Innovation Junkies Podcast

Ross DeVol on Innovation in the Heartland

The Jeffs chat with Ross DeVol, President & CEO of Heartland Forward. Check out what they have to say about: the role of university talent & technology commercialization in research & innovation, best innovation practices for applied & teaching universities, & how university leaders can begin workforce development & commercialization tech transfer growth.

Jeff Standridge: This is Jeff Standridge, and this is the Innovation Junkies podcast. If you want to drastically improve your business, learn proven growth strategies, and generate sustained results for your organization, you’ve come to the right place. Over the next half hour, we’re going to be sharing specific strategies, tactics, and tips that you can use to grow your business. No matter the size, no matter the industry, no matter the geography. We’ll be talking about everything from sales and marketing, to organizational, operational and leadership effectiveness, to innovation, digital transformation, and everything in between. Weekly, we’ll bring in a top mover and shaker, someone who’s done something unbelievable with his or her business, and we’ll dig deep. We’ll uncover the specific strategies, tactics, and tools they’ve used to help you achieve your business goals. Welcome to the Innovation Junkies podcast.

Hey guys, if you’re looking to put your business on the fast track to achieving sustained strategic growth, this episode is sponsored by the team at Innovation Junkie. To learn more about our strategic growth diagnostic go to Now let’s get on with the show.

Jeff Standridge: Hi guys. This is Jeff Standridge.

Jeff Amerine: And this is Jeff Amerine.

Jeff Standridge: Welcome to the Innovation Junkies podcast. Glad to have you with us today.

Jeff Amerine: We’re really lucky to have an amazing guest today, and I’m going to give you a little bit of background on Ross DeVol. He is the president and CEO of Heartland Forward. Heartland Forward’s goal is to promote regional innovation and entrepreneurial ecosystems that foster job creation, wage gains and economic growth in the American heartland. And they pursue a variety of different activities through independent data-driven research and action oriented convenings, like the Heartland summit, which was really a big deal here in Northwest Arkansas this past year, impactful recommendations on policy. They engage with all different members of the community, policymakers, philanthropy. And in addition, for about 20 years, Ross was the chief research officer at the Milken Institute. The Milken Institute did some really seminal work for Arkansas more than 20 years ago that set the stage for many of the things that are happening in the innovation entrepreneurial ecosystem in the state today. He has been ranked as one of the superstars in think tank scholars, and he’s just a fantastic guy that we’re so lucky to have with us today.

Jeff Standridge: Welcome Ross.

Ross DeVol: Well, thank you. My wife must’ve written that intro for you Jeff. That’s all I have to say. She has the best interest in believing that that’s true.

Jeff Amerine: It’s good to marry well, right? It’s good to marry well. No doubt.

Ross DeVol: It is. Or marry smart, at least.

Jeff Standridge: In my case, I married up, which is well and smart. Right?

Jeff Amerine: Well, Ross, give us a little bit more on Heartland Forward. I know you have a full plate of activity that you’re undertaking there.

Ross DeVol: Yeah. I thought maybe it’d be a good idea, just to give some context about how Heartland Forward came to be.

Jeff Amerine: That’d be great.

