A Large Debt Collection Agency Returns to its Family Roots

“I’ve heard it said before that our industry isn’t rocket science, but it isn’t something that you can just step in and understand from the jump,” says John Erickson, the new President/CEO of I.C. System, one of the leading outsourced debt collection providers operating today with over 30,000 clients spread over a multitude of industries. “I think it’s something you have to be exposed to really understand what it is.”

Erickson replaces Ken Rapp, who served as President/CEO for the past ten years despite initially announcing his departure internally five years ago. The interim period allowed the privately owned I.C. System to develop a comprehensive succession strategy to coincide with major investments in technology and analytics in preparation for the transition. Erickson’s promotion was announced November 18th from the company’s headquarters in St. Paul, Minn (“I.C. System President and CEO Ken Rapp Retires,” Nov. 19).

“I feel ready because of the work we’ve done over the last five years,” Erickson says, although quick to note how the intense training and preparation wasn’t always easy. “I think Ken intentionally put me in positions that would stretch me a little bit,” he says. Erickson held numerous positions over the past 15 years with the company, ending as Chief Operating Officer most recently.

“I felt over my head over some of the time over the past five years,” he says candidly, “but if you surround yourself with good people and you learn the business that way, then it never really is as daunting or challenging as it may seem at first blush.”

Despite the increased workload and steep learning curves, the immense responsibly of the position is certainly not lost on Erickson, who, at 37-years old, is only the fifth president in the company’s 72-year history.

“You’re the guy in charge and you start to feel the gravity of the responsibility,” he says. “I look at myself as responsible for I.C. System, a steward of the business and all our employees, and if you start thinking about it that way it’s a pretty awesome responsibility.”

The transition and formal announcement also highlight a uniquely human element to an often unfairly maligned industry, as both Rapp and Erickson note. While training strategies and staff development continue to prove invaluable across the ARM industry, the counseling exemplified at I.C. System during the transition speaks to the very founding of the company in 1938.

“John’s grandmother was my mentor back in the 70s and 80s,” says the 63-year old Rapp.  “I tried to learn as much as I could from her and got the savvy to start my own company.”

Rapp worked at I.C. System from 1970-1985 before founding DynaMark, a data processing firm in 1985. He eventually sold the enterprise to Fair, Issac and returned to I.C. System in 2000 after being recruited by the Erickson family.

Erickson Jr. says the opportunity to run the third generation of I.C. System has always been a personal dream and the hand-off from Rapp couldn’t be more fitting. “[It] was founded by my grandmother, one of my heroes,” he says, “and just watching her as a child, then seeing my father run the business for a number of years, it’s just always been something I wanted to do.”

“First of all John is a great guy,” says Rapp when asked how his successor might handle some of the challenges in the current economic climate. “He’s a good, level headed young man. He’s been in the industry a long time, basically all his life.”

Erickson is inheriting a company with minimal to no growth over the past three years after a near tripling since 2000, according to Rapp. “We retreated the last couple of years a bit, mostly due to the credit card grantors pulling some business in-house because they were overstaffed,” he says.

The situation is echoed across the board for I.C. System’s competitors, but Rapps says “most of our other markets have been pretty steady.”

The current recession has not affected the company’s performance for clients, as it was cited as a top 20 outsource provider in Financial Services from Black Book of Outsources last year. The company was also named a leader in critical litigation defense by panel speakers at the 18th Annual Collection & Credit Risk Conference in Las Vegas.

“I think the industry has become such an easy target out there that we more than ever need responsible, professional organizations, towing the line as it relates to the law and regulation,” Erickson says, of both the industry’s public reputation as well as his company’s in-house strategy. “I think treating consumers and individuals with respect and dignity is as important as ever.”