitimacy in their claim that you can’t say that the tests are exactly equal. Right. I mean, GMAT did design a GMAT as a test for business schools. Right. That’s how it was designed. The GRE is not designed for business schools specifically. It has a much broader application. And therefore, yes, it’s correct to say that they are not exactly equivalent.

[00:05:07.620] – John

Yes, Maria, I’m sure you’ve used that comparison tool with your candidates over the years.

[00:05:12.700] – Maria

Yeah. And it’s funny, it’s really a shame that this critique is coming from someone from GMAT themselves because then it sort of reeks of sour grapes. And I actually think that the critique is a legitimate one. So I wish it would have come from perhaps a less invested party. But I always tell people to look at the whatever, because now more and more schools are actually reporting their GRE scores, and many of them are thankfully breaking it out by the quantitative and the verbal. And so I tell people, just look at what those numbers are and how you compare against them. Because I’ve actually in the past, I’ve sort of given myself a migraine trying to figure out like, okay, I work backwards using that tool. And I’m like, well, wait a minute, this is telling me that it’s a 710. I’ll give you an example. Let me just use a concrete example. So I was looking at a top school and they said, okay, our average verbal score for people who get in is 165, and our average quant score is 164. So when you publish those or you put those into the GRE score converter, it says, oh, that’s the equivalent of a 710.

[00:06:19.180] – Maria

But that schools average GMAT is over 730. And so it’s like, well, first of all, wait a minute. Just based on that alone, it sounds like it’s kind of easier to get in using the GRE. But then I take it one step further. And the Ets’own tool not only said, well, look, this is the equivalent of a 710, but your verbal score like a 165 on the Verbal and GRE is equivalent to a 41 on the GMAT, and the 164 in quant is equivalent to a 45 in the GMAT. But when I reverse engineer that and I plug that verbal score and that quantum score into a GMAT chart, I come back with a 690. So basically, to sort of summarize it like even the ETS’s own tool, they say this is the same as a 710, and this is what it would have been verbal, and this is what it would have been quant. But then when I plug those same verbal and quantum scores back into another chart, it comes out as a lower GMAT score. So I get the sense that it sort of over inflates. Now, the one thing I will say that I think the reason I don’t immediately just think like, oh, ETS is evil.

[00:07:27.950] – Maria

This is some sort of scam is that the quantitative percentiles for the GRE are lower than they are for the GMAT. By that I mean it’s because so many people take the GRE, right? Even people applying to philosophy programs and English literature programs and creative writing programs or whatever, it makes sense that the pool would be less quantitatively driven or less quantitatively. You have less of a background as a result. And so it makes sense that someone who would get the 50th percentile on the GMAT might be in, like the 80th percentile on the GRE, not because they’re smarter and dumber on one test versus another, but just because there are many more poets in the GRE pool dragging that number down. And so I think that there are some definitely some shenanigans. I’ve always questioned how that will work. I don’t think that it should be taken into consideration honestly. And that’s why I tell people, just look at whatever those published averages are for the admitted students and compare your scores against that, because otherwise it’s totally wacky, and I can’t make the numbers tie together, and so I don’t trust it well.

[00:08:50.590] – John

It’S a good point because I think it’s led to the belief that schools are willing to accept lower standardized test scores on a GRE than they are on the GMAT. And that’s because every time a school reports both results and you input these numbers in the comparison tool, the predictive GMAT score is always lower than the actual GMAT score for the class average for the incoming class. This is true at Harvard. As you point out, Harvard’s median GMAT score is 730, but the median verbal score for the GRE is 163 and the quad score is 164. You put it into the tool and it comes out with a 700 score, which is 30 points below the GMAT median for the latest Harvard Business School entering class. And this has been historically true across all the schools, which has led to this belief that, hey, if you can’t do well on the GMAT, you should take the GRE because schools seem more willing to accept lower numbers. And some of that belief occurred because in the beginning, US News did not measure GRE scores. They only measured GMAT scores. So it also led to this thinking, that, okay, admissions officials aren’t going to be as hard on you with the GRE because US News isn’t going to factored into the ranking and it’s not going to hurt their school’s rank.

[00:10:17.810] – John

I don’t know. I mean, all this could be nothing more than crazy speculation, but it has more or less proven out over the years. And now the fact that there is this disconnect on the tool and GMAT is making a big deal of it gives you some pause and makes you think twice about this whole thing. Caroline, when you were at INSEAD, I know that you were only accepting Gmail scores back then. Is that right?

