A business school may not seem like the most logical place to find a solution for virulent disease. However, several MIT Sloan scholars have recently taken a deep look at cancer research and treatment in an effort to speed the development of a cure. From the way research is funded to the efficiency of genomic sequencing, the methods and models created by these MIT Sloan professors have the potential to reshape the industry and raise the probability of finding a cure.
Using Dynamic Work Design to improve genetic sequencing
Business professionals typically think of “work design” as an approach to making repetitive human activity more productive—and therefore especially suited for the factory floor. As such, work design would seem just about as far from the cancer research lab as you could get. However, a recent paper by MIT Sloan Lecturer Sheila Dodge and MIT Sloan Professors Don Kieffer and Nelson Repenning proves just he opposite, sharing the results of their extended effort to improve the productivity of the genomic sequence operation at the Broad Institute of MIT and Harvard using an emerging framework called Dynamic Work Design.
The report details how, in the last three years, the Broad Institute—a leader in genomic research—has made dramatic reductions in cycle time and cost using dynamic work design principles to reconfigure the process of DNA sequencing. These gains allow genetic researchers to both run more experiments and get the results of those experiments back more quickly. Redesigning the Broad’s work has played a critical role in identifying the roots of the Ebola virus and is quite literally speeding the search for a cure to cancer and many other diseases.
Dynamic work design builds on the idea that work needs to “fit” the humans who do it, meaning that it needs to be designed in ways that matches our cognitive and emotional processes. This approach unites the contributions of process improvement methods designed for factory-like settings into a set of cohesive principles that can be extended to more creative or intellectual work. In the case of the Broad, this meant, for example, using process mapping to identify excess work and streamline their process; identifying points in the workflow that could benefit from face-to-face interaction; and instituting the notion of “pull,” a scheme widely used by proponents of lean manufacturing that involves maintaining the ideal amount of (prioritized) work.
You can read the full report here, or learn more about Dynamic Work Design from Kieffer, Repenning, and Dodge firsthand in their Executive Education program, Implementing Improvement Strategies: Dynamic Work Design, as well as the online (self-paced) program, Business Process Design for Strategic Management.
A hedge-fund approach to drug development investment
Cancer research faces a conundrum: despite the many recent breakthroughs in biomedicine, pharmaceutical companies have continued to suffer from mediocre financial performance. Cancer drugs are enormously expensive to develop and have long research and development cycles as well as high likelihood of failure (95%). While the medical and financial payoffs for successful drugs are huge, for long-term investments that range in the hundreds of millions of dollars, this is an especially bleak outlook.
MIT Sloan Professor Andrew Lo has proposed a way for drug companies to use financial engineering methods, such as portfolio theory and securitization, to spread risks among investors and provide appropriate financial incentives to develop successful cancer treatments.
“Although altruism and charitable giving are important elements in responding to these challenges, we cannot rely solely on these motivations given the scale of the problems to be solved,” Lo and his co-authors write in their paper, “Can Financial Engineering Cure Cancer?” He claims that a securitized-debt offering—a “cancer megafund”—would offer investors attractive risk-adjusted returns. The megafund would be financed through a combination of debt and equity invested in a broad range of drug development projects, from a few at the earliest stages of research to several others at later stages.
By structuring biomedical research funding in a research-backed obligation format, incentives to reduce the burden of disease are distributed to a much broader community of stakeholders. This also enables what Lo refers to as a “virtuous circle”—significantly greater resources can be marshalled to take on such challenges, which attracts leading experts to join the effort, which instills more confidence among investors, and so on.
“You can actually make money—good money—by curing cancer,” Lo told Advisor Perspectives. “Instead of declaring war on cancer,” he said, “what we really ought to be doing is putting a price tag on its head.”
Lo has had published numerous articles in finance and economic journals and authored several books, including his most recent title, Adaptive Markets: Financial Evolution at the Speed of Thought, which is currently on the Financial Times and McKinsey 2017 longlist for Best Business Book of the Year.
These MIT scholars are working hard to understand and eliminate impediments to the search for a cure, harnessing proven business methods in the fight to cure cancer.