Ross DeVol: Because it didn’t really come out of the ozone. I think the idea formulated during 2016, during the presidential election campaigns and the clear divisiveness that was present in the country. I mean, it was present before that but probably Donald Trump running for president and the manner in which he did so really highlighted that. And I think members of the Walton family noticed that there was this divide occurring in the country, principally between the coasts and the center, depends how you want to define that. But the coastal areas of the country were experiencing rapid growth, very knowledge intensive technology-based economic development. You think of Silicon Valley, San Francisco, San Diego, Boston. Up and down the East coast, Raleigh-Durham.
And they had an idea about holding a convening that might try and bring attention to the Heartland. And certainly there were some challenges that the Heartland was facing, but there were some real strengths and knowledge and talent across youth are equally distributed. It’s not just inherit to people on the coast to have children that can learn how to do things. In fact, Gary Becker, Nobel prize winner in economics from university of Chicago was also an eminent fellow at the Milken Institute. And I got to know him very well for his work in human capital, which he won a Nobel prize for. The point being, he said to me once, “Ross, talent is equally distributed when it’s born.” So anyhow with that the idea around what became the Heartland summit formed, which was a convening to draw attention to the Heartland, bring people here, display that there actually are some pretty good ideas here.
There’s talent. There’s academic talent, there’s entrepreneurial talent, all kinds of talent. Then there was a further conversation around, did it make sense to consider starting a think and do tank that really focused on trying to improve economic performance here in the center of the country, that would show some sustainability, some concrete nature to this effort. That’s when members of the Walton family reached out to me and I initially came in as a Walton fellow, but I just thought it was such a compelling idea. I grew up outside of Columbus, Ohio. I consider myself a Heartland person. My first job out of graduate school was with the Union Pacific Railroad in Omaha, Nebraska. Although I lived most of my professional career on the East coast, principally in Philadelphia, where I worked at Wharton, also worked for CSX, a railroad in Baltimore and then spent 20 years in Los Angeles as chief research officer.
And I just thought it was such a compelling idea, that even though I love my job at the Milken Institute, it just was an opportunity to start something that was really necessary. Fortunately for both myself and maybe for members of the family, my wife’s parents were high school sweethearts from North Little Rock, Arkansas. So when I came home after this initial call, and I envision it would have been different if I would have married someone who was from Southern California, maybe born and raised there. And I said, “Honey, I got a call from a member of the Walton family today and there might be an opportunity in Arkansas.” It might’ve been shut down because of the negative perceptions, but it wasn’t. So I was very fortunate. That’s basically how Heartland Forward came into existence. We formally launched in October 2019 just before the pandemic hit. We’ve scaled up to eight employees and we have about six fellows and senior fellows at this point. We’re just starting to get our programs underway. We’ve been focused principally on research.

Jeff Standridge: Very good. Very good. What do you see the long-term vision for Heartland Forward in terms of impact and what you’re really looking to… The outcomes you’re looking to produce?

Ross DeVol: Well, I firmly believe that if you’re going to be able to make policy recommendations, it needs to be based on a solid foundation. So that’s why research is critical. Obviously I’ve been in this field, regional innovation ecosystems, technology-based economic growth for many years, but Heartland Forward needs to develop expertise in the research competencies in a very applied manner. All of our research is applied, it’s around our programs, our pillars, innovation and entrepreneurship, human capital workforce, health, disparities, and wellbeing. Also regional competitiveness, tax rates, business friendliness, all this kind of things. The business climate basically overall, and then some sub categories around that. So we come at it from establishing credibility. There’s a number of ways you do that. You conduct research that people recognize and feel that your policy recommendations can be implemented. It’s also your peers recognizing the work that you’re doing in the think tank world.
Such things as last year, after we released… Young firms and regional economic growth was a major study in the importance of entrepreneurship around the country. The Economist Magazine had a piece on it, as well as the Wall Street Journal. And this week actually on Wednesday, the New York Times ran a story about how the Biden administration’s programs might have a greater focus on trying to improve the center of the country in terms of its research and innovation and entrepreneurship. So we’re just now getting to the point of launching our programs, where we actually are on the ground, trying to work with people to improve the building blocks, to accomplish those things.

Jeff Standridge: Very good.

Jeff Amerine: Follow up question with some of that, and we’ve had numerous conversations about this, but it seems that central to your thinking is the fact that you have to have a very robust and engaged university in the center of the ecosystem around which these innovation, entrepreneurial clusters and activities can be built. Can you talk a little bit more about the role and importance of the university talent, university technology commercialization and what part that plays?

Ross DeVol: Yes Jeff, glad to do so. I guess I came upon this going back to my days at Wharton, when I was looking at what were the top metropolitan areas in terms of economic growth, whether you want to define that as job growth, real GDP, wage gains. And I really noticed that it was principally in areas that have technology development that were tied into universities that were heavily engaged in not only creating human capital, transferring it to the private sector, but also involved in the commercialization tech transfer entrepreneurship space. So when I went to the Milken Institute, I attempted to document these things in showing how basically, where do these technology clusters form and how do they grow? And when you look at it, it’s no coincidence that Stanford was based in Silicon Valley, Palo Alto. You look at university of California, San Diego, I can look at MIT.
I can look at Harvard in the Boston, Cambridge area. The research triangle, NC State, North Carolina, Duke. You go down to Austin, you look at the university of Texas, Austin. University of Michigan in Ann Arbor, and you begin to see a pattern. So what I tried to do was to demonstrate which universities were not only the top at research and how you measure that, you know, patents and paper citations in referee journals, but also looking at some of the metrics on moving that to the market. So I wrote a study called Mind to Market many years ago that looked at this and you can clearly see that those universities that have been engaged with the business community, supporting entrepreneurship, supporting faculty, administrators, and students in licensing, starting their own companies, that’s really where these leading technology clusters started. They scaled up and have really reached the proportions that today are largely determining our economic fate.