[00:10:42.620] – Caroline

Well, when I was there, we started to accept the GRE with the advice to candidates that they should target the 80% or above on both parts of the test, whereas for the GMAT the advice was 75th percent or above. So I do think that it is easier to do well on the GRE, and that’s where the school is asking for candidates to target a higher percentile. And then at one point after I left, the school stopped accepting the GRE after having had some bad experiences with candidates coming in with the GRE and floundering academically, and now they have started taking it again. But candidates with the GRE, they’re welcome candidates with the GRE, but they will really do a lot of due diligence on the academic ability and other dimensions. Candidates presenting with the GRE because of that experience with the handful of candidates where they had apparently done well on the GRE, but their academic abilities were not up to par when it came to performing on the program.

[00:11:52.870] – John

Yeah. And to your other point, regarding percentiles, I know that Bruce Del Monaco, the admissions head at Yale School of Management and Yale accepts a large number of GRE candidates. It’s like 28 to one third of their incoming class on a regular basis. He looks for that higher percentile on the quant. Exactly. Because of the two things that both Maria and you have mentioned earlier and evaluating. So rather than just look at a blank score doing the conversion, he’s wanting to see an extra few points higher on the percentile on the quant side, when they take someone with a GRE there, what does this all mean for an applicant? Okay, let’s say I take my GRE. Do I forget about this comparison tool because GMAT is questioning its credibility? And do I just look at how my scores compare with what the school is reporting? What should an applicant do about this?

[00:12:58.010] – Caroline

Well, I think it’s important to refer to the percentiles and it’s important to refer to the school averages or the school policies. I mean, the schools have a lot of experience with evaluating these tests themselves, and they know themselves how it correlates with how candidates do academically on the program. So I’m sure they will read with interest what GMAT is saying about this, but I don’t think it’s going to change their attitude to either test. They have their own experience.

[00:13:30.620] 

Right.

[00:13:31.230] – Caroline

And they are accepting candidates with a GRE vast majority, which are doing very well on the program. Great candidates. So I don’t see that changing. So I don’t think candidates should fear that taking the GRE is somehow for the second best. And the schools are going to change their policy because of GMAT making a big fuss about this. The schools understand how these tests work, and they have a tremendous amount of experience in evaluating the candidates with the test and understanding the threshold that they need to see. And it’s not just about these tests. Right. I mean, they’re looking at a lot of other data points to evaluate academic potential.

[00:14:14.880] – John

Exactly. Maria, your take on how applicants you deal with this, just ignore it all.

[00:14:20.230] – Caroline

Yeah.

[00:14:21.230] – Maria

I don’t think it’s one of those things where it’s like when people try to read the tea leaves of like my interview invite came out at 11 13 and yours came out at 11 15. What does it all mean? Just don’t worry about it. I don’t think it’s going to make a difference. Like Caroline said, I think at this point the GRE, maybe 15 years ago, when the GRE was relatively new in the MBA process, it would have made more of a splash or more of an impact. But like Caroline said, we now have several years worth of significant portions in some cases of the class entering with a GRE at a certain level, presumably performing up to par in the classroom. I wouldn’t necessarily use the conversion tool. I do think that the conversion tool. In some cases it underestimates, and in some cases it overestimates. And so I wouldn’t go by that and be like, oh, look, it says that I have a 710 equivalent. So therefore, that means X, I would just look at the individual percentiles and look at what the schools themselves report.

[00:15:20.210] – John

Yeah, exactly. Now, also, to your point, this attack is occurring at a time when GMAT test volume is at record lows. In fact, for the testing year of 2021, which ended in July of last year in the US, test taking fell to a new low of 38,509. Think about that. Only 38,509 tests were taken in the US on the GMAT. And remember that’s test taken. That’s not test takers, because if you actually threw in or a divider on the number of people who take a test multiple times, you’d find far fewer candidates than 38,509, which is pretty darn shocking. To put that number in perspective, in the pre pandemics testing year 2018, there were 73,556 exams taken in the US. So this is like a 48% decline since 2018, three years, which is pretty darn dramatic. And it gets even worse because if you look at the peak year of GMAT test taking, which is way back in 2012, the drop is even bigger. It’s pretty much a collapse, frankly. Back then there were like 117,500 tests taken in the US, 117 five versus 38 five in nine years. What’s going on here? What do you make of this, Maria?

