In the latest episode of Business Casual, the hosts delve into the new LinkedIn MBA ranking system, an innovative approach compared to traditional rankings by Financial Times, US News, and Bloomberg BusinessWeek. They discuss LinkedIn’s unique methodology, expressing skepticism about the necessity of another MBA ranking while simultaneously acknowledging the uniqueness of LinkedIn’s data-driven approach and appreciating the ranking’s reflection of real-world outcomes. The conversation also touches on the US-centric nature of the ranking, advocating for a more global perspective.
The episode emphasizes the importance of considering personal preferences and priorities when choosing an MBA program, suggesting that looking beyond rankings is essential to finding the right fit.
[00:00:07.370] – John
Well, hello everyone. This is John Byrne with Poets and Quants. I’m here with my co hosts for Business Casual, our weekly podcast, Caroline Diarte Edwards and Maria Wich Vila. Maria, of course, is the founder of Applicant Lab and Caroline is the former managing director of admissions at INSEAD and the co founder are Fortuna Admissions. And I imagine both of them are very busy right now because we are getting down to the final weeks before those round two deadlines when most people file their applications. But we’re here with you this week, as we are just about almost every week. And I think the big news this past week is there is a new MBA ranking. Now, we know there are plenty of MBA rankings out there. Most of them are silly and flawed and even intellectually dishonest, even incompetent. This one is kind of really interesting, though, which is why we want to bring it to your attention and talk a little bit about it. You know that the economist and Forbes have walked away from their MBA rankings, so they no longer rank MBA programs. So really what’s left in terms of credibility is financial times, us news, and Bloomberg Business Week.
[00:01:21.680] – John
Sure, there are other ones. They’re not nearly as authoritative or credible. The one we’re going to talk about today is actually from LinkedIn, and here’s what’s unique about it. LinkedIn didn’t go to business schools and ask the schools to provide self reported data. They didn’t survey students or alumni. What they did is they dug into their own database, and let’s face it, every MBA worth his or her salt is going to be on LinkedIn. And they’ve looked at those MBAs by school and have figured out things like who is getting promotions in the recent cohorts? How quickly have they reached director or VP level leadership roles? How closely connected are they with each other from the same program? As well as what are the average connections alumni have with individuals in director level positions or above to show that they’re well networked? What’s the growth rate in their networking on LinkedIn’s platform? And also it measures leadership potential, attracts a percentage of alumni with post MBA entrepreneurship or C suite experience. There are five pillars. They also measure gender diversity, primarily between male and female, and I’m assuming they award more points when a school is closer to gender parity as measured by recent graduate cohorts.
[00:02:49.660] – John
They looked at the data over a number of years, not just one year, so you have a sense that it’s a little bit more reliable and tracks better. The data that they looked at was from 2018 to 2022. And there are some surprises on the actual ranking list, but it’s also pretty much what you would expect. Harvard, one. Stanford, two. Wharton is four. MIT is five. A surprise. Kellogg is six, well above Chicago at nine. Chicago typically is above Kellogg. UC Berkeley, seven. Yale, eight. Another surprise here is strong showing by Dartmouth Tuck, which in some ways doesn’t surprise me, because if you’re measuring things like network and how many graduates are connected to each mean, we’ve long reported that the best alumni MBA network in the world is at Tuck. There are a lot of reasons for this. The primary reason is if you’re holed up in Hanover, New Hampshire, for two years and you’re living on campus, and it is a residential campus, and the dorms for the MBAs are spectacular, you really get to know each other, and the school is small enough so that the intimacy of those relationships and the strength and depth of those relationships are really strong.
[00:04:09.140] – John
And then Tuck, people, they do really well. They’ve always done well in the compensation game. I’m assuming now, based on this LinkedIn data, that they’re doing very well in terms of progressing in the organizations that hire them. There are some other surprises on the list. You can see the list on our website. We called it LinkedIn’s debut MBA ranking. Shrewd concept, botched execution. We’ll get into the botched execution, but first I want to ask Caroline and Maria what they think of this thing. Caroline?
[00:04:40.880] – Caroline
Well, I’m not sure the world needs another MBA ranking, quite frankly, but I’m sure they’ve cottoned on to the fact, as you said, that other MBA rankings have disappeared. And this type of article and this type of exercise for a publisher always attracts a lot of traffic, right? So it’s great for attracting eyeballs and traffic, and that’s what they’re looking to do here. So we’re helping them with this effort. Hooray.
