Measuring and Magnifying Impact

• The Positive Impact Rating was created to move business schools away from tracking graduates’ salaries and toward measuring graduates’ societal impact.
• The PIR assessment rates schools at one of five levels: Beginning, Emerging, Progressing, Transforming, and Pioneering.
• By measuring a school’s positive impact through the student point of view, the PIR has inspired business schools to include more students in their strategic discussions.

For decades, business schools have used the dominant rankings systems—from organizations ranging from the Financial Times to U.S. News & World Report—as benchmarks of their effectiveness. But these systems largely measure the incomes and market value of business school graduates, not their societal impact. For this reason, the various rankings have been criticized broadly for being reductionist and out of touch with changing conditions in business and society.

To solve the world’s global challenges, we will need leaders who use a benchmark other than income to measure their success. Achieving that goal will require leaders who have received a different kind of education.

Stakeholders of business education worldwide are pushing for change. Students want their educations to focus on creating positive societal impact. Businesses are recruiting graduates who are prepared to lead responsibly in a fundamentally changing business environment. And accreditation agencies have revised their standards to require schools to shift their focus. AACSB, for example, asks schools to demonstrate societal impact, while EFMD asks them to integrate ethics, responsibility, and sustainability into their policies and actions.

Business faculty are also advocating for change. Both of us are among a group of 50 scholars who developed a new rating system called the Positive Impact Rating (PIR). Launched in 2019, the PIR is based on a vision of the business school’s purpose that is very different from the vision of existing rankings. It answers a very different set of questions: Which business schools are true leaders in creating societal impact? Which schools are developing students as change agents? Which ones effectively walk their talk in creating impact, and which ones have processes in place to integrate the voices of their students in key decisions at the school?

The Challenge of Measuring Impact

To develop the PIR methodology, we first had to figure out how to measure positive impact. To address this challenge, we interviewed existing rankings experts to understand the limitations of the methods commonly used to measure a school’s efforts. These methods include assessing syllabi and courses, counting the publications in certain journals, or tracking the number of female faculty members. However, such measures were not seen as fitting for the PIR’s purpose.

We knew that if we wanted to shift the focus toward tangible positive impact, we needed to hear what stakeholders had to say.  Therefore, we knew that stakeholder input would have to be an integral component of the new rating system.

Several of the people who initiated the PIR methodology had already contributed to the conceptual foundations of the Globally Responsible Leadership Initiative’s 50+20 vision. Their perspectives helped us frame the challenges of measuring business school impact.

The PIR assessment is based on surveys of just one stakeholder group: the school’s own students.

We originally had considered creating a rating that could be integrated into existing ranking systems. But after one and a half years, during which we tested three survey prototypes at schools in different geographic areas, our next steps were hotly debated in international sessions. By 2019, we acknowledged that our rating was too radically different to work within any existing ranking.

We then held a one-week retreat attended by business school experts, students, and representatives of engaged stakeholders such as Oxfam and the World Wildlife Foundation. It was at this retreat that we clarified the underlying design principles and survey method for the PIR.

The broad consensus was that the approach should emphasize two components: student perceptions and qualitative methods. To contain the PIR, we created a Swiss association to protect the principles, purpose, and independence of the rating.

The PIR Process

The PIR methodology comprises three broad attributes that collectively encompass seven dimensions: energizing (governance and culture), educating (programs, learning methods, and student support), and engaging (institution as a role model and public engagement). Each participating school is then rated at one of five levels: Beginning, Emerging, Progressing, Transforming, and Pioneering.

The PIR assessment is based on surveys of just one stakeholder group: the school’s own students. To conduct these surveys, the PIR works directly with student organizations such as oikos International, Net Impact, and Students Organising for Sustainability UK. It also coordinates its efforts with relevant members of each business school’s administration.

Once a school signs on for the rating process, the PIR sends its students a unique link to a survey, which they can complete in less than 10 minutes. After the results are in, most schools will kick-start change by holding meetings that include the head of the school and student representatives.

Both administrators and students have access to the survey results, and they all can use the assessment’s online tool to compare their school’s current results with the average results of all participants. This tool also reports the school’s progress over all years of its participation. This allows the entire community to draw insights and develop concrete actions.

The costs of the PIR—which include running the survey, analyzing the data, reporting the results, and sharing best practice cases and peer-learning opportunities—are distributed across participating schools. The more schools that participate, the lower the cost will be. To date, schools pay 1,600 EUR (1,600 USD) annually, but we hope to reduce this fee in future editions.