[00:16:53.660] – Maria

I mean, God bless ETS for convincing the MBA admissions officers that the GRE is a legitimate equivalence for the GMAT. I mean, I think that would if I had to say off the top of my head, it would almost entirely be because the GRE is now gladly accepted. And I think the GRE is overall, for the most part, an easier test, or at least it’s certainly easier to score. Let’s say, like I said before, to score in the 80th percentile in quant on the GRE is much easier than to score the 80th percent and quant on the GMAT because of the applicant pool. So I think people are seeing it as kind of a backdoor, so to speak, a way to maybe do a little less work or in prepping or I’m just not a very good test taker. It’s a shame because I do think that the GMAT is by far a much more rigorous test. So if I were in admissions and everything was up to me, I would probably respect it more. But that’s not what’s happening.

[00:18:01.470] – John

Yeah, exactly. There are a few other things going on here, too, Caroline. Right.

[00:18:06.990] – Caroline

Well, yes, it may be that there’s a drop in test takers overall over that period. I do think that the market is weakening a bit right now, and I think that this year we won’t see the same volume of applications to business schools perhaps that we saw last year from the US, given the strength of the job market and how quickly that’s rebounded. So that might be a factor. And, of course, the Pandemic tests were less accessible. So people were concerned about taking the at home test, and there were some glitches with the at home test, particularly with the GMAT version of the at home test. The GRE seem to get that right more quickly than GMAT. So that may have driven a bigger shift towards the GRE because of those circumstances. I think some of it is no doubt pandemic related.

[00:19:03.910] – John

Yeah. And a number of schools have adopted test optional policies. Many more schools are more generously granting waivers of standardized tests. Part of this occurred at the start of the Pandemic as a way to be more compassionate to applicants. But what many admission officials say who have done this is that it didn’t affect the quality of the applicant pool at all. And they believe that there are enough other aspects of an MBA application to judge whether or not a person can do the quant work in the core curriculum. And let’s face it, GPA over four years, particularly one with the transcript of some quant courses in it should give one greater sense of confidence that someone can do the quant work than a three and a half or three hour and 15 minutes test that can be studied for and along with the interview, along with the progress and track record at work, along with what other filters a person had to go through to get into a quality undergraduate institution or to work for a high end employer with heavy duty screen processes. All of those ingredients that go into the holistic assessment of candidates in business schools should give admission officials more information than they actually need, making a standardized test less relevant to them, I would think.

[00:20:37.810] – John

Now, there’s the other argument where you’re looking at a worldwide pool of applicants, and maybe the GMAT or the GRE is something of a leveler because everyone has to take the test. But even that is not true because obviously the tests are in English, and for people who have English as a second language, that’s a disadvantage. Now, I spoke with the President CEO of GMAT this morning, and he basically attributes the decline to this fact, the fact that schools and universities are experimenting with the test optional policies. He also thinks there’s been a natural pandemic induced reduction in test taking. But he’s also seeing a shift to the executive assessment. When GMAT came out with the EA, it was largely for executive MBA programs, and it’s a much shorter, easier test. But more and more full time MBA programs are accepting the EA in lieu of the GMAT or the GRE. And his executive assessment test has had a fifth consecutive year of growth. So he’s seeing that the other thing he’s seen is that worldwide it’s a little bit different picture. It’s not as bad as just the US numbers. Let me tell you, it’s not good because testing volume in China has declined substantially, because in 2020 the government didn’t allow for any form of online testing.

[00:22:13.410] – John

And while it’s recovered a little bit this last year, in 2021, as test centers began to open, it’s still well below historical levels in China. The other issue, of course, is the tensions between the United States and China, which is making a lot of Chinese not want to come to the United States because there are also things like the zero covet policy in China and travel restrictions that make it difficult for Chinese to come to the US. India test lines also have been down. Europe is looking better, according to him, but overall these numbers are not very good and they’re kind of scary. I mean, it does represent something of a collapse in GMAT testing volume. One thing I’ll point out is because the GMAT has long been and still is the dominant test for business school admissions. Oftentimes, testing volume on the GMAT was correlated with application volume. And for the first time ever, that seems not to be the case. And it’s not the case for all the reasons that we’ve sided here, including the rise of the GRE, taking more market share, including test optional policies, and including difficulty in taking the test if you wanted it during certain parts of the time when test centers were closed and before the home test became viable.

[00:23:46.410] – John

So I think there’s now this disconnect where you can look at testing volume and not necessarily see it as an indicator of where application volume is going. Caroline, what do you think about that? Do you think that’s a permanent situation or temporary?

[00:24:02.310] – Caroline

Yeah. Time will tell.

[00:24:04.850] 

Right.

[00:24:05.110] – Caroline

Because there is a lag between customer volume and what happens on the schools. So I think we’ll have to wait and see. But it’s a very interesting point that you made about the executive assessment, I think, and how that could continue to grow.

[00:24:23.750] 

Right.

