I read yesterday's Financial Times' annual rankings of top business schools with unusual interest. Having represented the B-schools at Duke, UNC and UCLA, I know how important the rankings are. And, having spoken with several friends at top business schools, I knew some were feeling the impact of the recent economic downturn.
But, the FT section revealed a perfect storm in the once rarified world of the
business schools. Many have lost 25 percent or more of their endowments, forestalling new building initiatives and program expansion. Prospective students, who had ridden out previous economic downturns by seeking the safety of a two-year graduate business degree, can no longer afford the high costs. And, with endowments dwindling, the B-schools simply can't afford to offer financial aid.
As is the case in other, hard hit sectors, the very best B-schools will most certainly improvise and, ultimately, emerge as stronger, more relevant institutions of higher learning. Others, though, will flunk out.
I've always been amused by the importance ascribed to the rankings by B-school administrators. Otherwise smart, sober and sophisticated businesspeople despair if the dear alma mater drops a rank or two in the FT, US News or BusinessWeek rankings. At the same time, students, faculty and administrators alike reenact New Year's Eve on campus should the school do well.
I remember listening to one endless debate among Ph.D's trying to decide whether it was prudent to merchandise the school's recent number three ranking in executive education. They'd not been in the top 20 the year before, so this was a big deal. Some argued for t-shirts, coffee mugs, advertisements, etc. Others, though, worried the school might drop in the subsequent rankings. "We'll look like fools then if we gloat now." The cooler heads prevailed and nothing was done.
I have to believe some of those very same administrators are now debating more weighty issues, such as, "How are we going to attract new students when they can't afford tuition and we can't afford financial aid?" It's a business conundrum only a top business school could truly appreciate.