Jeff Standridge: Very good. Guys we’re-

Ross DeVol: I guess the other point to that would be where you have universities that are… R1 universities, basically. Top research universities, that haven’t developed a culture to try and support entrepreneurship and moving things to the private sector. One of your key engines for economic growth is not firing. And so there’s a lot of opportunity to engage universities that are late to come to this game. Maybe they dip their toes in the water, but there hasn’t been a firm commitment. It really requires a culture that understands and supports that that’s the mission. One of the key pillars of a research university to transfer knowledge, not only in their graduates, but the intellectual property that can be applied in the business world to scale up, to create new industries and really lead to dramatic employment gains.

Jeff Standridge: A quick question on that. Have you seen any difference in the outcomes? You talk about the universities that are late to the game, perhaps they’re not formally recognized as a research institution and most of the research that they do is at an applied level. Have you seen any examples of some of these kind of applied research institutions or these teaching institutions really getting in the game and any maybe best practices there or shining stars so to speak?

Ross DeVol: That’s an excellent question. It really depends upon the research competencies of various universities. So if you’re heavily in biotech, medical devices, scientific research, there’s different processes than it would be at a university that specializes more in software development or another area. So there’s differences, but there are some commonalities. The first thing is you have to have a leadership that’s either at the presidential level, the board of regents or a chancellor’s level that sees that commercialization and tech transfer is part of the mission of the university. And I’ll give you a great example, not to cast dispersions but I lived in Los Angeles for 20 years. UCLA, a great research institution. The second in receiving NIH funds after Johns Hopkins in Baltimore. But when you looked at the commercialization outcomes, new companies started, royalties generated from licensing income, a lot of different ways to measure that UCLA didn’t do as well.
So when we first did those benchmarks, it was around 2007, 2008. And within a system it was very entrepreneurial, but you had a series of chancellors at the university of California, Los Angeles, UCLA, that were never really fully committed to commercialization and tech transfer. And so there’s kind of a separation of church and state. It was the idea that if you really work closely with companies, that somehow the quality of your research was tainted. It’s kind of hard for me to describe that, but that’s kind of the thinking, and that study actually led to many former alumni kind of leading the effort to bring in a new chancellor at UCLA that really saw commercialization, entrepreneurship, tech transfer as part of the mission. And that brought in Gene Block, who had been very successful as an academic entrepreneur, to be the chancellor. And over a course of about seven to eight years, he took UCLA from kind of being in the middle of the pack in terms of startups and businesses, to leading the country in new firms based on intellectual property coming in from UCLA.
So it’s an example of how leadership that’s committed can change the culture. I mean, I could go through and looking at Purdue, when Mitch Daniels went there. I mean, Purdue, a great engineering college, probably one of the top four or five in the nation. Lots of patents, but not much in terms of commercialization outcomes. And when Mitch Daniels left as being governor and became the president of Purdue, he said, “Tell me what I need to do to improve this and change the culture.” He actually told me about one time when he was still governor, he escaped his security guards, you know, the protocol and rode his motorcycle up to West Lafayette and kind of went around campus. Didn’t really tell anybody who he was, wandered around, talked to students, talked to faculty and really got a sense of what they were looking for.
And I mean, one of the things Purdue did is actually started a fund that invested in Purdue IP, but they did it outside of the university system so that it wouldn’t be subject to the same constraints they’re typically faced. A number of stories like that, Carnegie Mellon, another great example of a private university, but one that was a leader in computers and IT systems technology that initially wasn’t involved… Well, I should say it’s not as engaged and committed to commercialization. That changed dramatically in Pittsburgh and that combined with University of Pittsburgh and in the life sciences and medical fields, now Pittsburgh has a dynamic duo in terms of commercialization and tech transfer, and it’s really transformed that whole economy of Pittsburgh that was heavily dependent on steel and smokestack industries. And now it’s a thriving high-tech center.

