Welcome back to our Professor Profiles! In this series, we spotlight two standout professors from each of the M7 business schools, exploring their research, careers, and the ideas that define their work.
In this article, we’re taking a look at two professors from MIT Sloan: Andrew Lo and Deborah Ancona.
Andrew Lo
MIT Sloan’s Andrew Lo is the Charles E. and Susan T. Harris Professor, a Professor of Finance, and the Director of the Laboratory for Financial Engineering.
Lo teaches courses such as Finance Theory I, Finance Theory II, and Investments. He holds a BA in economics from Yale University, as well as an AM and PhD in economics from Harvard University.
Andrew Lo has earned numerous awards throughout his extensive academic career. The list includes Fellowships from Batterymarch, Guggenheim, and Sloan; “best-of-the-year” awards in financial engineering and risk management from IAFE-SunGard (the former) and the Global Association of Risk Professionals (the latter); awards for teaching excellence from MIT Sloan and Pennsylvania Wharton; and a spot on TIME’s “100 most influential people in the world” list.
Currently, Lo is a fellow of:
- The American Finance Association
- Academia Sinica
- The American Academy of Arts and Sciences
- The Econometric Society
- The Society of Financial Econometrics
Lo has published extensively in academic journals, and has authored two books: “The Adaptive Markets Hypothesis: An Evolutionary Approach to Understanding Financial System Dynamics” and “Adaptive Markets: Financial Evolution at the Speed of Thought.” These books have received several awards of their own.
Within MIT, Lo not only teaches at Sloan, but also acts as principal investigator at the MIT Computer Science and Artificial Intelligence Laboratory. In addition to that, he holds the positions of external faculty member of the Santa Fe Institute, and of research associate of the National Bureau of Economic Research.
Lo’s Research
Andrew Lo’s research examines four areas:
- Evolutionary models of investor behavior and adaptive markets
- Artificial intelligence and financial technology
- Healthcare finance
- Impact investing
In one recent research project, Lo investigated the evolution behind bias and discrimination, considering how this knowledge might help reduce their effects. In his book, “Adaptive Markets: Financial Evolution at the Speed of Thought,” Lo expands on his interest in evolution, noting that it can “explain how our behaviors interact.” He says:
“Strong emotions like fear are an immediate call-to-arms to survive, selected by evolution over millions of generations of life in hostile environments. Our more recently evolved cognitive functions, such as language and logical reasoning, are suppressed until the perceived threat to our survival is over, that is, until our emotional reaction subsides. The universality of this fear response means that fear has been so useful in past environments that it has evolved to override all other neural components under sufficient threat.”
Lo sits on the board of multiple healthcare organizations: for- and non-profit, public and private.
You can find Andrew Lo on Google Scholar and on X.
Deborah Ancona
Deborah Ancona is the Seley Distinguished Professor of Management and a Professor of Organization Studies at MIT Sloan. She is part of the MIT Center for Collective Intelligence, and the Founder of the MIT Leadership Center. Ancona holds a BA and an MS in psychology from the University of Pennsylvania and a PhD in management from Columbia University.
Throughout her career, Ancona’s research into team dynamics and performance has turned academic heads. She has published her studies in journals such as Administrative Science Quarterly, the Academy of Management Journal, Organization Science, and the MIT Sloan Management Review.
She has written several books, including “Managing for the Future: Organizational Behavior and Processes,” which examines the skills that the diverse organizations of today demand. Her expertise on leadership has led companies such as Bose, Takeda, OCP, and Accenture to call on her as a consultant, and she has served on the Board of the Penn Graduate School of Education and the working group of the Canadian Council of Academies.
Ancona’s Research
Throughout all of this, Ancona is particularly well-known for one theory: the “X-Teams theory.”
Ancona’s “X-Team” theory is the method by which organizations can drive innovation. It challenges team members to “externally orient” themselves, connecting with and learning from the world around them. She explains the theory in depth in her book, “X-Teams: How to Build Teams That Lead, Innovate, and Succeed,” and in her related Harvard Business Review article, “In Praise of the Incomplete Leader.” She developed the concept through her pioneering research into how successful teams operate.
Alongside her research into X-Teams, Ancona is known for her work on the 4-CAP Model for Leadership, collaboratively developed with her colleagues at MIT Sloan. This model prompts leaders to develop four key capabilities, claiming that doing so will increase effective leadership in times of uncertainty.
These capabilities are: “sensemaking,” or the process of immersing yourself in, understanding, and documenting your environment; “relating,” or the skill of being visible and engaging in constant, direct, and honest communication — limited not just to what you know, but what you don’t, and what you plan to do; “visioning,” or the ability to articulate an organization’s future possibilities so vividly that the vision can be shared by many people; and, finally, “inventing,” or the process by which individuals within an organization are enabled to move that organization forward via the creation of new processes and structures.
The model helps individuals address common leadership questions, such as:
- What is a way forward in an age of uncertainty?
- How can I effectively relate to my stakeholders and others?
- How can I successfully act in an environment of change rather than be disabled by it?
Ancona’s Teaching
As a professor, Deborah Ancona has many jewels of wisdom to share with students on the topic of leadership. One such jewel is as follows:
“Toxic leaders talk about all the great things they can do. Only later do you start to see the underbelly that isn’t always visible at first glance.”
Ancona attributes her outward-facing perspective to her upbringing — one that took place in a family of medics, and that encompassed a great deal of travel. The experience was “eye-opening,” she describes, and greatly influenced her work — which is “all about going out. It’s seeing from the outside because it opens up new ways of thinking, it exposes you to different ways of living, different value sets, and so I think just opening up the mind.” The experience informed the way she thinks now; she explains that “[w]e’re part of a global economy right now. So if you’re ever going to understand that, I think you need to get out and see it.”
Deborah Ancona can be found on LinkedIn and Google Scholar.
