Madison’s State Collection Service still standing tall in its industry

The following is the third in a series of three profiles on local winners of the 2014 Wisconsin Family Business of the Year Awards. Click here to read our feature on Automation Components, Inc. and here to read our feature on Michael F. Simon Builders. The awards are sponsored by Smith & Gesteland, First Business Bank, and Whyte Hirschboeck Dudek. For a list of past winners and more information on nomination criteria, click here.

You could say Tom Haag, CEO of Madison’s State Collection Service, cuts an imposing figure. The son of Swedish immigrant and company founder Hilding Haag, Tom Haag has what you might call a very Swede-like stature — well north of 6 feet and with the kind of bone structure that evokes Viking seafarer at least as much as it does captain of industry.

So back in the early ’70s, when State Collection Service was already well past its 20th year in business but nowhere near its current size, he probably could have intimidated a delinquent bill payer or two if he’d really wanted to.

“People have a preconceived notion of what a bill collector is and what they do, and we try to actually disprove that. … Essentially the approach is to help somebody resolve a debt, not to scare someone into paying the debt.” — Tom Haag, CEO, State Collection Service

In fact, one day — quite unintentionally — he did just that.

“We used to be in an office building downtown, and there were actually at the time three collection agencies in the same building, and the staff was quite a bit smaller — we had probably a dozen or 15 employees,” said Haag, whose company recently won a Wisconsin Family Business of the Year Grand Award in the large company category. “So when the staff went to lunch, somebody stayed back to answer the phone, and this particular day it was me who stayed back. Everybody else was gone, and a guy walks in and slams the door and he’s got a notice in his hand kind of crumpled up, and he said, ‘I want to talk to whoever sent this notice to me!’

“And of course I’m a pretty good-sized guy — at the time I guess I was 6’5” or 6’6” — and I walked around the corner and he kind of looked at me, and I looked at the notice and took it from him, and I realized it was from a collection agency about two floors farther up the building. So I said, ‘Wow, I’m sorry, sir, but you’ll have to go up about two more floors because you’ve got the wrong collection agency here.’ He was very red in the face and took the notice back and started to walk out and stopped at the door, turned around, and said, ‘Is there anybody up there as tall as you?’”

According to Haag, the two had a good laugh, and the tension was quickly diffused.

Today, State Collection Service has around 370 employees in four offices throughout the Midwest (including Milwaukee, Chicago, and Beloit), and Haag — and his company —are still standing tall. But in an imposing way? Well, intimidation and bullying simply aren’t good business practices, says Haag, even in the bill-collections business.

“I would characterize the collection business as being a very misunderstood business,” said Haag. “People have a preconceived notion of what a bill collector is and what they do, and we try to actually disprove that, if you will. Essentially the approach is to help somebody resolve a debt, not to scare someone into paying the debt.”

An ethical approach

When Hilding Haag founded State Collection Service in 1949 after several years in the industry, he stressed the importance of ethical business practices.

Indeed, the younger Haag still holds to his father’s old mantra, “You catch more bees with honey than with vinegar.”

Tom Haag has been with the company now for 50 years, was joined by his son-in-law Jim Warner in 2006, and is now grooming his son, Tim, who joined in 2009, for an expanded leadership role.

Being in business for 65 years, the company has seen a lot of changes. In the old days, before credit cards were prevalent, most merchants relied on bill collectors. Today, says Haag, the leading market is health care. And as everyone knows, that market is changing rapidly.

With those changes comes a certain amount of confusion, and as an organization whose role is to make things as clear as possible for bill payers, State Collection Service is poised to benefit.

“Obamacare is going to provide coverage for a lot more people, but at the same time it’s going to increase the deductibles and co-insurance that people owe on their health care debts, and that isn’t always clear to people,” said Haag. “They think, ‘I have insurance, and so that’s the end of it.’ Well, we have to work through that and make sure they understand what their responsibility is and help them find a way to get it resolved.”



Part of the goal, says Haag, is to leave people with a good — or at least a satisfied — feeling at the end of that process.

“Oh, absolutely,” said Haag. “Health care creditors, the last thing they want is for the patient or the responsible party to feel bad about the nature of the treatment or the service that they had, so they hold us to a high standard, and we certainly support that. … That’s not saying that we’ve never had a complaint, but even one complaint is one more than we want.”

Still growing

While the business is more than six decades old, much of its growth has come since 2000. It added a Beloit office in 2000; a Geneva, Ill., office in 2009; and a Milwaukee office in 2013. The company now serves clients in 22 states, and in 2013 alone it added 25 large clients and more than 100 employees.

That could be attributable to the company’s emphasis on health care collections, but to Haag, it’s a testament to the specialness of his family business.

“It was back then [in the 2000s] when it became clear to the public that we had something special here, that we had a different kind of an organization, a different way of handling things,” said Haag. “What we were offering was exactly what credit granters wanted to buy.”

Of course, part of the business’ success can be attributed to its emphasis on togetherness. Despite having 370 employees in four separate offices, there’s a focus on concerted charitable giving among the workforce. In the past, the company has supported The Wounded Warriors Project, The Salvation Army, the Children’s Service Society of Wisconsin, American Red Cross, Make-a-Wish Foundation, Second Harvest Foodbank, and March of Dimes, among others.

“We do a fair amount of that,” said Tim Haag. “That’s part of kind of the team spirit at the company.”

Tim Haag says the company also stresses having fun at work, which is vitally important in a call center environment.

“You have people expected to sit in a chair on a telephone in a cubicle for eight hours a day, you have a lot of competition, a lot of fun competition,” said Tim Haag. “Everything from giving away small gifts to large raffle prizes, but also to having managers come out and dressing up or doing pushups or doing anything they can to [lighten the mood].”

Indeed, that spirit of fun (and family togetherness) is evident in the father-son repartee that occurs during media interviews as well. When asked if Tim is being groomed day to day to take over a leadership role, Tom Haag chimes in:

“Yeah, but don’t tell him that.”

“I’m sitting right here,” says Tim.

Looks like that jocular spirit will survive at least into the next generation.

Click here to sign up for the free IB ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.