Jeff Amerine: Hey folks, we’ll be right back with the episode. But first we want to tell you about a limited opportunity to take advantage of our strategic growth diagnostic. For a short time only, we’re offering a free strategy call to see whether or not our unique diagnostic tool is right for you. Go to to learn more.

Jeff Standridge: I love that example of Purdue and them investing in technology with their fund outside the system. Jeff and I and our other colleagues are working with a large children’s hospital, one of the largest in the Heartland, and we’re helping them do just that and it started with a leader of the Research Institute saying we really need to change the culture of the enterprise toward more of a commercialization culture. We’ve been working with them now for about nine months, maybe a little longer, close to a year now, and really beginning to have some of those same conversations about, okay, we’re increasing the amount of potential patent flow. We’re increasing the amount of exposure that we’re giving to these researchers and these clinicians around ideas that could transform the way care is delivered or the way therapeutics, diagnostics, what have you, and taking them through the commercialization process to the point now that we’re beginning to have conversations about, is there an opportunity for a fund here? So I’m going to go do some research on the Purdue example. It really, really captured my interest. That’s fantastic.

Jeff Amerine: And Ross I want to take you down a little bit of a timely, but a different path. And I’d really be interested in your take on how the Heartland plays a role in this. There’s lots and lots of conversations about the fact that we’ve got lots of single point failures in the semiconductor supply chain where we’re extremely reliant on Asian sources. And in fact, I think the reason why you pay 350 bucks a day for a rental car in Hawaii is they can’t get the cars from the major automobile manufacturers and that stems back to dumping a bunch of semiconductors in the sea when a container ship was overloaded. But it’s characteristic. That’s just one example of a characteristic problem. My question is, given that we do have large US-based and also foreign automobile manufacturers in the Heartland of the US and we do have this issue with semiconductors. What role do you see the Heartland playing in some of that vertical integration that a lot of us hope to see to where there’s US produced semiconductors rather than being reliant on foreign sources?

Ross DeVol: Well, that’s a great question, Jeff. We did a report looking at reshoring America and the Heartland’s potential role on that. One of the things I tried to do in that study we undertook was to make an honest assessment of the potential for reshoring, bringing some manufacturing activity back from China and Asia, that it was going to be high value added activity, where we were going to be successful. Labor-intensive manufacturing was still not going to come back to the US, the textiles and apparel unlikely to come back. But it seems to me… We’re still the leader in R and D in electronic component semiconductors. Clearly that leadership has faded somewhat, but we’re no longer the leader in producing semiconductors and electronic components, probably 10 to 12% of global production in the US today. So, from my opinion, if you look at the data, I think companies underestimated the challenges in producing the supply chains in China and how globally integrated they became.
Taiwan has been a powerhouse in terms of producing more semiconductors, but it seems to me that’s a real opportunity for the Heartland. We have the auto industry here where you have the demand for the semiconductor’s electronic components and given the rising wages and costs and distribution supply chain problems in China, in Asia, I think there is an opportunity to establish more manufacturing plants for semiconductor’s electronic components here in the Heartland. Of course, Austin has been a leader in the area for a number of years, but I think there are going to be more opportunities and as we move to a greater share of electric vehicles, I think that’s going to be critical to bringing new middle wage manufacturing jobs to the Heartland. Let’s face it. You’re not going to locate a semiconductor plant in California.
I remember speaking to the former CEO of Intel, this would have been in 1999 and he said, “Ross, we’re never going to build another plant in California” and guess what? They haven’t. And there was a reason for that. Costs are high, regulatory burdens, all this kind of factors. They’ve been building facilities in Arizona, in Oregon, for example, but I think there really is a potential play here for the Heartland in that sector, but first of all, we need national enabling legislation to help with that. And then we need state level leadership to recognize it’s an opportunity in working with those sectors. So I think there is a real opportunity for the Heartland to establish a primary role in the semiconductor industry.

