America's best MBA programs: On the mend

December 15, 2010: 9:01 AM ET

Business schools and their graduates have weathered one of the toughest economic storms to ever hit the business world. But it looks like things are slowly getting back to normal, with Harvard and London Business School earning top spots in Poets&Quants' first MBA rankings.

By John A. Byrne, contributor

(poetsandquants.com) -- Things are slowly getting back to normal at the world's top business schools. Job offers are up nearly everywhere, and corporate recruiters -- especially from the once hard-hit financial sector -- are back in hiring mode. So it is with little surprise, perhaps, that the Harvard Business School, the most famous MBA-granting institution in the world, is on top again.

In a new ranking by Poets&Quants, Harvard won first-place honors among 100 of the best business schools in the U.S. Right behind Harvard was its West Coast rival Stanford, the University of Chicago's Booth School of Business, Wharton, Columbia Business School, and Dartmouth's Tuck School of Business (the full list of all 100 schools).

London Business School, meantime, came in first among 50 of the best B-schools outside the U.S. France's INSEAD was second, followed by IESE and IE Business School in Spain, and HEC in Paris (the full list of all 50 ranked schools).

The Poets&Quants ranking is a composite of the five major MBA rankings published by Bloomberg BusinessWeek, The Economist, The Financial Times, Forbes, and U.S. News & World Report. The ranking takes into account a wealth of quantitative and qualitative data captured in the five major lists, from surveys of corporate recruiters, MBA graduates, deans and faculty publication records, to median GPA and GMAT scores of entering students, as well as salary and employment statistics for the latest graduating class.

To some long-time watchers of MBA education, there may be little surprise seeing Harvard and Stanford at the top of the rankings. But BusinessWeek's biennial rankings have never included Harvard or Stanford in the top spot. Over the past 24 years, the publication has awarded that accolade to Northwestern's Kellogg School five times, to the University of Pennsylvania's Wharton School four times, and to the University of Chicago's Booth School on three occasions.

The last time The Financial Times ranked Harvard first on its global MBA rankings was back in 2005. Since then, Harvard has lost out to Wharton (four times in a row) and to London Business School (in the 2010 FT ranking). The highest rank Stanford has ever achieved in The Financial Times ranking was third, in 2007.

Business schools and their graduates have weathered one of the toughest economic storms to ever hit the business world. As the school synonymous with the MBA degree, Harvard especially took it on the chin. Critics quickly pointed fingers at the school for the greed and excess that led to the global crash. The Masters of the Universe quickly became, in the words of one of Harvard's own graduates, the "Masters of Disaster" with their fingerprints on many a financial fiasco.

2006 Harvard MBA Philip Delves Broughton noted that the last two heads of Merrill Lynch -- Stan O'Neal and John Thain -- were both Harvard MBAs, along with then Securities & Exchange Commission head Chris Cox and U.S. Treasury Secretary Hank Paulson, who watched as Lehman Brothers went under.

Today, however, the school's MBAs are doing quite well. Some 95% of the class of 2010 landed jobs three months after graduation. The median starting salary for a Harvard MBA this year was $110,000, down slightly from $114,000 a year earlier. And two out of three graduates were handed signing bonuses of $20,000, while one of every four grads picked up additional "guaranteed compensation" of $23,000, not including stock or stock options or performance bonuses. The percentage of Harvard MBAs headed into investment banking is back into the double-digits, 10% this year from a six-year low of 6% in 2009.

There is no shortage of highly qualified applicants to the top schools. For the class of 2012, Harvard had its pick from the second largest pool of applicants in its history -- 9,524 for 910 seats in the first-year class -- an increase of 5% over 2009. This year's entering class had the highest GMAT score (722) in Harvard's history.

Harvard's advantages, of course, are the envy of the business school world. The school's resources are so expansive, its financials so rich, that it could easily be a university itself. Some 33 separate buildings, from a massive fitness center to a small, quiet chapel, adorn its 40-acre campus alongside the Charles River.

Just two months ago, the school received a $50 million gift from Indian entrepreneur Ratan Tata for a 34th building -- a new academic and residential center for executive education. The school's $2.8 billion endowment casts a shadow over all rivals. In comparison, the endowment at Stanford is $825 million; at Wharton, $800 million; and at Columbia, $410 million.

A new Harvard dean, Nitin Nohira, is promising to pursue "bold, brave things" that will set the course for the entire field of management education over the next 100 years. Just five months into his tenure, Nohira has yet to clearly articulate a vision for the school. In stump speeches before alumni, he has talked about what Harvard is now calling the "five I's": innovation, intellectual ambition, internationalization, inclusion, and integration with the rest of the university.

For all the politically correct talk that comes out of Harvard these days, the school remains a business boot camp. In the first-year, MBA candidates must read, absorb and debate some 270 case studies in 10 courses, often fighting for "air time" with equally clever students just as eager as they are to score points with professors.

Yet the school has worked hard to become more nurturing. "When I first arrived and was welcomed to the school, the dean told us to 'look to your left and look to your right. These people will be sitting next to you on the graduation platform,'" says Justine Lelchuk, co-president of the MBA Student Association. "It was such a welcoming statement, so different from what you might hear about Harvard."

Students say Harvard doesn't live up to its reputation as a place that only attracts people with sharp elbows and cutting comments.

"It's not cutthroat," says Brett Gibson, the other co-president of the MBA Student Association. "So many classmates helped each other get jobs this past recruiting season. No one hoards his or her contacts."

Whether Harvard or London, Chicago or INSEAD, it looks like the good times are coming back.

"When you talk to recruiters, they argue that MBAs offer incredible value," says David Wilson, CEO of the Graduate Management Admission Council. "Our surveys show that 99% reported satisfaction with the MBAs they've hired. That is the highest level of satisfaction we've recorded and that was in May of this year. Nine out of ten MBAs in 2010 (versus 84% in 2009) have a job."

More from Poets&Quants:

Poets&Quants' Top 100 MBA Programs in the U.S.

Poets&Quants Top 50 MBA Programs Outside the U.S.

Turning the Tables: Ranking the MBA Rankings

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About This Author
John A. Byrne
John A. Byrne
Contributor , Fortune

John A. Byrne is chairman and editor-in-chief of C-Change Media Inc., a digital media startup that is launching a network of websites for the global business community, including PoetsandQuants.com, a website for analysis, news, and features on prestige MBAs and the best business education in the world. Byrne was until recently executive editor and editor-in-chief of BusinessWeek.com. Byrne is the author or co-author of eight books on business, leadership, and management, including two national bestsellers.

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