The basis for any NewCode transformation is the establishment of a Consensual Enterprise Project (CEP), where human and financial Capital agree on the target future of the enterprise and commit themselves accordingly.
The CEP contains all components usually associated with strategic and business planning in terms of perimeter, capex, sales and non personal costs projections. It also includes projections for the compensation of both financial and human capital, e.g. the way added value will be shared between human and financial capital should the Enterprise perform according to the CEP.
The CEP is also a major input for the sizing and design of the Capital Structure, e.g. the Capital Structure has to provide the capital resources needed by the CEP, and conversely CEP metrics have to allow the service of the Capital Structure and its refinancing at maturity.
The CEP provides the base case for the design of the Value Sharing Mechanism, and also for the Downside Management Mechanism which will come into play should the enterprise perform significantly below the base case.
The management team is in charge of drafting the CEP. Governance is in charge of achieving a consensus on the CEP, between management, employee representatives and investors.