Jeff Amerine: That’s very interesting. I really hope you’re you’re right, and that the people in a position to influence policy and the enabling legislation to make that happen do so. I think there’s bipartisan support. Everybody has realized that it’s a national security related issue. And in a small way, we see some bright spots even locally with companies like Ozark, which is becoming a top 10 rated company in harsh environment electronics that are going to be necessary for things like hypersonic aircraft and engine controls, deep well geothermal drilling, which is a really interesting energy source, and in a variety of other applications in space and commercial space. So there’s even some bright spots locally. They’re making the transition from an R and D shop to one that’s going to do high value, relatively low volume production, but we need more of that. And I think we’ve got a chance with some of the bright people that we have in materials and semi’s and silicon carbide locally to make that an interesting cluster that can serve a number of different markets. So I really hope you’re right, and that people see the need.

Jeff Standridge: Well, it really also highlights the need for talent development, right? Talent development and workforce development, so that we can take advantage, or we can execute on that potential play with a talented workforce who can step into those roles.

Ross DeVol: Yeah. So the research elements absolutely critical, but if you’re conducting research without the close ties to commercialization or commitment to it at universities, you’re not realizing the full potential of that research. So that’s why kind of admission awareness commitment to being engaged is so critical. And then you get into the talent issues. We need to look at, it’s not just four year degrees in STEM, but think of working on the semiconductor plant, that plant where what I would call career technical education is absolutely essential. Looking at the community colleges and making sure you’re developing the training programs and having the companies that are in that sector work closely with the community colleges in developing the curriculum and constantly updating it so the graduates have an opportunity to step right into a job. Apprenticeships during that process are very critical. So it’s both the research university perspective, but also the talent creation. Sure, you need that high end talent, people with masters and PhDs in engineering biomedical area, but you also need what I would call middle-class jobs, if you will, where you don’t have to go to get a four-year degree.
I’m going to get my soap box. So we basically made vocational education, a dirty word. It’s two words, obviously but… A dirty phrase. Back in the seventies where we told parents, don’t let your children go up to vocational education. And I think we made a huge mistake because the fact of the matter is in many fields, whether it’s welding, precision metal cutting equipment, whatever it might be, laser guided machine technology, you don’t need to have a bachelor’s degree to be successful at that. You need to have people that are trained and you can earn 80, a hundred thousand dollars within five years after graduating. Whereas you can go get a four-year degree in the humanities, look nothing wrong with humanities, right? And earn $30,000. So we have this disconnect and I think we need to reinvigorate today what we would call career technical education and career pathways for people that want to get into these fields, have a job that provides a middle class income, but don’t necessarily need to get a four-year degree.

Jeff Standridge: Well, I hope there’s a room on that soap box for me to stand there with you, because you were absolutely preaching a sermon that I’ve been preaching. In fact, I told then candidate Hutchison back when he was running for governor, that I felt like we had a branding problem, an education branding problem that every parent wants every child to go to a four-year institution. And they rack up tons of debt and many dropout within, or soon after two years. And they are not prepared for the workforce. And I think that’s probably one of the reasons that I now sit on the career education and workforce development board for the state of Arkansas is, that conversation. But I couldn’t agree with you more. You know, I’ve got a niece for instance, who I’m so proud of her. She decided to go to a two year school and get her LPN and start working and then possibly move to an RN.
And, and what have you. Those are badly needed jobs that we have in our state, some 50,000 of which we can’t fill because in the state of Arkansas, because there are not enough people to actually do that. And one of the innovations I think, of our Arkansas state chamber has been the initiative called Be Pro, Be Proud, where they have a giant semi with a lot of these job opportunity expos or exhibits, if you will, that they will take around the state to help educate parents, kids, teachers, and administrators, that it is okay to pursue a career in a skilled trade, to be an entrepreneur or to do something that doesn’t require a four-year degree. So love the soap box. And I stand right there with you.

Jeff Amerine: Well, and to add a comment to that, the messaging to that other 65% of the high school graduates that are not college bound has been incredibly poor for the last 25 years. That somehow they’re a failure or they’re not achieving, but yeah, it’s the other 65%. It seems like craziness to me that we haven’t emphasized all these other professional pathways that don’t involve four year, and I think people are starting to wake up to it. There’s some very well-recognized voices like Mike Rowe and others that are saying this kind of stuff all the time, that have national media access and that people will actually listen to. So it’s really kind of a key point.

