The illusion
Jonathan D.
Accomplished Education Industry Executive boasting over 12 years of successful leadership in steering education businesses growth
The GMAC has successfully perpetuated the idea that the GMAT is “a key indicator of candidate preparedness for graduate business degree programs”.?And they have every reason to do so, as it is a cash making product (a 2014 article by John A. Byrne from Poets & Quants put the gross profit on the actual exam around 48%).
Could this be the most significant deception in the industry? Is it truly necessary for all aspiring business students to take the GMAT? The GMAC insists that it is, but I say bollocks. You don’t believe me? Let’s just look at some figures.
How many schools and programs of the ~7,000 programs at ~2,300 graduate business schools that use the GMAT have a GMAT average above 700? Less than 70 (and that’s large), i.e., ~1%. The average GMAT score of the top US business schools is 696 and in Europe, only INSEAD and LBS have a GMAT average above 700.
How many schools and programs of the ~7,000 programs at ~2,300 graduate business schools that use the GMAT would take any applicant with a score in the low 600 (i.e., below the 50th percentile)? Most. Except for the most prestigious MBA programs in the US (M7 and S10), along with a handful of high-ranking Indian and European MBA programs (IIMs, ISB, INSEAD, and LBS), many of the top 100 MBA programs openly report an average GMAT score below 700. Let’s just look at the GMAT average at a few ‘big names’ in the top 100 MBA.
Warwick (#57) – GMAT 650 (70th percentile)
Babson (#65) – GMAT 629 (62nd percentile)
WashU (#29) – GMAT 670 (78th percentile)
Oxford (#31) – GMAT 690 (84th percentile)
NUS (#21) – GMAT 670 (78th percentile)
CEIBS (#16) – GMAT 678 (79th percentile)?
Programs outside of the top 100 don’t have stricter GMAT requirements. In fact, most of these programs utilize the GMAT as a means of complying with accreditation criteria, including the importance of upholding rigorous admission procedures and standards, including “standardized testing and interviews” (as outlined by the MBA Accreditation Criteria set by AMBA).
?
And this is exactly what the GMAC admitted on March 8 when they released their new GMAT Focus. The GMAT must become an easier exam so that it is relevant for 150,000 people to take the test on a yearly basis. But by acknowledging this, they also directly acknowledge that the exam is not the gold standard to assess a candidate preparedness for graduate business degree programs.
?
领英推荐
The GMAT – in its current format – was only relevant for elite programs to measure the level of commitment of an elite MBA applicant. More than a revamped and easier exam, what top business schools need more than ever is to develop a test that really assesses a candidate “preparedness for graduate business degree programs”. The GMAT is antiquated. In today’s business world, we need professionals who are fluent in data (in a business context), creative and with superior interpersonal and communication skills. From Wharton Team Based Discussion (a mini case study) to the ieGAT developed by the IE International University (IEU), we’ve seen some business schools making significant moves towards enhancing their recruitment efforts. With the rise of gamification, top business schools could look at partnering with leading consulting firms like McKinsey, Bain, or BCG to develop pre-interview screening test using mini games to assess candidates.
?
GMAT test-taking volume has plunged to historic lows – from ~260,000 tests taken in 2016 down to ~156,000 tests taken in 2021 (a ~40% decline). In 2021, only 38,509 tests were taken in the U.S. in comparison to 117,511 tests taken in 2012. The GMAC only survives because of the illusion that they have created. An illusion that is well known and unfortunately not challenged by business schools because all have a vested interest in maintaining the GMAT alive – the leads. There’s no better lead source than the GMAT as business schools can buy leads and therefore build an active pipeline of prospective students. The business school I worked with was notoriously known in the industry to buy the whole GMAT leads data every single year (it was quite cheap by then at around $1 per lead – so roughly $300k a year).
?
But I believe that time is changing. Elite business schools will need more than the GMAT Focus while the majority of graduate business programs will continue to offer GMAT waivers and in-house alternatives to lure more applicants in. Eventually, the GMAT will become irrelevant – this is my biggest hope.
Case of the Month
Who: European female, 32 years old
Professional background:?8+ years in the food industry
Academic background:?BBA from an elite French business school and dual master (LSE)
GRE:?318
Target Schools:?INSEAD, HBS, GSB
Results:?INSEAD - HBS (pending post-interview), GSB (pending post-interview)
What did we do?
I worked with this applicant for over a year and quickly realized that she had an amazing potential as an MBA applicant. While the food industry is undergoing massive disruption/revolution (think alternative proteins), it is underrepresented at top business schools. In addition, she had been an intrapreneur, traveled across East Africa and displayed a genuine passion to make the value chain more sustainable. I quickly encouraged her to look beyond just INSEAD (which was the only school she had in mind) and convinced her to give HBS and GSB a shot. Despite a subpar GRE score, she secured an admission offer at INSEAD and was invited for interviews at both HBS and GSB (updated results will be shared). She is the perfect example that a GMAT/GRE score doesn't define your MBA potential. She intelligently leveraged her professional and life experiences to build a powerful and impactful narrative that made 3 top MBA programs wanting to know more about her.