Archive for health care


How Abstract Is Your Automobile?

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carBe careful about the vehicle you’ve been driving. As sturdy, tangible, useful, and inventive as it looks to you, it may turn out to be merely an abstraction, perhaps nothing more than the mere idea of “transportation” or “going places,” making it unworthy of the thousands of patents protecting its numerous technologies — if the USPTO and America’s elite judges get their way. An abstract automobile? You don’t want to be caught dead driving one. Unfortunately, since the USPTO’s Patent Trial and Appeal Board (PTAB) just ruled that an MRI machine is abstract and thus not patentable under the odious and vague principles of the Supreme Court’s recent Alice decision, it could be that automobiles and virtually every other machine under the sun could be next on the anti-patent chopping block. Your trusty Toyota or your faithful Ford are about to go abstract on you, courtesy of the USPTO. Look out.

In the PTAB’s elite view, as Gene Quinn explains, all the physical wizardry of the mighty MRI machine as claimed in a recent patent application for an improved MRI is just an abstract idea based on the abstraction of “classification.” It defies logic and defies the requirements of the Alice decision and the USPTO’s rules for applying Alice, but the PTAB has become a patent munching zombie that doesn’t seem bound by logic or law. They are one of the strongest forces promoting innovation fatigue. Many innovators are just giving up or going to other nations where IP rights are more meaningful.

The anti-patent forces that have taken hold of far too many influential posts in America view property rights and especially intellectual property rights as a barrier to the ideal society they envision. If only we could get rid of patents, they seem to think, drug prices would fall and Obamacare, for example, would not be such a disaster. But the bounty some intellectuals promise by weakening property rights is an illusion, for without IP rights, what is the incentive to take on the risks and costs of innovation if you cannot benefit from the occasional successes that come from your uncertain work? If your hit product can be taken and marketed by others who did not have to spend so much time and money developing it, then the inventor is often at a competitive disadvantage to everyone else. Why bother?

America’s war on patents is a war on the future of innovation. It’s a war we cannot afford to lose.


Lessons from the British Navy: Why the Cure for Scurvy Took 200 Years to Be Implemented

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The great challenge in innovation is not coming up with a discovery or great invention. The challenge is in making it stick, in nurturing it and growing it so that it spreads and changes the world. Numerous antibodies and barriers are ready to snuff out every great idea, even when it offers a solution that the world is clamoring for. The story of scurvy in the British Navy, as shared in Chapter 10 of Conquering Innovation Fatigue, illustrates this principle.

Scurvy cost the lives of thousands of sailors and soldiers around the world for centuries. For the British Navy, that disease was one of the greatest challenges it faced. On long voyages, 30% or more of the crew might die from scurvy. Through confusion and error among England’s educated elite regarding scurvy, misinformation about its cause and its cure would persist into the 20th century. However, there was credible medical information in the early 1600s pointing to citrus fruits as a key aid in preventing and curing the disease. [See Stephen R. Bown, SCURVY: How a Surgeon, a Mariner and a Gentleman Solved the Greatest Medical Mystery of the Age of Sail (New York: St. Martin’s Press, 2003).]

Physicians on land and at sea would later provide evidence in the mid-1700s that citrus or other fresh fruits and vegetables reduced the risk of scurvy, but this knowledge was not only ignored or resisted by those in the Navy, it was resisted by the mainstream European medical community who perpetrated a form of “strategy fatigue” by making a general understanding of the nature of disease their primary quest, being uninterested in “merely empirical” work aimed at curing a given disease. For example, the work in the 1730s of physician John Bachstrom in Holland pointing to fresh fruits and vegetables as the decisive cure for scurvy was dismissed by the medical community of his day, for he was “a mere empirick” in the eyes of his elite peers. [Kenneth J. Carpenter, The History of Scurvy and Vitamin C (Cambridge, UK: Cambridge University Press, 1988), pp. 44-45.]