Ross DeVol: It is. It is encouraging to see the Biden ministration propose that community college could be paid for. But I mean, if I were to provide some constructive criticism and feedback, it would be, I would only make public funding for a two year degree if it was in a high demand occupation where there was occupational opportunity and I would really target those fields first. There’s a difference between going into an accredited program that can lead to direct employment, that pays a middle-class job as opposed to programs that don’t necessarily lead to that. So I would say that it needs to be more targeted and focused and hopefully somebody in administration will listen.

Jeff Standridge: I’m hoping and expecting that this episode will make it into the hands of a number and we’re going to do some work to encourage that. It makes it into the listening stack of a number of Heartland university leaders, health system CEOs, and perhaps research institution leaders. Let’s talk about, from a commercialization tech transfer and a talent development perspective, let’s give them some nuggets. What would you say to those university leaders around if they’re not actively involved or maybe they’re not as productive as they’d like in the workforce development area or in the commercialization tech transfer? What guidance would you give them to really get started in that regard?

Ross DeVol: Well, here’s how to get the attention of a chancellor or president, right? It’s around donations. And what do I mean by that? I’ve done a lot of studies looking at how do you measure commercialization tech transfer success, and those are traditional things we discuss, royalties, startup companies, a whole range of those factors, kind of the outlets coming out the backdoor. But I would say the greatest measure of commercialization technology transfer success is to look at donations by former students and alumni. And I say students because I would argue the biggest missing piece of that is, look at Stanford. Stanford’s former students, not all graduates, right? Cause they left to start companies. They saw an opportunity. They donate millions of dollars back to institutions. And I would argue that truly is commercialization’s returns that don’t show up necessarily directly in a royalty income or other milestone types of payments.
So that’ll get the attention of board of Regents, board of trustees and university presidents. And also, I think you’re going to start seeing tracking graduation rates. So acceptance rates, graduation rates, and making sure that more students actually get through the system as opposed to going for a couple of years and not necessarily graduating. So graduation rates are going to become much more important in kind of the evaluation of the success of universities. And if you want to be successful and drive economic growth as a university, part of that ecosystem, you have to be creating the talent that companies require and listen to them, how to adjust curriculum. I can’t tell you how many times I’ve heard computer science programs that are creating the history of computer technology and not the latest programming skeleton using languages of the day. If you want to engage with companies and get them to support your research, you want to make sure your curriculum is training graduates that they can hire.
Yeah. Quick story about UCLA, like kind of behind the scenes. Gordon Binder was one of the two founders of Amgen, by market cap, the largest biotech company in the country, in the world for that matter. That was based principally on UCLA drived IP. They wanted to start the company right there in Westwood next to UCLA, but the chancellor at that time didn’t want some company right there on the university campus or right next door to it because, you know, that’s separation of church and state. Which actually led to Amgen going up in what was then the middle of nowhere, Thousand Oaks, California, about 30 miles Northwest of Westwood where UCLA was located to what started Amgen and it still based there, and actually grew to be a large enterprise. But many times I’ve talked to leaders, what could have been? What if Amgen were right there, was started next door to the UCLA campus. It could have been very easily what San Diego became, [inaudible 00:36:55] area, perhaps even more. But there was that kind of pushing Amgen out, away from the university and there were never really strong links. So it’s just an example of how a decision that was made many years ago effected the evolution of entire industry.

Jeff Standridge: Yep, absolutely. Very good. Well, ladies and gentlemen, we have with us Ross Devol today, Ross is the CEO of Heartland Forward, an innovator and researcher at heart. And we’re very pleased to have you with us today and to help us provide some guidance and shed some light on how the Heartland can take advantage of the opportunities that lie before us.

Jeff Amerine: Ross. Thanks for coming on. It’s been fantastic to have you.

Ross DeVol: Well, I appreciate the opportunity. Always enjoy the podcast where I get an opportunity to state a paragraph occasionally and not two sound bites.

Jeff Standridge: Thank you so much. Great to have you guys with us and we’ll see you on the next episode.

Jeff Amerine: Hey listeners, this is Jeff Amerine. We want to thank you for tuning in. We sincerely appreciate your time. If you’re enjoying the Innovation Junkies podcast, please do us a huge favor. Click the subscribe button right now and leave us a review. It would mean the world to both of us. And don’t forget to share us on social media.

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