President and founder of PaleoWest, a heritage consulting firm that guides clients’ projects through regulatory challenges posed by prehistoric, historic, and paleontological resources.
By Liisa Andreassen Correspondent
After nearly 25 years of providing archaeology consulting services, including managing some of the largest and most complex archaeology projects in the western U.S., Motsinger founded PaleoWest (Phoenix, AZ). As the firm’s president, it’s his combination of scientific credentials, business acumen, and proven success in solution-oriented consulting that has guided PaleoWest’s mission and approach.
“I knew there was a market for an archaeology-only firm that lives, breathes, and bleeds problem solving rather than esoteric research,” Motsinger says. “So PaleoWest gestated in that kind of nourishment. It was born on January 1, 2006.”
A conversation with Tom Motsinger.
The Zweig Letter: Your website says, “We pride ourselves on being the most innovative team of problem-solvers in the business, leading to better products and more efficient services.” Can you provide a recent example of these problem-solving skills to illustrate?
Tom Motsinger: A good example is the Marana Center shopping mall between Tucson and Phoenix. The developer needed to meet a Christmas shopping season deadline for its anchor tenant. The problem was that they needed a federal permit and there was a giant, federally-regulated prehistoric village in the development area. Hundreds of pit houses, human burials, and a communal ball court all had to be professionally excavated. We came up with a plan to do the impossible in our line of work: Coordinate the review among several interested tribes, a federal agency, and two state agencies to get a year-long project done and approved in just three months. We hired what seemed like all the archaeologists and earth-moving machines in the Southwest; deployed a fully digital data-collection system; and submitted the report the day after fieldwork was completed. It was audacious and absurd, but we pulled it off. The client had their clearance early, and we even earned an early completion bonus from the client. That, there, is PaleoWest.
TZL: Diversity and inclusion are lacking. What steps are you taking to address the issue?
TM: Last year we put in place a “Diversity Task Force” of employees to really take a hard look at ourselves with respect to diversity. What we found is that we have some real challenges in developing and maintaining a diverse workforce. Although anthropologists study and celebrate the diversity of human culture, they are overwhelmingly white. And while women enter our industry at a clip that’s on par with men, we lose a lot of women to academic and federal agency positions, usually owing to the real strain that field archaeology puts on raising families. We’ve expanded our leave policies to give women a career path that is more family-centered and doesn’t require them to pause their careers.
With regard to minority inclusion, we realized that we can’t hire what’s not there. So, we sponsor a Native American scholarship to push young Native Americans through the anthropology program at my alma mater. We’re also just finalizing an African American scholarship program at a university in the Southeast to help diversify our industry from that direction. We hope to hire and train some of these scholarship recipients and challenge our colleagues at other firms to follow suit.
TZL: How has COVID-19 impacted your firm’s policy on telecommuting/working remotely?
TM: We were pretty lucky on this one. We had already developed a solid system of communication and running marketing and project work remotely. It’s at the core of our coast-to-coast collaboration among our offices. So, we didn’t need to develop a remote-work system from scratch.
Still, we need to do fieldwork in person. We wrote to the governors of our states and were fortunate to get nearly all our work classified as “essential,” keeping us afloat and able to bridge our core staff through the early days of the COVID-19 outbreak. With some pretty strict safety procedures in place, we’ve been able to go about our business very effectively.
TZL: How much time do you spend working “in the business” rather than “on the business?”
TM: I’ve never been the “Exalted Hero” type who needs to be at the center of every project and business decision. I spent all our money early on recruiting and training a solid leadership team. As far back as eight or more years ago, I started taking my hands off the wheel a little more each year. Now, I spend very little time on projects and not much more on day-to-day proposals. This leaves me in a great position to focus on our outward messaging, strategic planning, acquisitions, and high-end recruiting.
TZL: After 24 years in the business, what prompted you to form PaleoWest? What was the main impetus?
TM: I learned the business as I helped build an archaeology department in a multidisciplinary compliance firm for 15 years. I lost the “CEO sweepstakes,” and the job went to another colleague who wasn’t an archaeologist. Shortly after he got the top gig, he came into my office and said, “Tom, I don’t understand archaeology.” I replied, “Well, it’s 60 percent of our revenue and 70 percent of our business. I’ll just keep doing the understanding for you.” He decided, instead, to de-emphasize it, so we agreed on me leaving. I had six months of professional invisibility as I burned out my executive non-compete. All the while, I was plotting PaleoWest’s launch. I knew there was a market for an archaeology-only firm that lives, breathes, and bleeds problem solving rather than esoteric research. So PaleoWest gestated in that kind of nourishment. It was born on January 1, 2006.