The adoption of the innovation of citrus fruit in treating scurvy took more than compelling evidence. It took someone with powerful connections to champion the innovation. This man was the prominent Scottish physician, Sir Gilbert Blane, who was only 4 years old when a detailed study on the cure for scurvy was published by James Lind in 1753 – only to be ignored for decades. (To be accurate, the information from Lind and others was obscured by terrible confusion about physiology and disease, and continued to point to the dangers of various “airs” and climatic factors as key contributors to scurvy, obscuring the fact that it was a nutritional deficiency.) [See James Lind, A Treatise of the Scurvy. in Three Parts. Containing an Inquiry Into the Nature, Causes and Cure, of that Disease. Together with a Critical and Chronological View of What Has Been Published on the Subject, Edinburgh: Printed by Sands, Murray and Cochran for A Kincaid and A Donaldson. Portions of the original reproduced online by the James Lind Library. Also see Carpenter, op. cit., pp. 51-52.]

In London, Blane became the private physician to Lord Rodney and sailed with him to the West Indies in 1779. Blane’s efforts to keep sailors healthy were increasingly successful, and through his connections to Rodney and others naval leaders, Blane was able to give lectures to senior leaders and gain support for improved practices across the entire navy. Drawing upon past work and a further demonstration of his own, he would introduce compelling evidence to naval leaders that lime juice prevented scurvy, leading the Navy to adopt lime juice in its global operations beginning in 1795. [David Nash Ford, “Biographies: Sir Gilbert Blane (1749-1834),” Royal Berkshire History (Finchampstead, UK: Nash Ford Publishing, 2005).] For nearly two centuries, the British Navy had been closed to a safe, inexpensive innovation from outsiders that solved what may have been its most vexing and costly problem. The citrus “sales pitch” fell on deaf ears until someone with the right connections to senior management could deliver it. It’s a tragic lesson of the dangers of closed innovation, of organizational rigidity, of devaluing the work of innovators, of listening to the wrong voices, of “not invented here,” and the importance of delivering the story of an innovation to the right people, through those who have the right contacts. It doesn’t need to be this way, but it often is. Thousands of needless deaths over centuries: welcome to the fruits of innovation fatigue.

Incidentally, innovation-related lessons from scurvy continued long after 1795. Though citrus juice was adopted in the British Navy, the nature of the disease and the reason for the cure were still unknowns. Without careful efforts to preserve knowledge and best practices, erosion can quickly occur. Thus when the Royal Navy undertook arctic expeditions in the 19th century, the leaders took with them a belief that good hygiene, good morale, and regular exercise prevented scurvy. Not surprisingly, scurvy was a recurring problem in these voyages. In the 20th century, when Robert Scott trekked into the Antarctic, tainted canned food was believed to be a cause of scurvy. The connection between vitamin C and scurvy was not discovered until 1932. Likewise, we have seen many organizations lose best practices, healthy processes, and even technical capabilities and knowledge when efforts weren’t taken to preserve and pass on what they had.

(The above is based on an section of Conquering Innovation Fatigue, Chapter 10.)

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Monopolies vs. Health Care Innovation: What Happens When Incumbents Decide Who Gets to Compete?

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Monopolies can innovate, just like elephants can play tennis. The results usually just aren’t very elegant or successful. Competition, on the other hand, is famous for driving innovation. Even in state-owned monopolies, like NASA’s initial monopoly on space exploration in the US, it was competition between nations during the rush to outer space and then competition between suppliers of technology that inspired the hundreds of inventions and innovations that NASA can proudly boast. But without the incentive to do better and stay ahead of competitors, innovation is slow and clumsy. An elephant might occasionally connect with a tennis ball and score some points, but real success is unlikely.

That all seems pretty obvious to most people, but not to those who benefit from monopolies. Real monopolies do not arise from the success of a competing company like Apple or Google as they rise above competitors and increase market share. In a free market, the competitors are still there and can enter the battle as they wish. Real monopolies arise from the power of the State that prohibits or restricts competition to favor a protected entity. Real monopolies can result in huge profits for the players and great power for the politicians and bureaucrats controlling the field, but they tend to crush meaningful innovation, especially from small start-ups with bold new ideas. If you can keep the start-ups from every showing up in the marketplace, you have enshrined innovation fatigue. Sadly, that’s what is happening in the United States now in the health care sector.

