The Financial Times MBA Ranking is one of the best that we have on the market. But, with its recent list not favoring the most highly ranked and selective business schools, the ranking seems to be shuffled and unexpected.
On this week’s episode of Business Casual hosted by Poets&Quants, Maria (ApplicantLab Founder), John (Poets & Quants) and Caroline (Fortuna Admissions) discuss the metrics FT uses in ranking MBA programs, what that means for different programs, and weigh in with their opinions on the ultimate result.
Key points of discussion include:
- What makes last year’s Financial Times MBA ranking ‘weird’
- Why M7 schools suffered a decline in the FT rankings
- Should there be no MBA rankings? (their opinion might surprise you!)
- Why considering the increase of weighted salary of alumni 3 years after they finish their MBA as one of the metrics in the FT MBA Ranking no different than pulling a rabbit out of the hat
- Why ‘research’ as part of FT’s metrics is ‘silly’
Listen below to get the all the details!
[00:00:07.390] – John
Hello, everyone. This is John Byrne with Poets and Quants. We’re here again with Business Casual, our weekly podcast with my co host Maria Wich Villa and Caroline Diarte Edwards. Caroline, as you all know all know, is the former head of admissions at INSEAD and the co founder of Fortuna Admissions, the MBA admissions consulting firm that we all know. And Maria is the founder of Applicant Lab. So if you want a kind of do it yourself guided tour to help you along on your journey to business school, that is the place to go. We have a fascinating and provocative issue to discuss today. Adam Grant, the superstar Wharton Professor who I would say arguably is the most famous, perhaps the most influential business school professor of his generation. He’s written best selling books. His classes are all over subscribe. He has podcast that is very popular, and he has social media that has tremendous amounts of followers. Well, I was listening to his podcast recently of an interview that he did with Andrew Nuri, the recently retired former chairman and CEO of PepsiCo. And during that conversation, he kind of put out their bomb. He said that basically in all his years at Wharton, he’s been trying to convince Wharton to drop its two year MBA program.
[00:01:38.100] – John
That’s right. Eliminate the two year program and in its place put a one year program and a three year program now being naturally provocative. I put a headline on my commentary, and the headline was Adam Grant’s Dumbest idea ever. Maria, do you agree?
[00:01:56.760] – Maria
I agree that your headline was an excellent one for grabbing attention. I don’t agree that it’s a dumb idea. I actually think there is a lot of merit to at least rethinking what is the MBA and changing it and tailoring it based upon someone’s goals for the degree. I don’t necessarily know that it’s either one year or it’s three years. I think there’s room for a two year in there as well. But I think he makes some really good points. So my understanding, I think one of the biggest reasons he is advocating this is that a lot of people you start the internship recruitment process a couple of months, if even that right. If you want to go into consulting or banking, they advise you to start preparing for those interviews in August before you even get to campus. And so you start preparing for these interviews and you take the internship and you do the internship. And if you hate the job now, you’re stuck because you go into your second year having to now figure out what you want to do after graduation. You don’t have the experience that an employer would know.
[00:03:04.960] – Maria
You don’t even know what it is you want to do, perhaps. And so I think that is a very valid point. I also think it’s in part because business schools spend so much effort trying to convince candidates that you can make a career change here’s a featured post on our blog about this person who made this career. But the truth is that making very dramatic career changes is very difficult. And so if somebody really does want to go from, say, being a software engineer to work in private equity, they’re going to need more than one internship to do that. So I agree with the idea that I think business schools should try to come up with more than one internship. I think a lot of people have informally started doing this, though. I think many students have informally on their own started crafting their summers to have two internships. And regarding his point about people not knowing what they want to do, I think the solution to that would be to have a really in depth I don’t think you need a whole extra year from business school to do that. But I do think that there is merit to having, prior to enrollment, an intensive six week, four week deep dive into psychological testing, taking the Career Leader online tool, which I am a huge fan of.