A Tool for Reporting

The main reason schools cite for participating in the PIR is the need to collect verified data for reporting, accreditations, and rankings. Among participating schools, 62 percent use their PIR results for AACSB accreditation, 49 percent for Sharing Information on Progress reporting for the United Nations’ Principles for Responsible Management Education, and 35 percent for EQUIS accreditation from EFMD.

Where accreditation is concerned, the PIR is intended only as a supplemental tool. Regarding AACSB accreditation, for example, the PIR by itself would not provide sufficient data to meet the standards’ expectations for societal impact. The PIR does allow schools to complement anecdotal evidence with quantitative and qualitative data in three relevant reporting areas for AACSB:

Strategic management and innovation. AACSB asks, How does your business school strategically intend to make a positive societal impact? The PIR’s Energizing area measures how a school’s governance and culture help move it forward toward that goal. Students assess not only how well a school is aligned with its purpose and vision, but also whether the school is naturally achieving or working toward positive societal outcomes.

Learner success. AACSB asks, How does your school’s curricula promote positive societal impact? The Educating area contains dimensions that assess and provide evidence of how well a school has integrated ethics, responsibility, and sustainability into its programs. This area assesses the learning methods schools have adopted, the support students receive, and the tools that students will use to solve societal challenges in their future careers.

Collaborate for impact. AACSB asks, How do school-supported activities (beyond research) demonstrate positive societal impact? In AACSB reporting, schools are required to demonstrate thought leadership, engagement, and societal impact through collaboration with external stakeholders. The Engaging area reflects the school’s active efforts to interact with and earn the trust of students and society, as well as its status as a respected public citizen.

The 2023 edition of the PIR assessment will include a new, optional section, where AACSB schools can ask students for their perspectives on school initiatives related to the Sustainable Development Goals. For AACSB-member schools, these additions will enrich the reports they submit for standards 4 (curriculum) and 8 (scholarship), as well as allow schools to apply this information to Standard 9 (table 9.1). For all three standards, schools must ensure that their social impact initiatives are related to their missions and chosen areas of focus.

A Tool for Change

We had originally created the PIR as a way for schools to benchmark themselves against their peers and highlight their efforts toward positive impact. However, we have found that most schools are using the PIR more as a tool for internal development than as a comparative rating.

For example, Antwerp Management School in Belgium used its first PIR assessment as a baseline that inspired its administration to integrate student leaders into the school’s transformation process. The school then used its second and third PIR assessments to measure where its societal impact efforts were most successful and to identify where to focus next. As a result, the school has moved from being a Progressing school to being a Transforming school in just three years.

The student voice greatly matters to schools. Students care about their educations, are clear in their criticism, and are willing to help effect change.

INCAE in Costa Rica has used its annual survey results to solidify its internal change processes. This has included integrating students into its administration’s decisions, measuring its progress, and motivating its community for the year to come.

Esade in Spain learned from its PIR results that more than 1,000 students wanted sustainability and philanthropy topics to be embedded in their courses. In response, the school formed a joint student and staff committee to review and analyze sustainability content and coverage across all of its curricula.

Giving Students a Voice

Some might perceive the fact that the PIR measures only student perceptions as a weakness of the system. However, that approach has become its biggest strength. In our surveys, we ask students to assess their schools from their perspectives, and then we compare the results with other schools and with previous cohorts of students.

We have come to realize that the student voice greatly matters to schools; it is an important enabler of internal change. Students know their schools from their own experience, care about their educations, are clear in their criticism, and are willing to help effect change. The PIR has been a catalyst for business schools to include this important stakeholder group in its strategic discussions and operational change processes.

An Impactful Alternative

Those of us who contributed to the PIR’s development shared a common aspiration: to generate a global list of business schools that acts as an alternative to existing rankings. Now that it is in place, the PIR has become more than a rating. It has become a tool that drives change at participating institutions. We invite all business schools to explore how they might use the PIR to drive their own continuing improvement.

We hope to see that change accelerate with each annual addition of the PIR, as business schools survey new generations of students and continue to build on past progress. And as more schools advance from Progressing to Transforming to Pioneering, their collective societal impact will continue to make a tangible positive difference in their communities and throughout the world.

The authors would like to recognize John Watt, PIR Manager, for his support in drafting this article.