[00:05:08.990] – John
[00:05:10.610] – Caroline
But it is interesting, as you say, that they have this proprietary data, which is very different from other MBA rankings that we’ve looked at. It’s hopefully a reliable data source, because with other rankings, we sometimes wonder about the quality of the data that’s behind it. So one would assume that most people are fairly honest on their LinkedIn profiles and so that they are capturing real data about what people are doing post MBA. So that does make it interesting. As you note in your article, there are very small differences between the schools, especially at the top of the list. And that does, I think, make it a some what artificial exercise, because there’s so little to choose right between these top schools. So sort of putting them in an order and saying that this is number one and this is number five is somewhat, in my view, arbitrary exercise and doesn’t actually tell you very much. And with rankings, I think what is often the most interesting thing is the data behind it, because a ranking suggests that there is a one size fits all right, which is not true. As we have also discussed in the past.
[00:06:34.210] – Caroline
There is not one list that applies to everybody. It’s about finding the right fit. And the value that rankings can add is often that they provide data that you can dig into and then look at those elements that are really critical to you as a candidate. And what counts most for you may not be maybe very different from what counts for somebody else. And so being able to dig into that data is often very helpful. And as you said, unfortunately, we’re not able to do that here, so we don’t know what the underlying data could tell us. So I think that’s a bit of a missed opportunity.
[00:07:10.490] – John
Yeah, really true. So there are a number of things. Methodology is pretty vague. They don’t tell you how much of the five different aspects of this methodology counts for. There are no weights, so you don’t know how much they’re weighting. Networking versus your ability to gain promotions at the job, or gender parity. There’s also no underlying index numbers behind the numerical ranks. And I mentioned that because of the point that Caroline made, that there may be no difference between a one and five statistically. And unless you can see the underlying index numbers, you can’t really tell how close one school is to another and how relevant a numerical rank is. In general, there’s always clustering of the data behind these rankings, which suggest that a ranking of, let’s say, eight versus twelve is meaningless, because statistically, there’s no difference between schools. When you look at those numbers, which are hidden from view, Maria, you must like this ranking because your alma mater is number one.
[00:08:16.980] – Maria
Yes, that’s the only reason I ever like anything. If it validates the choices that I have made with my life, here wego, it must be flawless. No, you know what? I agree that the last thing the world needs is another ranking. But there’s a couple of things that I think are kind of refreshingly interesting about this ranking. I mean, first of all, I can’t really blame them for not delving too much into the methodology, because if they had, we would have eviscerated them no matter what they would have said. But one of the things I like about this is that because they were not collecting the data from the schools themselves, they made it probably impossible. I mean, they might not have even told the schools that they were even planning on doing this, right? So in terms of that vicious manipulation that we sometimes think about where, if it’s a self reported situation where the alumni are being pulled and they all suspiciously say that they had the number one experience or something along those lines, the methodology here might be flawed, but at least it would be therefore equally flawed across all of the programs.
[00:09:23.310] – Maria
And there wouldn’t be a situation where a school could say, okay, alumni, let’s rally the troops, and everyone’s got to submit this survey and say really great things. So I like that about it. I mean, at least it may be flawed, but I would hope that it’s equally flawed across everything. The other thing I like about these results, aside from the fact that Harvard Business School is number one, is that it provides some justification for the intuition that I have had over the years of certain programs really punching above their weight class in terms of career outcomes. Tuck, I think, is one of those schools that because of the fact that everyone who goes there bleeds green and they all so look out for each other, there is really value to that in the real world after you graduate. I like seeing UCLA being given some of the credit. I feel that their career services office, as I have said many times before, is one of those sort of criminally underrated career services offices in the MBA ecosystem. Babson. I love seeing Babson perform so well. That’s another program that I frequently will tell people to consider. And I tell people, literally, don’t look at the rankings, just look at what classes they offer. And if those classes speak to you, then I think you should go there. So there’s a lot to like about this ranking, and I think the lack of data is frustrating.