[00:04:22.560] – Maria
Maybe you spend a week in an investment bank and you spend a week at a consulting, make a list of maybe four things you think you might want to do and try to narrow it down. I think a lot of his criticisms are completely merited. I don’t necessarily think that the only way to address them thoughtfully requires an extra year of school.
[00:04:44.690] – John
Yeah, I guess my argument here is an MBA is a costly investment in money and time, and if you want to increase the cost of the program by 50%, far more numbers of people are going to be coming out with debt. Many already come out with debt, and often it’s six figure debt. You’re making the three year MBA, at least if there was no two year option, a less accessible degree. And if the problem is the fact that recruiters count on students so early, why don’t we solve that problem? Why don’t schools just stand up and say, hey, you can’t come here for the whole first semester? Sorry, you just can’t do it. And with Zoom and everything else today, you don’t have to come. You might be able to have an open cocktail hour on Zoom, and you may not be able to press the flesh and get to know the students as well as you’d like, but they need to be focused on their studies and figuring out what their true intellectual and professional interests are before you get your hands on. So his main point, as you pointed out, was career switchers.
[00:06:05.900] – John
Say they wish they could have an extra year to explore their intellectual professional interests and have that second internship. But you’re right. Many companies today actually have Premba internships. There’s a lot of experience and learning in these programs that, while not effectively an internship, give people the kind of work experience to talk about in their interviews. And then there is traditional summer internship, which, Maria, as you point out, some people are actually carving up and doing two instead of one. Now, Caroline, what do you think?
[00:06:39.790] – Caroline
Yeah, I agree that you do see different people have different needs.
[00:06:44.540] – Caroline
And definitely I see more and more candidates tailoring their experience, for example, by doing Premier internships. I’ve seen a lot of successful candidates getting into the top schools who have done, for example, two years at McKinsey, and then they’ve done something else for a year. Right. They’ve tried something else before they go to business school. And I think that makes them more appealing to the top schools because they’ve got that greater breadth and depth of experience and just make some more interesting candidates for the classroom. So I think that it’s very difficult to have a one size fits all approach.
[00:07:24.030] – Caroline
When you’ve got such a global candidate pool, people coming in actually at different ages. So someone who’s coming in at a very early stage in their career, two years, maybe a little bit short. Right. Whereas someone who is in the late 20s or around 30, the idea of taking two years out of their career is already prohibitive. So people have different options already. And I think what he says is very flattering to schools like in theater who do have the one year program. I think that some US schools are a bit stuck with a two year program. The model is designed around that. It would be very difficult for them to change. As you said, some other schools in North America have shifted towards one year options, but it’s pretty limited in the US, and it led the way with a one year program in Europe, and a lot of the European schools followed suit. And that has proven a very powerful model. And I think it’s difficult for the top US schools that have quite a heavy machine designed around those two years to change that.
[00:08:34.710] – John
And, of course, the big appeal of the one year MBA, Incidentally, is much lower cost and shorter in duration, so you can get on with your career more quickly. A two year Warton MBA now cost about $231,000 in tuition, fees and room and board. If you added the third year would come to about $350,000 for an MBA. I will also say that Wharton is not among the most generous schools in granting scholarships. So those numbers are very scary to begin with. Now, a Wharton one year MBA, that would probably be a good idea, frankly, particularly for people who already have an undergraduate business degree. That’s how Kellogg justifies its twelve month accelerated MBA. And Kellogg has had that one for more than 50 years on the market. They started in 65, not long after INSEAD launched the first one, because the other part of this proposal is really interesting, killing the two year MBA. The tried and true two year MBA. The first MBA ever delivered in the marketplace is by Harvard. And right from the beginning it was two years. And the structure of that two year experience makes a lot of sense. In the first year, you focus on the business basics, the foundations and marketing strategy, finance, accounting.
[00:09:58.200] – John
And then in the second year, you bring all of those disciplines together in a more integrated fashion, as well as doing a deep dive in at that point, an area of interest that probably you should be ready to tackle, whether it’s operations, finance, whatever. And that model has been tried and true. It works very well. I don’t see why anyone would want to kill a two year program now. Maria, you went to Harvard for two years. Can you imagine being there for three?