[00:24:24.010] – Caroline

Because in many ways, it’s a much easier and less intimidating test. It’s a shorter test, there’s less preparation required. So I do wonder if that will continue to be a trend that we’ll see with more and more full time programs embracing the EA.

[00:24:41.030] – John

Yeah. Including Columbia Business School and NYU Stern. We’re among.

[00:24:47.850] – Caroline

Is it really necessary to do three and a half hour test to demonstrate your academic ability, given all the other data points that schools have about you by the time that you apply to business school? Right. Perhaps a shorter form test could be just as efficient at capturing some important data for the schools, and that could be a good thing. Right. Because in some ways it lowers the hurdle for people to apply to business school, and that’s a good thing in some ways.

[00:25:23.160] 

Right.

[00:25:23.410] – Caroline

Then it can broaden the pool. It makes it more accessible to more people. The GMAT is a very intimidating process. Having gone through it myself, it’s not a fun thing to do. Right. So if there is a route that one can take where it’s a shorter test and that enables schools to bring in more candidates, then that could also be a positive evolution. So perhaps that’s something that GMAT should push. Right. Maybe the GMAT is never going to go back to having the volumes that they’ve had in the past because the market has fundamentally changed, and it’s not going to go back to the cozy monopoly that they enjoyed for so many years, where it was just such a wonderful cash cow for them. So perhaps they do need to reinvent themselves and come up with other products, and the EA seems to be something that they could develop further.

[00:26:24.510] – John

Yeah, that’s true. And as you know, there are a number of European schools that have their own tests that they’ve developed in lieu of taking a GMAT or GRE that they’re willing to allow an applicant to take. And it gives them some assurance that the quant work can be done without difficulty in the core, and you probably will see more of that going on as well. Yeah, I think Maria last words.

[00:26:50.370] – Maria

I think that if I were at GMAC, I would rebrand the executive assessment to make it clear that it’s not just for executive MBAs. And I would push that as the GRE Slayer, because I think since it would be less intimidating, I think a lot more people would flock to it. And also, I couldn’t help but notice that they actually charge more to take the EA than they do the GMAT. I think it’s $350 if I’m looking at the right chart, versus $275. Another thing that I noticed, too, is that the GRE is actually a little bit cheaper to take than the GMAT as well, which could also be I don’t think that’s the main thing driving it, but it doesn’t hurt. So if I were GMAT, I would say put the pedal to the metal on the executive assessment, rebrand it, though, so that it sounds like it’s more globally or it’s more applicable to MBA programs or MIM programs or whatever, and then go full speed ahead on that and then just educate the schools on it really is viable. (laughing)”We’ve been telling you for years it was really overkill.”

[00:27:52.960] – John

Maria, I think that’s great advice.

[00:27:57.670] – Maria

It’s almost like I’m good at business (laughing) . Yeah. Otherwise, I think they’re stuck.

[00:28:08.450] – John

A few years ago, when I looked at the numbers, I found out that the actual profit margin GMAT is a so called nonprofit organization, but the actual profit margin on a GMAT test was higher than the profit margin on an Apple iPhone. Now, I doubt that that’s true today, given the dramatic decline in volume. But if they follow your strategy and start rebranding the executive assessment and use it as a Slayer against the GRE, they might very well do better than even before their profit margins that were already better than Apple’s iPhone margins.

[00:28:49.850] – Maria

Dear GMAT, Please send consulting fee to Maria. I’ll give you my address in a private message. I charge very reasonable consulting rate.

[00:29:02.150] – John

What would you call it? Instead of the executive assessment to make sure the express assessment.

[00:29:07.630] – Maria

I had to take it right off the top of my head without thinking about it or something like that, right?

[00:29:14.600] – John

Yeah. Well expressed.

[00:29:16.370] – Maria

At least that was still the EA.

[00:29:21.110] – John

You get it over, you don’t have to study for it as much, and it will give you enough information to help make an admissions decision. I like this.

[00:29:29.300] – Caroline

It’s the antigen test versus PCR.

[00:29:32.570] – John

Exactly right. Yes, it may be less reliable, but you just don’t count on it to some degree, less. All right, everybody, there you have it all about the GMAT this time, whether or not you can trust the conversion tool, whether it even matters, and why GMAT compliance at historic lows. Well, thanks for joining us. This is John Byrne with Poets and Quants. You’ve been listening to Business Casual our weekly podcast.

The Economist Dis on MBAs: Is the Degree Still Worth It?
GMAT vs. GRE: The Rise of the GRE’s Popularity
Maria |
February 1, 2022

[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!