As William Jasper reports, “Certificate Of Need” laws in over 30 states restrict market entry in medicine and healthcare as they protect overpriced hospitals and medical providers. The federal Department of Housing and Urban Development exercises authority over Certificates Of Need. According to Jasper:

Before a hospital, clinic, nursing home, or other healthcare facility can be built, a Certificate Of Need, a CON, must be obtained. Not only that, but in many jurisdictions, a facility must obtain a CON even to install new equipment, such as a CT scanner, MRI machine, a lithotripsy machine, or other important medical technology.

This system prevents new competitors from entering the market and rewards the current dominant players. It is a corrupt cartel system that prevents innovation and competition, denies consumers choices in healthcare, and guarantees ever-rising prices. It’s no surprise, then, that the big companies in the healthcare industrial complex and their Big Government allies support this system. Certificate Of Need laws are indeed a con game — and we are the victims.

If your state has this system, urge your leaders to repeal them and break the grip of incumbents over innovation in health care. The effect of a free market in innovation in healthcare is well illustrated in the fields of cosmetic surgery and Lasik eye surgery, areas not highly regulated, not covered by insurance and Medicare, and areas where advertizing of price and abundant, aggressive competition is allowed. In these fields, real prices have been declining while patient satisfaction (especially in the Lasik areas) is extremely high. When innovation and competition can prosper, good products and services can flourish and prices can actually come down.

Give innovation a chance. “Certificates of Need” do just the opposite. A better name would be “Certificates of Greed.”

Categories : government, health care
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Another Innovation Knifing: Cutting “Natural Products” Out of the Scope of Patentable Subject Matter

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One of the important new antibiotics discovered and developed by pharmaceutical companies in the past few years is Rifampicin and its relative Rifamycin. These potent antibiotics remain key tools in fighting off serious infection. Their story begins with a soil sample taken from a pine forest on the French Riviera in 1957 that was then studied in an Italian laboratory, where unusual antimicrobial properties were observed in a newly discovered bacterium.  eventually an unusual molecule produced by the bacterium was identified, isolated, mass produced–and, yes, patented.

Rifamycin was credited with conquering drug-resistant tuberculosis in the 1960s. These drugs are marvelous discoveries, important pharmaceutical inventions, and became the subject of multiple patents providing protection and incentives to the developers and improvers of this unique products.

Thank goodness these products were discovered and patented decades ago, because today the USPTO would probably reject any patent application out of hand using its newly fabricated and terribly damaging rules that rule out “natural products” as patentable subject matter. This is the result of what appears to be a politically motivated attack on the pharmaceutical industry by the US government, using a Supreme Court decision (Myriad Genetics) as the excuse, but twisting it to go beyond what the Supreme Court said. The political angle is that politicians want to “stick it” to the pharmaceutical industry and appear to be taking steps to lower the cost of drugs by limiting patent scope and other means. But the long-term effect will be reduced innovation and less progress in medication.

If a product is actually novel, useful, and non-obvious, the fact that it had origins of some kind somewhere in nature should not be a barrier to patentability. The fact that an unknown bacterium in some French soil existed in nature does not enable the public to understand and produce a powerful, pure antibiotic useful in treating many diseases. Those who discovered, tested, refined, and modified the compounds produced by the bacterium deserved and needed patent production. Without it, there would be lessened incentives to take on the burdens of discovery, testing and drug development. We would be less innovative, not more, without patents for novel materials with some kind of basis in nature. But today, such patents and such innovations are threatened. It’s another example of innovation fatigue driven by political agendas and political machinations.

If you think about it, every invention has some roots in nature. The protons, neutrons, and electrons used in every object or affected in every process come from nature. Are we sure that we need a vague and indefinite “natural products” exclusion beyond the more sensible previous criteria for patentability?