TZL: What role does your family play in your career? Are work and family separate, or is there overlap?
TM: Well, I did it right by starting the business when I was single so I could go all in on the effort. Then, as Elvin Bishop sings it, “I fooled around and fell in love.” I married a terrific woman who was very successful in another industry. She decided to join my firm at the start of the Great Recession. It was a little nerve wracking, but she helped transition us into the safe harbors of federal contracting just when we needed it. She’s the only one of us with a business degree, and she’s still our chief administrative officer. My only daughter is a software engineer who has never had an interest in the business.
TZL: Artificial intelligence and machine learning are potential disruptors across all industries. Is your firm exploring how to incorporate these technologies into providing improved services for clients?
TM: Yes. The centerpiece of our project delivery system is an AR-like workflow. Data is collected digitally in the field and synched continuously into a cloud database. That database then learns to “write” our reports as fieldwork is proceeding. So, when our project director finishes a month of fieldwork, instead of having a month of writing in front of her, she has just a couple days of clean-up before the report is ready.
Besides getting reports to clients quicker than other firms can, we also minimize the under-employment of our best leaders by getting mired in tedious tasks.
TZL: Are you using the R&D tax credit? If so, how is it working for your firm? If not, why not?
TM: Yes, we got turned onto it by our CPA five years ago. We do much more R&D than other archaeology companies, as far as automating our project workflow and building back-end databases that improve our business efficiency. It really improved the game for us financially when we learned that we could take an annual tax credit for that kind of work. It’s one of those situations where I’m leery of the legislation as a citizen, but happy to take advantage of it as a business owner.
TZL: How do you handle a long-term principal who is resting on his or her laurels? What effect does a low-performing, entitled principal or department head have on firm morale?
TM: I hope that’s not me! We’re a meritocracy and I always impress on employees that we have no “Ivory Tower” positions, no tenure, and we’re all on soft money. We’ve driven some underperforming big dogs out of the firm, and I don’t recall ever regretting it. I like feeding the vegetables in our garden, not the weeds.
TZL: How often do you valuate your firm and what key metrics do you use in the process? Do you valuate using in-house staff or is it outsourced?
TM: We run an in-house valuation at the close-out of each quarter using Zweig Group’s Z-2 Formula. That score blends revenue, net profit, EBITDA, backlog, equity, and staff size. It always comes out more conservative for us than other metrics do, but we like to keep it that way.
TZL: To date, what’s been one of the firm’s greatest challenges and how was it solved?
TM: Cash has always been tricky. When I launched, I met with at least eight banks. None of them understood what an archaeology firm does. (“So, let me get this straight ... grandmothers hire you to look for dinosaurs in their backyards? I’m sorry, but our credit committee has asked that you leave immediately.”) We were fairly well capitalized with my savings, but had some early success in landing big, multi-state projects that were expensive to field, with payment 90 or more days off. I recall spreading my credit cards across my kitchen counter, deciding which ones to draw cash out of to make a few payroll cycles.
We went through a period with a factoring company, the kind that legally takes ownership of your accounts receivable, cuts out their fee, and sends you what’s left. That was expensive, but necessary for funding our growth. Eventually, banks warmed up to us when we had a few years of solid numbers under our belt.
We generally take a conservative approach to cash management, with the owners only getting paid after the staff is bonused and a large sum is set aside as retained earnings to fund our growth. Still, though, the cash monster always looms in the dark.
TZL: Ownership transition can be tricky, to say the least. What’s the key to ensuring a smooth passing of the baton? What’s the biggest pitfall to avoid?
TM: We’ve had our PaleoWest Transition Program in place since last year, and, so far, it’s going terrific. I’ve got seven of the top professionals in our industry taking over the firm from me over 10 years, plus a pipeline of younger buyers waiting in the wings as they develop their careers at PaleoWest. Creating a team of entrepreneurial types who are also collaborative is the real key. I’ve got colleagues much older than me who either can’t transition their firms or have tried, failed, and had to buy it back from employees who were the wrong types to own it in the first place.Click here to read this week's issue of The Zweig Letter!