Business school faculty say rankings have consequences. True for them, true for state economic development efforts.

Last week we wrote about Washington’s less-than-stellar, No. 39 ranking on the Chief Executives “Best and Worst States for Business” survey. We noted that we don’t put a lot of stock in these “best places” kind of reports. In our weekly newsletter, we added,

The Chief Executive magazine rankings are just one of many attempts to gauge business climate. We’re skeptical of most, well, of all of them. But we believe there’s something to learn from most of them.

The newsletter referred readers to a Washington Research Council report that examined various business climate rankings. The WRC explains, 

As we’ve written before, there is no “best business climate.” The number of claimants to the title makes the point. As criteria change, new contenders arise. Different industries will place higher or lower emphases on factors like land and energy costs, pres- ence of research universities, access to markets and capital, business taxes, regulatory requirements and so on.

So we were intrigued by a Seattle Times report that cited concerns raised about business school rankings.

Officials at 21 universities, including the University of Washington, have co-authored a polite yet pointed critique of the business-school rankings widely used by students, donors and employers to assess those institutions that produce the nation’s MBAs.

Being business academics, they don’t recommend revolution.

But after complaining that such rankings have “a remarkable impact” despite “focusing almost exclusively on the short-term economic returns” for graduates, the authors do urge colleagues “to take a collective stand against existing rankings.”

As with critiques of business climate rankings, the academics point out that criteria vary, the rankings can be biased by the selection of metrics, and that the results can be both misleading and unduly influential.

“Rankings tend to be a one-size-fits-all, and students are not all one size,” says Vikki Haag Day, assistant dean for undergraduate programs at Foster [School of Business at the University of Washington]…

The rankings published by the likes of U.S. News & World Report or the website Poets & Quants often focus on the average starting salary coming out of business school, adding in factors such as what percentage of students have jobs on the day they graduate.

The Foster School takes a more nuanced approach.

Day, who stressed she only speaks for Foster’s undergraduate program, says one improvement over such ratings is found in the sort of calculator that Foster has created for MBA candidates.

It takes 10 data sets collected by six organizations and cranks out school rankings based on priorities indicated by a prospective student.

Considerations include average student debt and employers’ opinions of the school as well as the standard earnings metrics.

Rather than boycotting data collected by outside organizations, she says, “I just hope we can work to make that snapshot more unique to the person who’s looking at it.”

We feel the same way about business climate assessments: Use the information, consider the source and what the source values, and use your own judgment. There’s value in the data.

And, of course, use the Opportunity Washington Scorecard to benchmark our state’s performance.