[00:10:31.890] – Maria
I mean, I loved Harvard. I would have loved for three years. I think most people who go to business school would love to have more time there.
[00:10:40.070] – John
And I totally agree with that. That is almost universal. And it speaks to the incredible experience a good MBA program is.
[00:10:47.040] – Maria
Yeah. I mean, look, I don’t think the two year MBA should be killed. I think he’s sort of maybe overstepping, maybe he’s trying to grab headlines with that kind of dramatic statement. But again, I agree with a lot of the points he’s making. Right. I think if you really are interested in a breadth of business topics, I think the two year program is great for most people, but I don’t think it is necessary. And I also think it is not ideal for other people. Now, just to quickly address the additional cost, maybe what you do is it could be a three year program, but that doesn’t mean it’s three full academic years of learning. It could be you alternate every other semester during those final two years with an internship coursework. Internship coursework. So if you’re doing it that way and that’s not what he said. But I’m just using I’m like, here’s what I would do. I wouldn’t ask, but here’s what I think I would maybe alternate like internship semester. Internship semester. And so that way you could probably get three little internships by the time you graduate. And by the way, you’d be making more money.
[00:11:53.870] – Maria
I don’t think that a lot of people would pursue this three year option if, say, they wanted to go into nonprofit management. Right. That would be something where, first of all, you already know that’s what you want to do in your heart. And so it’s unlikely that you’re going to change your goals. And also you might try to I would hope that this hypothetical school that would do this would be really upfront with people and sit down with them and say, like, look, honestly, if you’re going to be in the lower rung of compensation, just think about whether or not you want to do this third year. But yeah, I would have luck. I’d still be in business school.
[00:12:30.230] – John
It’s true. I’ve rarely met an MBA who said, wow, I’m glad this thing is over. Almost everyone has such an incredible experience that they wish they could hang on for a little bit more. But of course, they’re not thinking of the money and everything, all the other consequences of that. I think, Caroline, when you finished your program because you were at NCI for ten months, did you feel like you would like to hang around for another year?
[00:12:58.450] – Caroline
Yeah, it definitely goes faster than you think. I think whether it’s one year or two year, I mean, I did one year because I started January. I finished in December and I did internship in the summer. So if you start in January, it’s a twelve month program. I didn’t see it, but it does go very fast. I can remember January 2004, I kind of felt like I jumped off a speeding train and was kind of shellshocked a little while it was all over because you’ve really missed that incredible group of people and that intense experience. And going back to normal life is a bit disappointing, quite frankly, even though, having said that, my first week of work was a training program at a beach hotel in Bali because I had joined the World Bank Group in Indonesia. So it wasn’t too rough. But I have to say I was really missing in the experience.
[00:13:50.030] – John
Yeah. And coincidentally, here we also published this past week our competent ranking of the best international programs. INSEAD, for the 6th time in a row, was number one. But what’s interesting about the list is the program length of the top ten programs along with the cost. And NCI is now about $104,000 for its program, comparatively, because of the two year span of the NBA in the US, top 25 MBA in the US is just under $200,000 in cost. Tuition on the least expensive end. Among the top ten is Warwick Business School twelve month program, $52,000. Oxford is at 75. Cambridge is at 70. London Business School is the highest price because they have a program that’s 15 to 21 months, and that’s a little over $111,000 IMD is at IESE in Barcelona, is about 107, considerably cheaper than US programs and great brands. So my question is for people who are not constrained by geography and could take their MBA anywhere, what is the case for a European MBA? Caroline, let’s start with you.
[00:15:29.490] – Maria
Well, first of all.
