KQ Article

State Bank & Trust had lots to celebrate in recent years. Deposits were up. Customer satisfaction levels were consistently high across its branches in North Dakota and Minnesota, and so was employee engagement.

In 2004, the bank reached $1 billion in assets for the first time, and bank management decided to do something special during its year-end celebration. In addition to the traditional food, entertainment and giveaways, all employees received $1,000 in cash at the end of the evening. Not a bad surprise — and the employee gifts for the next several year-end parties were equally exciting.

"The rewards continued to get bigger and better, but we weren't interested in falling into a routine where we had to materially outdo the year before," said Michael Solberg, president of State Bank & Trust. "So, we decided to extend the rewards to the people who are equally responsible for our success: those who live in the communities we serve."

INSPIRATION STRIKES
In late 2007, on a trip to visit family for the holidays, Solberg and his wife, Char, were mulling over ideas for the bank's upcoming Christmas party.

"I wonder if we could pull off the Oprah thing?" Char asked, recalling Oprah's "Pay It Forward" show. During that episode, each audience member received $1,000 in cash, but with one condition. Rather than spending it on themselves, they had to put it to good use in the community. Audience members also received a video camera for documenting their charities and sending in a tape to Oprah's producers within a week.

"The moment I heard the idea, I knew we had found our next program,' Michael Solberg said. "It tied in beautifully with the people-first culture we have been cultivating for decades. Management was instantly on board, and we announced our Pay It Forward program at our 2007 year-end party."

To make the announcement, the bank built a replica of Oprah's set and hired a spot-on Oprah Winfrey impersonator. State Bank & Trust employees were given $1,000 and a video camera, with six months to choose their charity and document the results. Highlights of the footage were shown in a 44-minute documentary at the 2008 year-end celebration.

The money went to a broad range of charities, and the funding extended well beyond that provided by State Bank & Trust alone. Of the $670,000 contributed, $150,000 of that came from the personal resources of bank employees and customers. "People really put their hearts into this, which is obvious when you see the moving stories in our documentary," Solberg said. "They lost themselves in all of the giving."

The Pay It Forward program also generated national news coverage — and increased business — for the bank. Letters and e-mails flooded in from people citing the program as the reason for moving their money from another bank to State Bank & Trust.

"Several companies have also visited with us to learn how they can adopt a similar program," Solberg said. "We're flattered by all the awareness it has generated."

PLAYING INTO ITS STRENGTHS
According to Solberg, the success of Pay It Forward had much to do with the program's compatibility with the bank's longstanding mission statement of Happy employees, happy customers. "We firmly believe that a bank will be profitable if you take good care of your staff, your customers and your community," Solberg said. "The Pay It Forward program has been perfect for bringing this belief system to life."

The program has also helped employees take a personal stake in the success of their bank. "Most banks have a steep organizational hierarchy, but Pay It Forward has definitely flattened ours out," Solberg said. "The grassroots nature of the program shows that we're all equally important members of the same team, and it has helped to position our leaders more as coaches than managers."

With so many families feeling the impact of the economic collapse, State Bank & Trust decided to repeat Pay It Forward during 2009. Only this time, in addition to receiving $1,000 to donate to charity, employees received another $200 to be spent on family and friends, as a means of stimulating the local economy.

"Banks are under so much scrutiny right now, and this program helps to remind people that a vast majority of banks are in business for the right reason," Solberg said. "We're pleased to be such an active member of the communities we serve, and in helping to restore this industry's good standing with the public."

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