[00:10:48.520] – Maria
On the one hand, like, oh, well, there’s no average GMAT or GRE score. But on the other hand, it is interesting because one could argue that maybe GMAT, GRE scores, GPAs, those sorts of standard, quantifiable measures, maybe they don’t count for as much in the real world post graduation career path as they count when you are a student. And so I also think that that’s another. It’s kind of an interesting angle in some ways. The lack of data, one might even say it frees them from being biased by some of these measures, like the test scores that might otherwise tilt someone one direction or another. Although I do agree that there’s a lot. I mean, there’s a lot of, if someone is a VP level, at some companies you might be there for 50 years and not be a VP level, and at other companies you might be a VP your second day on the job. So there’s certainly a lot of room for criticism. And how are we going to really know if they measured things in a reasonable way if they don’t tell us how they measured them? But I certainly think it’s an interesting conversation starter and I think it’s interesting that they have so much data and they don’t have an agenda other than generating clicks. So I think it’s interesting.
[00:12:05.910] – John
Yeah, no, definitely. Right. And to your point, what it does reveal are schools that are punching above their also, you know, you mentioned UCLA and we’ve had the conversation that, wait a minute, how can USC rank higher than UCLA in US News news and in Bloomberg Business Week? Because we really doubt that result. And here we have UCLA being ranked 13th, us news is 19, Bloomberg Business week 22. Meanwhile, USC collapses down to 19, six places lower, even though its us news ranking is higher at 15, four places higher than UCLA. And its Bloomberg Business Week rank is 17, which is five places higher than UCLA. I give this ranking a lot of extra credibility because it’s confirming kind of what our experience in this business has told us about those two schools in particular. And then you see the schools like, oh, well, Mitch and Tuck, I think that’s a really good one. And Berkeley lately has been ranking out of the top ten here. It ranks solidly seven. Yale is probably more or less where it kind of should be, although Bloomberg Business Week ranks at 15th in the most recent survey. Chicago Booth doesn’t fare nearly as well.
[00:13:42.170] – John
It’s 9th here, which I find really interesting because this is a school that has used a lot of scholarship money to buy GMAT scores, and there are a few of those like that. UVA Darden ranks a bit higher here as well. And then there’s some really nice surprises on the list, including Rochester Simon, I’ve always had a good feeling about that school. They rank 24, Washington University is 25. That compares to a us news rank of 37 and Bloomberg Business Week rank of 39. And that is a really great school that often gets overlooked. UC Irvine did really well in this ranking. So did Notre Dame. And as you pointed out, Babson, especially. Babson is ranked 68th in US News news here it’s ranked 29th on the basis of its alumni success. Boston University also did extremely well. They’re number 30 and they’re 51 in both the US News and Bloomberg Business Week rankings. Johns Hopkins, which isn’t even ranked by Bloomberg Business Week or us news, turns up at 31. So you’re seeing schools here that you may not even see or are not near the top. Rutgers, here’s a good one. From New Jersey, the ranked 35th.
[00:15:04.950] – John
That’s ten places higher than their us news rank. Colorado, 36, ranked well above its us news rank of 60. So I think what I love about this ranking is, yes, it makes sense that a Harvard and Stanford and Wharton, MIT are four of the top five schools. But you can look through this list of 50 schools and find some real under the radar gems that tend not to get the love that they really deserve based on the success of their alumni basis as measured by LinkedIn. Now, another problem with this ranking that we did not mention, and I know Caroline is going to have something to say about this, is that it’s entirely us centric. Now, LinkedIn is global. They have a global database. They have data for all these schools. But I guess they want to do this down and dirty and just get it. Caroline, you know, if they included INSEAD and London Business School, I just say Paris, IESC and Barcelona, IE Cambridge, and judge, certainly these schools would have been in the game here. But they.
[00:16:13.270] – Caroline
Yes. Yeah, it’s always frustrating that often journalists in the US have such a myopic view of the world.
[00:16:21.820] – John
[00:16:22.960] – Caroline
But they do say in the article on their website that it is a ranking of US schools. So they’re not claiming that it’s anything more than that. Perhaps they will come out with a ranking of international schools separately. I think it’s kind of a shame to separate them because often candidates are comparing schools globally rather than just thinking about us completely separately from international options. But I think it would be great if they had integrated those international schools. But perhaps they will do an international ranking separately. I have to say, I think I agree with Maria that probably they didn’t reveal their methodology because they were afraid that they would get savaged by John Byrne on Poets and Quants.