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An Eye on Innovation: Allergan

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Allergan (NYSE: AGN), the major multi-specialty pharmaceutical company with expertise in ophthalmology and beauty, has been on a tear in the stock market, driven by its bold approach to innovation. The market cap, now $25 billion, has roughly doubled in the past year. I heard CEO David Pyott speak to Jim Cramer on Mad Money last night and am impressed with the financial commitment to innovation. I am also impressed with the new product development work that is done in extending great products to new fields. For example, Botox® (Botulinum Toxin Type A), used so successfully for cosmetic surgery, also has potential to modify hyperactive bladders or juvenile cerebral palsy. Their expertise in neuroscience is also being applied to migraine headaches, where a promising product is in Stage 3 clinical trials. The Botox® approach to skin beauty is being enhanced with Juvederm® hyaluronic acid (HA) dermal filler formulation, a material that can be injected into the skin to fill some wrinkles. They are also addressing the challenge of obesity with their FDA-approved laproscopic band, a less invasive approach to bariatric treatment. In ophthalmology, one of their most profitable segments, a host of products treat eye conditions such as glaucoma or dry eye.

Allergan’s products are well suited for the needs of the aging baby boomer population and appear to be riding a wave of technical success well matched to a demographic wave. Many growth opportunities still exist, and with the heavy investment in innovation and research, Allergan appears poised to continue growing, something that is unusual for many large pharmaceutical companies these days.

The company began in 1950 when chemist Chemist Stanley Bly developed anti-allergy nose drops and got the help of his friend, Gavin S. Herbert Sr., who owned a pharmacy. Two years later, after listening to advice from a pharmacist about patient needs, they developed an eye drop with anti-histamine, the first such eye drop in the United State. Sales skyrocketed and Allergan became a major player in ophthalmology, which today makes up almost half of their business still.

Listening to market feedback and acting on clues and suggestions from knowledgeable people like a pharmacist allowed Allergan to quickly shift its focus and its product array in the early days to address an important unmet need. This led to eye products, not just nose drops, and the opportunity in ophthalmology that will continue to be huge for Allergan, now representing nearly 50% of sales, if they can keep an eye on innovation.

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Dr. Sangtae Kim on the Morgridge Institute

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Dr. Sangtae Kim, the visionary leader of the Morgridge Institute for Research that is the private arm of the Wisconsin Institutes for Discovery, discusses he Morgridge Institute in the video below beginning at about 4 minutes into the program. His comments are related to my previous Pixetell video presentation on the Wisconsin Institutes for Discovery and to my presentation in Singapore last year on the parallels between the innovation experiment in Singapore and that of the Wisconsin Institutes for Discovery. Thank, Dr. Kim!

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In Conquering Innovation Fatigue, we emphasize that many innovators are motivated by the desire to make a difference in the world rather than merely obtain personal profit. We also discuss the concept of innovation competitions as a great way to fuel innovation success and access new talent. We also emphasize the importance of collaboration across disciplines and organizational boundaries as the future of innovation success. All these concepts are nicely illustrated by an organization seeking to cure ALS, Lou Gherig’s disease. Prize4Life, Inc. ( makes an interesting case study of what can be achieved in the realm of altruistic innovation using collaborative models and innovation competitions.

Meghan Kallman, Marketing & Communications Manager of Prize4Life, Inc. in Cambridge, Massachusetts, kindly shared some information with me about their inspiring innovation efforts. Here is the information she provided:

I would like to share with you the case of Avichai Kremer, co-founder and CEO of Prize4Life, Inc. Then a student at Harvard Business School, Kremer discovered in 2004 that he had ALS (amyotrophic lateral sclerosis, or Lou Gehrig’s Disease).

Avichai Kremer, co-founder and CEO of Prize4Life, Inc.

Avichai Kremer, co-founder and CEO of Prize4Life, Inc.

A computer-science engineer and ex-captain in the Israeli army, he had planned to graduate, work as a manager in a hi-tech company, and raise a family. Those plans changed drastically when he was told he would have 2-5 years to live, and that the medical establishment could do nothing for him. Kremer’s business perspective sparked his interest in the economics of ALS therapies, and inspired him to use his Harvard training to work for a cure.

Little is known about what causes ALS and only a few companies develop ALS drugs, so Kremer and two of his Harvard colleagues queried scientists and industry executives about the gaps that have prevented researchers from finding a cure. Companies said that they needed some basic research tools to reduce the cost of the development, like a biomarker – a better way to track disease progression. So Kremer and his classmates began Prize4Life, Inc., a non-profit organization employing business theories to stimulate research, which announced in 2006 that they would give $1 million to anyone who could come up with such a biomarker. The ALS Biomarker Prize program recently awarded $100,000 in progress prizes, and the organization’s second prize, the Avi Kremer ALS Treatment Prize, hits its one-year anniversary in October 2009.