[00:15:30.280] – Caroline
I would say if you don’t see it, it’s not a European school. Right, because it’s a truly an international school. The Singapore campus is completely equal with the Font and Blow campus. In fact, some people study it never go to Europe. Right, because you can do the entire program in Singapore. It’s also the Abu Dhabi campus with the EMBA and some of the MBA’s go there as well. So it is truly a global program. Having said that, if you go to London Business school or a lot of the other European based schools, you will also have a very international cohort, a really global cohort. And so I think it just adds additional dimension to your learning, which you can’t get in a classroom of people who have all come from quite a similar country and culture. And it’s a very challenging environment to teach in. I’ve talked to professors who’ve taught both at INSEAD and at some of the top US schools. And INSEAD has the exchange with Water. And professors teach at both schools sometimes. And they talk about how the INSEAD classroom is particularly tough for the faculty because you have people with such radically different perspectives on things.
[00:16:44.660] – Caroline
And it’s definitely an environment where there’s just a lot of different dynamics going on, and that makes it a remarkably rich learning environment as a student. So for anyone who’s looking to work across borders and really get a global springboard for your future career, I think it’s a great option to have and something people should seriously consider. Having said that, if you’re from the US and you’re thinking about basing yourself in the US for the rest of your career, I think you should go to top US school if you can, because your network is going to be mostly based in the US. If you go to a top US score, it’s important to think about where your network is going to be in the future. So the inside network is incredibly powerful if you’re moving around the world. My husband went to Stanford, I went to INSEAD. We’ve moved around to different countries. And honestly, he’s tapped in more to my network outside of the US than he’s tapped into Stanford network because Stanford is an incredible school, but it’s a very small program, and most people stay in the US, stay in the Bay Area.
[00:18:00.200] – Caroline
Right. So if you’re moving around internationally, schools like that don’t have the most powerful network. But if you want to stay in the US and this is your focus, I think the best option is going to a top US school. So it’s very important, I think, to consider where your network is based and where will be what geography is most relevant for you in the future.
[00:18:27.070] – John
Maria, you agree?
[00:18:29.290] – Maria
Yeah, absolutely. I will say that in favor of doing an international program. I think the world is only getting smaller. I realize that COVID has made international travel less common, but we are still increasingly working in general, anyone in business is increasingly working with people all over the world. And so I definitely think that there is something to be said. It’s one thing to read an article about, like, oh, I remember before I moved to Hong Kong, I was trying to find these articles. I’m like how to Do Business with People in China. Those articles taught me a few useful things, like, oh, you hold out your business card with two hands but there’s really no replacement for actually experiencing it and so I think that given the increasing globalization of pretty much every industry there is a lot of merit to getting that international experience and even the most global US school is not global by any measure against many of these schools.
[00:19:26.990] – John
I mean, at HEC Paris, for example, the latest incoming cohort, only 5% of that class is from France so the mix of cultures and backgrounds and geographies is really.
[00:19:42.990] – Caroline
Truly deep I would also add to that a lot of the US schools when they’re reporting the international population a lot of those people are dual passport holders, right? So they’re US plus something else and they’ve spent a lot of their life in the US or they’re green card holders and they are citizens of another country but they were in the US before they went to business school so their exposure may not be as truly international as it appears when you look at the class statistics right?
[00:20:19.220] – John
Exactly. You have no regrets having gone to INSEAD, I’m sure absolutely not. Maria has no regrets about going to Harvard, right?
[00:20:29.170] – Maria
No. I wish if INSEAD had been a two year program I might have gone there because I had such an international career prior and I loved being international and life has not led me to be international right now but as soon as my kid goes away to College, I am hoping to be international again so it was just more like the duration I was like, man, I don’t know, I need more time at school and I would have loved to jump between France and Singapore and Singapore and France oh, gosh, it must have been incredible.
[00:21:01.510] – John
Absolutely. Well, for all of you out there who have an interest in maybe doing a European or other kind of international degree, take a look at our ranking lots of information there for you to see. Maybe schools that you may be less familiar with that you should become more familiar with. And if you have a view on Adam Grant’s proposal to do away with the two year MBA and replace it with the one and the three, we’d love to hear from you too. Meantime, Maria, Caroline, thank you so much this is John Byrne with Poets and Quants you’ve been listening to Business Casual.