MBA ranking insight by Roger Martin

An insight regarding MBA ranking by Roger Martin (Dean of Rotman), as the majority of  applicants here are so interested in B-School ranking, this article might be helpful:

4. What is your view of business school rankings?

MBA rankings have become an important measure of an institution's public perception. We may not like the methodology and results of some rankings, but they have taken on a life of their own as applicants, current students and alumni pay attention. On the whole, it is a good thing for the business school system that people care enough to attempt to measure performance and rank the schools. I may wish the rankings did a better job of ranking, but in many respects, the variety of rankings simply reflects the multitude of ways one can look at business school performance, and in every survey there are results that we can look towards with pride. Each ranking in which we agree to participate actually takes an enormous investment of time and resources. There is always an extensive internal survey that requires the compilation of data in a myriad of forms. But the biggest investment is always in the external surveys - surveys of graduates, recruiters and others. Because of the volume of e-mail spam and physical junk mail that graduates and recruiters receive on an ongoing basis, they tend to ignore messages, especially from intense direct-mailing media outlets such as the magazines and newspapers that do these surveys. As a result, there tends to be an enormous amount of work required by the schools to help draw attention to the surveys.

This is an important issue, because the surveys are quite an imposition on our graduates and recruiters. In past years, for example, two media outlets wanted to survey the same class of alumni. We know that graduates are getting annoyed at the survey bombardment. With new surveys coming on stream every year, there are important decisions to be made as to how many surveys the Rotman School can and should invest in, and how much time we can reasonably ask our friends to spend on filling out surveys.

Until a few years ago, business schools in Canada were only ranked once a year by Canadian Business magazine, and only U.S. business schools were surveyed by American magazines. All of the rankings focused on the Full-Time MBA program as the measure of quality at the business schools. The landscape dramatically changed in 1999 with the publication of the first global ranking of business schools by The Financial Times. This opened the flood gates, as American-based magazines began ranking Canadian schools, other media outlets began ranking Executive Education programs including the Executive MBA, and The Wall Street Journal launched a completely new ranking in 2001. As a result, the Rotman School has had to make important decisions as to the range of surveys in which to participate.

Going forward, we have chosen to participate in the surveys of two publications: BusinessWeek and The Financial Times. Here's why.

BusinessWeek was the ‘first-mover’ and has been ranking MBA programs biannually since 1988 (versus 1999 for The Financial Times and 2001 for The Wall Street Journal). As such, it has a very large following. BusinessWeek surveys current graduates (i.e. spring 2004 graduates for the fall 2004 ranking) and takes into account the views of recruiters and assesses the research output of the schools, so it is quite comprehensive. The weakness of the BusinessWeek ranking is that it ranks U.S. and International schools separately –- hardly an approach consistent with the global business economy.

In 2006, we were ranked 3rd amongst international schools in the BusinessWeek survey. In an article, BusinessWeek noted that the Rotman School “leapt six spots to #3, the biggest jump in the ranking” and that the school placed second in both the corporate recruiters and intellectual capital polls.

Four other Canadian business schools also made the top ten list of schools outside the United States, which is great news: I have always said that the more schools Canada has ranked on the global stage, the better off Canada will be competitively on the world stage.

We also participated in the BusinessWeek ranking of Executive Education programs in the fall of 2005. The Rotman School was ranked 13th in customized executive programs in the world. This was the second time that Rotman participated in this global survey of corporate managers and HR executives. It is an important survey, as it is based entirely on the opinions of the people who use our programs. Our open-enrollment programs also ranked in the top 20 in this survey.

The Financial Times has the most transparent and broad ranking system, featuring 21 measures across a wide variety of categories and an explicit weighting of each of the criteria. Importantly, it has ranked all schools on one list since its inception in 1999.

The Financial Times published its 2006 ranking in January, and while Rotman continues to stand among the leading business schools in the world, we slipped three spots from the previous year to 24 th place in the world.  On the bright side, we once again ranked among the top ten schools in the world for finance, and received high marks (17 th) for the research generated by our faculty.

One thing that is clear from closer inspection is that competition in the global business school business is heating up. Some of the world’s greatest university brand names are creating powerful new forces in the business school game.  Oxford and HEC are legendary global brands in university education – and both moved ahead of us and are now serious competitors for the top tier. As recently as three or four years ago, their MBA programs weren’t even in the picture.  Also, China has arrived: CEIBS, the Chinese school set up with the help of the European Union, has gone from nowhere to one spot ahead of us.

While dropping three spots in this increasingly competitive world is sobering, it is heartening to have passed legendary schools such as Duke (Fuqua) and University of Virginia (Darden) – schools with great histories and global brand names.  That is a substantial accomplishment.

To truly understand the dynamics of the categories, it is important to divide them into two pieces. The first piece represents the eight categories accounting for 59% of the weighting that is based on the student survey. The critical aspect of that survey is that it is time-delayed. The results in these eight categories in the 2006 rankings come from surveys of the classes of 2000, 2001 and 2002 – students who entered the Rotman MBA program six to eight years ago. The plan to transform the School only started to take shape in the fall of 1998, and the first actions started to take place in 1999-2000. The class of 2000 entered the Rotman School without any knowledge of the impending strategy change, and the class of 2001 with little knowledge. Neither class benefited much from the rising reputation, because it hadn’t risen yet. The class of 2002 saw only the beginnings of the turnaround, and exited into an extremely tough job market.

The second piece, accounting for the remaining 41% of the ranking, is based on current data collected as of the summer of 2005 – items such as proportion of students (in the class of 2005) with a job after 3 months, proportion of international students in the class of 2005 and level of faculty research output over the past two years.

If we look first at the rating stemming from the current data, we can see that we are up in 5 categories representing 23% of the weighting, down in 2 representing 4% and flat in 5 (14%). So on the current data, we continue our smart progress ahead. But on the delayed data categories, the story is a tough one: we are up in 1 category accounting for 2% and down in 7, accounting for 57%; the latter is fully responsible for the decline from 21 to 24.

There are certainly things about which we can be very happy.  Our rating for faculty research rose from 22 to 17 which is a real accomplishment.  It means our faculty members are creating new knowledge content that is making a meaningful contribution on a global basis.  And our Phd program is now ranked 25 th. Both faculty and the PhD program were ranked 58 th in 2002, so the progress has been impressive. And we have achieved our highest ever ranking for percentage of graduates with jobs within three months – 93% and 22 nd ranked.

With respect to the FT ranking, patience is required on our part, in order for the time-delayed portion of the ranking to ‘catch up’ and reflect the innovative changes we have made at the Rotman School. I am confident that over the next few years, our efforts to redesign business education will be fully represented in our ranking on the FT Survey.

We will continue to cooperate with The Financial Times, which is the most comprehensive and realistic survey, as well as BusinessWeek, which is improving, but still needs to enter the global village and convert to a single unified global list.