[00:17:10.650] – John
Or an academic who can’t replicate the results, as is the case.
[00:17:17.610] – Caroline
The less they say, the better.
[00:17:24.250] – John
I think, you know, when you talk to a lot of deans about rankings, one of the things you come away with. Well, a couple of things. One point is they believe that outputs are more important than inputs. And they believe that because ultimately, when you go to a business school and get an MBA degree, what are you really going for? You’re really going for what the career outcomes are so to the extent that you can better measure career outcomes, and I mean well above just a starting salary and signing bonus and placement rate, but a more long term measure and a return on investment as a result of what is happening when you graduate, the deans themselves think that holds much more value. I think they’re also tired of playing the game, of using over scholarship money to get high GMATs so that they satisfy us news’s ranking, to be honest. And with standardized scores becoming less important, with more test optional programs and more programs waiving them, and more programs accepting a variety of tests, and now the change in the GMAT and GRE, and in the GMAT case, of course, is changing the entire scoring.
[00:18:38.960] – John
And the way we think about what a 700 is or isn’t, it’s making that ever more complicated. So the other thing about the inputs that a lot of deans complain about is it rewards elitism and exclusivity, and therefore diminishes inclusivity, affordability and accessibility. And certainly there are high quality programs that are affordable and accessible. I just wish that LinkedIn extended this ranking in two ways, making it global, but also including a larger number of schools, because I bet you beyond the top 50 that they name in the US alone, if they were to go 50 more, you’d see a lot more really hidden gems in here that would raise eyebrows and basically make more people apply to these other schools, which would be a really good thing. The other thing about this ranking is you can’t manipulate it. I think Maria made that point. If you’re a graduate or alumni, you get a survey. Obviously, you know the survey is meant to rank your school. So you’re going to be less discerning about your education or your opinion about the school, and less honest, to be honest. And then if you’re a school and the questions that are asked by the ranking organization are open to some level of interpretation, you’re going to respond in the way that’s most favorable to your school.
[00:20:11.270] – John
Here, there’s none of that manipulation going on because strictly, it’s LinkedIn’s database. LinkedIn has no reason to favor one school over another. And LinkedIn profiles are pretty much, I would consider airtight. Now, whether there’ll be airtight after this, that’s a whole other issue, right? Because now maybe every tiny little promotion you get might be recorded on LinkedIn. If you know that LinkedIn is going to actually count that in a ranking of your alma mater, and maybe in the past, if you didn’t have a significant promotion, you wouldn’t have included it in your LinkedIn profile. But who knows? It is worth looking at, and always with a very big grain of salt. Now, I wonder where INSEAD would be on this. I think INSEAD’s grads have a pretty good track record in the marketplace, right, Caroline?
[00:21:07.500] – Caroline
Yes, I think so. I think they would be up there with that, hopefully in that top ten. And I think that what matters to schools, well, of course, people always care about what number one or number two or number three or where you are in a ranking. But I think what should matter more is the sort of cluster of schools that you’re part of your peer schools, rather than necessarily the specific number that you’re placed at. But I think that INSEAD is a peer school with those top schools. Something that I think will be interesting to see if they repeat this again, is I suspect it might be a less volatile ranking than some of the other rankings.
[00:21:46.970] – John
[00:21:49.570] – Caroline
Because of the point you make about they’re not relying on these surveys and data coming in from different sources. It’s all one data source, and that data is probably less subject to manipulation and doesn’t necessarily change a huge amount year to year. So it will be interesting to see if that makes for a less volatile ranking, because we’ve seen in the past with some of the other rankings, some very strange movements, wacky movements, up and down, year by year, which can’t actually represent huge changes fundamentally at the schools.
[00:22:23.950] – John
Yeah, that’s a really good point. And stability is important. I mean, the more volatility in the ranking, the less valid it is. It just lacks credibility when you see schools move up and down by double digits in a single year when there’s been no real change in the program or in the graduate outcomes. And yet that happens routinely in almost all of these other rankings. Now, Maria, I forget if it was you or Caroline who made an important point earlier on in our conversation about this ranking, which was that by and know, one of the big problems with rankings is if you want to determine fit of a program for you, there are things that are going to be important to you that are not important to other people. And rather than have some mindless journalist create some fictional account of what he or she thinks is important for you, it would be much better if you were able to do it yourself. And the focus on the metrics that matter to you now, it just so happens that there is a do it yourself rankings calculator. It’s at the University of Washington’s Foster School of Business.