While prizes are the visible core of our results-oriented model, we are also conscious of the need to create a vibrant and supportive arena in which our participating teams can effectively compete. Prize4Life has thus created a series of innovative projects and partnerships, piggybacking on its groundbreaking prize model, to ensure that all competing teams equal opportunity to be successful.

As one example of such partnership: in June 2009, Prize4Life and the Alzheimer Research Forum announced the launch of a new ALS-focused internet portal known as the ALS Forum ( Initial reaction to the new web portal has been swift and positive. The site offers ALS researchers around the world a one-stop access point for cutting edge research news and unique web-based resources. We also have designed and developed a manual to help researchers design their animal trials, and are currently designing and developing a database of genes associated with ALS that we intend to make available to researchers.

About Prize4Life
Prize4Life was founded by a group of Harvard Business School students when one of them, Avi Kremer, was diagnosed with ALS at the age of 29. Prize4Life works to accelerate the discovery of a treatment and a cure for ALS by using powerful incentives to attract new people and ideas, and to leverage existing efforts and expertise in the ALS field. Among other program initiatives, the organization currently administers the ALS Biomarker Prize Challenge, the Avi Kremer ALS Treatment Prize, and the ALS Forum.


Meghan also shared with me an example of a successful outreach effort using the competition model. “We actually awarded $50,000 to a dermatologist who had never studied ALS before, and who was intrigued by the prize model, and who submitted a winning entry, which is a testament to the potential of the prize model itself.” For the complete press release with much additional information, see the press release, “Prize4Life Awards Prizes for ALS Biomarker Challenge to InnoCentive Solvers: Extends $1Million Challenge Seeking ALS Biomarker” (PDF).

Further examples of great collaboration can be seen in their press release, “Prize4Life and The Jackson Laboratory partner in fight against ALS
Non-profits join forces to provide researchers with new preclinical resources
” (PDF). This describes a partnership with The Jackson Laboratory (JAX®), the world’s leading provider of mouse models, to provide preclinical resources for ALS research. Together, Prize4Life and JAX® have prepared a comprehensive training manual to enable researchers to more effectively use the SOD1 mouse model in the fight against ALS.

Their website is

Want to Help?
If you would like to help, Meghan told me that there are many opportunities. “We always need donations and fundraisers (this is the link), but we also have folks who host events for us, who blog on our behalf (on their blogs or on ours), who reach out to scientists who may want to compete for our prizes, to follow us on Facebook and Twitter, to link to us on their sites, the list goes on! We have an exciting event coming up here in Boston, for those who are local–Boston’s pro lacrosse team will be featuring us at ‘Heroes Awareness Night’ at the Boston TD Garden on February 6, and donating a percentage of the proceeds to our efforts. If anyone is on the east coast and wants to attend, they should click here: Anyone interested can contact me directly, mkallman at prize4life dot org.

A great example of collaborative innovation in action, with bonus points for using innovation competitions and having altruistic goals. ALS is a terrible disease and needs more attention in the quest for cure.


The Long-Tail of Innovation: Customizing Health Care Based on Patient Genetics

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One of the hottest trends for modern innovation is customization of products and services to meet the unique needs of individuals. Classic examples of business model innovation based on customization include Dell computer, who developed a suite of patented supply chain advances to assist in rapidly delivering customized computers at low cost, or Netflix, whose supply chain and Internet-based services allow users to select from vast numbers of movies that could never be housed in a local brick and mortar store. Now IT-related businesses including eBay and hundreds of others are increasingly taking advantage of Internet tools, database systems, cookies and other ways of tracking customer preferences and patterns to provide customized offerings to appeal to the unique needs and wants of individuals.

