I constantly hear two comments from applicants related to MBA admissions. Both of them are myths that I want to bust once and for all:
Myth #1: Once you attend an MBA program outside the Top 10, it doesn’t matter which school it is, so you may as well go to the least expensive one you get into.
Myth #2: It doesn’t pay to get an MBA outside the M7/Top 10.
When asked my opinion of these MBA memes, I politely explain why I think they are utter nonsense, the product of lazy minds and nothing more. The reality about the value of MBA programs outside the Top 10 is much more complex.
Your top 10 may vary
Schools inside and outside the Top 10 vary in terms of their approach to management education and their academic strengths. Some schools may be excellent for a given specialty. For example, Smeal and Broad are generally not in any overall Top 10 ranking, however, both programs are in the U.S. News top five for supply chain management and logistics. Broad is #1. They may be excellent choices if that’s your interest. Babson is renowned for teaching entrepreneurship (usually ranked #1 in U.S. News for entrepreneurship), yet it is usually in the bottom half of the top 100 overall. For those specialties, these schools may suit your needs as well or better than programs ranked overall in the Top 10 – especially if you can’t get into the Top 10.
Consider that there are hundreds of MBA programs outside the Top 10, and a world of difference among all the schools. Before you apply, understand those differences. Seek schools that are equipped with the curricular, extracurricular, and career management strengths to help you achieve your goals. Only then can you compare costs and anticipated return on investment.
Also keep in mind that rankings change year to year, sometimes with volatile shifts. A school that was ranked #5 one year might fall to #14 the following year due to a change in one or more metrics. For that reason alone, investing too much trust in Top 10 rankings makes no sense. Applicants who choose a school based on Myth #1 and without the analysis I suggest are simply basing a major investment in time and money on folklore.
Determining ROI & career satisfaction
Whether it pays to get an MBA at School X–regardless of that school being in the Top 10, Top 20, or Top 50–depends on both the school and on you. Here are a few questions that you need to answer:
- How much are you making currently? (That will determine your opportunity cost if you are considering a full-time program.)
- What is the cost of the program? That is your out-of-pocket cost of going to business school. I wouldn’t include housing and food because you will have those expenses regardless or whether you go to b-school or not.
- What is the typical salary of MBA grads from your target program who found a job in your area of interest? (Overall school averages are much less worthwhile.)
- Is there a non-financial benefit that you seek in addition to classic financial ROI? (Moving into a job you will enjoy, for example.)
It is true that average salaries at different schools post-MBA tend to decline as you go down the rankings. However, for the overwhelming majority of MBAs, ROI is positive and MBA alumni satisfaction per GMAC surveys and Wall Street Journal research is overwhelmingly high, despite two recessions in the last 15 years. This data includes survey responses from schools outside the Top 10.
Assess your needs. Determine your investment, including opportunity cost. Evaluate probable return – both financial and non-financial – at schools that offer the best chance of satisfying your needs and helping you achieve your goals. Then, and only then, decide whether your MBA is worth the cost and which ones are right for you.
Don’t trust myths about rankings to determine where you will invest your time and money. Don’t make a major life decision based on fables and fantasy. Do your homework, learn about the schools in a holistic way, and learn to look beyond rankings.
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