Balanced scorecard examples

The system runs a 420-bed referral hospital, a 140-bed community hospital and a 50-bed rural hospital, with net patient revenue of $950 million. Last year it lost $11 million on operations, a margin of -1.2%. Agency clinical staff cost $48 million, up from $14 million in 2019, because registered nurse turnover is 21% and 14% of nursing positions are vacant. Length of stay runs 17% above expected, so admitted patients wait a median 7.5 hours in the emergency department for a bed and 5.2% of arrivals leave without being seen. Sixty-six percent of inpatients say they would definitely recommend us.

• Nurse turnover drives agency spending, and agency spending is the largest single cause of the operating loss.
• Beds are full of patients who are medically ready to leave, which blocks the emergency department and turns away transfers the referral hospital is paid well for.
• Past scorecards tracked more than 60 measures with no stated link between them, so leaders managed their own numbers and the margin kept falling.

• Retaining nurses past their first year lets units close vacancies, which removes the need for agency staff and cuts the largest avoidable cost in the financial perspective.
• Stable unit teams run daily discharge rounds reliably, so patients leave by noon and length of stay falls toward the expected level.
• Shorter stays free inpatient beds, which cuts emergency department boarding, so fewer patients leave without being seen.
• Shorter waits and nurses who know their units raise the share of patients who would recommend us and lower readmissions.
• Freed beds are filled by transfers and elective cases we now turn away, adding revenue without adding fixed cost.
• Complete clinical documentation at discharge reduces first-pass denials, so revenue already earned is collected sooner.

• Set an agency staffing budget per unit and require executive approval above it
• Build an internal float pool of 60 nurses to cover leave and census peaks
• Fix the five denial reasons that make up 70% of denied dollars, starting with prior authorization
• Renegotiate the two commercial contracts that pay below the cost of care

• Put a provider in triage at the two larger emergency departments during peak hours
• Introduce hourly nurse rounding and bedside shift handover on every inpatient unit
• Call every heart failure, pneumonia and lung disease patient within 48 hours of discharge
• Book a follow-up appointment before discharge for every high-risk patient

• Set an expected discharge date within 24 hours of admission and review it at daily multidisciplinary rounds
• Open a system transfer and capacity center that places patients across all three hospitals
• Reserve beds at four skilled nursing facilities for patients waiting on placement
• Run weekend therapy, imaging and case management at weekday levels in the referral hospital

• Run a 12-month nurse residency with a paid preceptor for every new graduate
• Offer self-scheduling and a choice of 8 or 12 hour shifts on every unit
• Cap each nurse manager's span at 45 staff by adding assistant managers on the largest units
• Fund a clinical ladder and tuition support tied to a two-year service commitment

The bank holds $26 billion in loans and $29 billion in deposits, and earned $246 million last year: a return on tangible common equity of 8.2%, below its cost of capital. Net interest margin is 2.85% because funding has become expensive. Noninterest-bearing balances fell from 31% to 21% of deposits, and $2.6 billion is brokered. Only 38% of our 620,000 households use us as their primary bank, and 44% of commercial borrowers keep their operating accounts with us. The efficiency ratio is 66%: 71% of accounts are still opened in a branch, and a commercial loan takes 47 days to close.

• We lend to customers who bank elsewhere. Loan-only relationships earn a thin spread and leave us funding growth with brokered and rate-sensitive deposits.
• Cost is tied up in manual work: 240 branches handling routine transactions, paper-heavy loan closings, and nine audit and regulatory issues past their due date.
• Relationship managers leave at 16% a year, and each departure puts a book of roughly $90 million in loans and deposits at risk.

• Complete, verified customer records give bankers one view of each household and business, which makes a conversation about the whole relationship possible.
• Relationship managers who stay keep their clients' operating accounts. A book that changes hands loses about a fifth of its deposits within a year.
• Branch staff certified as universal bankers spend their time on advice and account opening as routine transactions move to digital channels.
• Digital account opening and faster loan closings remove the delays that send customers' everyday banking elsewhere.
• More primary households and operating accounts raise noninterest-bearing balances, which replace brokered funding and widen net interest margin.
• Fewer manual steps and fewer overlapping branches lower the efficiency ratio, and control issues closed on time remove remediation spending. Both lift return on tangible common equity.