The next frontier for innovation based on customization will be health care. Some think this is already happening now that health records can be electronic and advanced diagnostic tools and databases can be applied to meet patient needs, but in reality, much of health care is still based on old models of “one or two sizes fit all.” What is the right medication for a patient? In what dose? Body weight, age, and gender may be considered in writing a prescription, but there are many other factors that need to be considered, including genetics. Understanding the relationship between drugs and individual genetics represents an important frontier for innovation in medicine. Today I’d like to highlight one important example of successful research in this field.

Recently in Singapore, while speaking at an Innovation and Enterprise Week, I met keynote speaker Dr. Michael Hayden of the University of British Columbia’s Center for Molecular Medicine and Therapeutics. (Not the same Michael Hayden who was a director of the CIA.) Dr. Hayden was recently named Canada’s Researcher of the Year. In his speech, Dr. Hayden spoke of his quest to understand the mysteries of disease and to reveal their genetic roots to thereby develop better approaches to treatment for patients. One exciting breakthrough that he mentioned, arising from collaboration with others at UBC and beyond, is the discovery that the terrible side effect of deafness that strikes many cancer patients on chemotherapy can be predicted with DNA testing. The popular and highly effective drug, cisplatin, is the problem. By understanding the relationship to genetics, high-risk patients can be identified and alternate medications can be prescribed. Finding genetic links to adverse drug reactions is a major step forward toward treatments that really match the unique nature of each patient.

A week after my encounter with Dr. Hayden in Singapore, I was in Mexico City’s large international airport, standing in a line, when I overheard the man behind me telling someone about his clinical work with cancer patients, and the discovery that genetics played a role in determining whether the patient would be at risk for deafness. My curiosity was aroused, so I couldn’t resist the temptation to interrupt and ask the man if he was from the University of British Columbia by any chance. Yes, in fact, he was. This was Dr. Bruce Carleton, a peer of Dr. Michael Hayden whom Dr. Hayden had mentioned in Singapore. What a small world it can be when I pay attention and reach out to others! We discussed his work briefly and I expressed my excitement at what they are doing. Today he kindly sent me a copy of his recent publication on the cisplatin work, published in the prestigious journal Nature Genetics. The publication is “Genetic variants in TPMT and COMT are associated with hearing loss in children receiving cisplatin chemotherapy” by J.D. Colin,  Hagit Katzov-Eckert, Marie-Pierre Dubé, Beth Brooks, S. Rod Rassekh, Amina Barhdadi, Yassamin Feroz-Zada, Henk Visscher, Andrew M. K. Brown, Michael J. Rieder, Paul C Rogers, Michael S Phillips, Bruce C Carleton, Michael R. Hayden & the CPNDS Consortium, Nov. 2009. Here is the abstract:

Cisplatin is a widely used and effective chemotherapeutic agent, although its use is restricted by the high incidence of irreversible ototoxicity associated with it1. In children, cisplatin ototoxicity is a serious and pervasive problem, affecting more than 60% of those receiving cisplatin2–5 and compromising language and cognitive development. Candidate gene studies have previously reported associations of cisplatin ototoxicity with genetic variants in the genes encoding glutathione S-transferases and megalin6–8. We report association analyses for 220 drug-metabolism genes in genetic susceptibility to cisplatin-induced hearing loss in children. We genotyped 1,949 SNPs in these candidate genes in an initial cohort of 54 children treated in pediatric oncology units, with replication in a second cohort of 112 children recruited through a national surveillance network for adverse drug reactions in Canada. We identified genetic variants in TPMT (rs12201199, P value = 0.00022, OR = 17.0, 95% CI 2.3–125.9) and COMT (rs9332377, P value = 0.00018, OR = 5.5, 95% CI 1.9–15.9) associated with cisplatin-induced hearing loss in children.

Watch for genotyping of patients coupled with extensive research on genetics and drug performance to become a pillar for health care innovation in the future. Customization of care at many other levels can be expected as well, as long as incentives for innovation in health care remain healthy.

Congratulations to Drs. Carleton and Hayden and their partners for outstanding work that will drive further innovation in how patients are treated.

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Our Mission is the official blog for the new book, Conquering Innovation Fatigue. Here we provide supplementary innovation, news, tips, updates, and, when needed, a correction or two, to keep those who are using the big on the inside edge for innovation success.