[00:23:35.080] – John
They launched this years ago, and I recently had a conversation with them about what users of their rankings calculator actually measure most. So, Maria, what do you think the three top things that users of this kind of database put in it to basically create their own ranking for themselves. What do you think the top three are?
[00:24:06.270] – Maria
I think if you were to ask them what their ranking would be, they would say things like culture and ethics. But if you were to actually look at their behavior online, I think they would just enter in salary as probably the first.
[00:24:18.610] – John
Bingo. Yes, you are right. Average salary is weighted more than any other metric by users of this calculator. Job placement, surprise, surprise, is ranked second. Return on investment ranked third. Then it gets a little more interesting. Networking, fourth. Low, average, debt fifth. Salary increase, 6th, which is tracked by the FT, the learning experience, finally. 7th. Selectivity, 8th. Average GMAT, 9th. Guess what the lowest one is. Academic research. In fact, the people who used a rankings calculator at the foster school put research in as like a 2.7% weight. That’s compared with average salary at 17.1 or placement at 15 or the ROI at 14%. Networking, a little over 10%. But it is kind of interesting and kind of distressing, frankly, that salary placement roi I get. But salary replacement being number one and number two by quite a bit, and these other ones like learning experience, which I would think to be really almost the most important thing, frankly, is as low as it is. But what does that tell us about the applicant pool, Maria?
[00:25:52.350] – Maria
That they’re human and that they’re doing this as much as we wish that they had these lofty, noble goals, at the end of the day, they’re doing it, know, improve their careers and make more money. And it makes a lot of sense to me that Foster would have this tool because that’s, again, another program that consistently punches above its weight class. It is located in Seattle alongside some of the most desirable post MBA employers. And so you really can get a leg up if you happen to be going to school in the same city where some of these very attractive companies are based. And so I think that they probably do better than one might think in some of those metrics. So good for them for pointing that out to people in a way that sort of lets the applicant discover it on their own and be like, wait a minute, maybe apply to foster. I think that’s very clever marketing on their part.
[00:26:51.270] – John
Yeah, because when you go in and you use the calculator, I think there are 50 plus schools in there. But obviously, whenever the results should come up for any given school or a group of schools, the Washington foster numbers come up beside it so you can compare and contrast them. So that’s, I guess, the reason for why they’re doing it, to show their school in obviously a favorable light. The numbers there are pretty good. All of this tells me that Tom Cruise playing Jerry Maguire was right. Show me the money.
[00:27:29.070] – Caroline
John. To be fair to candidates, I think it may also reflect the high cost of MBA programs.
[00:27:35.170] – John
Thank you. That’s necessary perspective and context. You’re right. You want to have a high salary because after all, you’ve got to pay down the debt that you borrow to enter a very expensive, highly selective MBA program. And that’s why we want those signing bonuses to stay high, because that really helps graduates get rid of a lot of that debt right off the top. And the debt numbers out of this are really interesting. It’s hard to get good, accurate numbers on debt, but one of the things that University of Washington did was they went to the Department of Education and they actually got the numbers on debt that are reported by the business schools. And we’re doing a story on this. It’ll come out on Monday and it’s kind of fascinating. They’re very different from what you often get based on survey calculations or even from the schools when they dare tell us news what they think the average debt is. Some cases it was really shocking. I’m not going to go into the detail here, maybe that’s a topic for another time, but particularly when we reveal all the data. But it’s really remarkable. And because this is data reported to the government, you have to assume that it’s pretty correct.
[00:28:58.840] – John
Well, there you have it, a new ranking from LinkedIn. We think it does have some merit because of what it measures and because of the proprietary data it’s leveraging out of the world’s biggest and most complete professional network. But at the same time, boy, we really wish they were transparent and honest about exactly what they did and how they did it, shared more of the data with us so that individuals could parse it and it could be used more smartly for people to make informed decisions. But hey, you can’t have everything, right? This is John Byrne with Poets and Quants. Thanks for listening to business casual. We’ll see you next week.