• Let the $2.6 billion of brokered deposits run off as core deposits grow
• Consolidate 35 branches that sit within three miles of another and reinvest a third of the savings in digital channels
• Hold commercial real estate at or below 41% of loans and direct growth to commercial and industrial lending
• Price deposits by depth of relationship, not by product promotion

• Build direct deposit switching into account opening and the mobile app
• Require a treasury management proposal with every commercial credit approval above $1 million
• Measure relationship managers on deposits and fee income alongside loan growth
• Call every new household within 30 days to finish moving pay and regular payments

• Rebuild digital account opening so identity checks, funding and card issue finish in one session
• Move commercial loan documents and covenant tracking into one workflow from application to booking
• Give every open issue a named executive owner and review the list at the monthly risk committee
• Automate the 20 highest-volume back-office requests, starting with address changes and card disputes

• Run a two-year commercial banker development program that takes 30 analysts a year
• Certify branch staff in account opening, lending basics and digital servicing, with a pay step for each
• Appoint data owners for customer, account and collateral records, with the chief data officer publishing a monthly quality score
• Change relationship manager incentives so that they vest over three years

Annual recurring revenue is $82 million from 6,400 contractors, up 19% in a year, down from 34% two years ago. Net revenue retention is 98% and gross revenue retention 86%, so new sales mostly replace what leaves. Free cash flow margin is -9%. A quarter of churned revenue comes from customers in their first year, who take a median 74 days to go live. Availability was 99.82% over the last twelve months, with nine severity 1 incidents, six of them between June and August when contractors are busiest. Releases ship every two weeks and 18% need a rollback or hotfix. Voluntary attrition among our 190 engineers is 24%.

• Customers leave faster than they expand. Each point of gross retention lost is $820,000 of recurring revenue that sales must replace, at a customer acquisition payback of 26 months.
• Outages cluster in the summer peak, when a dispatcher who cannot open the schedule sends technicians out blind. Large two-week releases and a dispatch core that few engineers understand are the cause.
• The engineers who can fix this are the ones leaving. On-call rests on 22 people, who were paged out of hours an average of 11 times per on-call week last year.

• Paid, lighter on-call and a wider group who know the dispatch core cut engineer attrition, which keeps the people able to break the two-week release into daily deployments.
• Small daily deployments fail less often and are quicker to reverse, so severity 1 incidents become rarer and shorter and availability rises to 99.95%.
• A system that stays up from June to August removes the reason most often given for canceling, which lifts gross revenue retention.
• Standard configurations by trade and certified implementation staff cut go-live from 74 to 35 days, so fewer first-year customers leave before they have invoiced a job.
• Customers who are live and stable adopt payments and maintenance-plan billing, which moves net revenue retention above 100%.
• With higher retention, each dollar of sales spending adds to recurring revenue instead of replacing it, which is what turns free cash flow positive.

• Sell payments and maintenance-plan billing as add-on modules with usage tiers
• Move account managers' variable pay from new bookings to net retention of their book
• Cut cloud spending per customer by 25% with reserved capacity and by retiring the legacy reporting cluster
• Hold sales and marketing spending flat and shift 15% of it to customer marketing

• Publish a status page with live availability and a written review after every severity 1 incident
• Run a pre-season health check with the 800 largest customers each April
• Give every customer above $20,000 in annual contract value a named onboarding lead
• Call every new customer that has not invoiced a job by day 30

• Separate the dispatch core from billing and reporting so each can be deployed on its own
• Put every change behind a feature flag with automated canary checks and one-step rollback
• Load test at twice the previous July peak every spring
• Build standard configurations for heating, plumbing and electrical to cut specialist hours per go-live from 31 to 14

• Pay for on-call and give a day off after any night with more than two pages
• Rotate six engineers a quarter through the dispatch core team, each paired with a mentor
• Open a staff engineer track so senior people can progress without managing
• Certify implementation and support staff on payments and each trade configuration