How to Use Fixed Positions
My next two articles will be about a special characteristic of strategic positions called “holding power.” Holding power determines the“stickiness” or “slipperiness” of our positions. It describes how hard or easily we can move out of a position. We call sticky positions, those with a maximum of holding power, “fixed positions." Sticky, fixed positions are relatively stable. Slippery positions, those with a minimum of holding power, are called “sensitive positions.” We use these two benchmarks to compare opportunities. In this article, we are going to discuss the nature of sticky, fixed positions.
But first, we need to explain two concepts related to holding power. The first is the “substantiation” of a position. The second is competitive “landscapes” of “peaks” and “valleys” of preference."
All strategic positions exist first in the human mind. They are how we compare each other in our thinking. In our mental maps, individual positions are fuzzy. But they become more solid as we make choices based upon them. Our decisions solidify relationships in our personal, social, business, and legal networks. Once established, especially legally, these positions develop new forms of “holding power,” reflecting the added costs of changing them. However, to simplify matters, we will only discuss holding power in the fuzzy mental positions used to make decisions.
Our minds evolved to deal with the physical world, so we used worldly analogies to describe how our minds see things. We model our world as terrain with peaks and valleys in our mental landscapes. The peaks are what are important to us or others. The valleys as what we don’t care about. In this terrain, there are many mountains, that is, hierarchies on which we compare people and things. One mountain might be the people with whom we enjoy spending time. For those of us who have chosen well, our spouses sit on the top of that particular peak. Other mountains compare the relative value of things that we like to do. Again, if we choose well, our job sits at the peak of one such mountain. We use our time, effort, money, and so on to move up these mountains. Practical strategy offers ways to simplify these moves, making more of them successful. People reward us based upon how well we do moving up their mountains of preferences, not our own.
This terrain of peaks and valleys is constantly changing as we all adjust our priorities and interests over time. Our mental maps of the world change very slowly as a whole, but parts of them are much more fluid. The four types of competitive ground should be recognized in our mental maps because different types of ground change in different ways at different rates. How fast our mental maps change determines, in part, how “sticky” and “slippery” different positions can be.
When we evaluate potential opportunities, that is, looking for a move that will improve our position in the minds of others, we must consider the holding power of both our current positions and any future ones. If our current positions are “fixed,” that is, with an extreme amount of holding power, moving from them is dangerous and costly. Moving into fixed positions offers both benefits and challenges.
The Advantages of Fixed Positions
Fixed positions are powerful because they stick in our minds.
People closely identify us with our fixed positions. They “stick out” in people’s mental map of the territory. This makes them attractive. People gravitate toward them. Since mind-space is difficult to win, this stickiness is a great advantage, especially over time. The Coca-Cola brand is a good example of a sticky, fixed position at the peak of the soft drink mountain.
Fixed positions are easy to defend.
Since they are rewarded by others more than all surrounding positions, these positions are natural defense points. Fixed positions can be surrounded by Tilted Ground, where its “tilt” favors the local peak. This is even better than a barricaded position. Given enough time and resources, opponents can overcome barriers. They cannot wear down a fixed position because it is supported by a whole mountain on the competitive landscape. Mountains can be eroded over time but very slowly.
Fixed positions are improved by the growth of the mountain or growth down the mountain on which they rest.
In fixed positions, we improve our position by growing it rather than using it as a stepping stone to move to a better nearby position. Instead, we extend our existing position over time, using its fixed nature as an anchor point. One way that we can grow it is by growing the mountain on which it rests. For example, Coke initially benefited from the growth of the soft drink category. However, we can also grow it by extending it down the mountain. This is what Coke does: it brings out new product lines, like Coke Zero, to capture more of its mountain.
The Disadvantages of Fixed Positions
Fixed positions have so much holding power that we cannot move out of them without loss.
When we reach a local peak in the competitive landscape, all surrounding positions are worse. We must cross a valley to get to any other peak, even if nearby. When Coke brought out New Coke in 1985, their mistake was changing their anchor point, the basic Coke formula. This was the identity of the brand in people’s minds. Trying to change this formula was a dismal failure. Coke has brought out several successful Coke derivatives since, capturing more of their mountain, but they have maintained their anchor point.
Opponents will attempt to entice us out of a fixed position.
Since competitors cannot win a fixed position from us, but they will try to get us to abandon it. They will try to make us think that the grass is greener somewhere else. Pepsi did this to Coke with the “taste test” campaign, where, in blind comparisons, tasters preferred the sweeter taste of Pepsi. However, when we abandon fixed positions, we immediately run into problems, as New Coke demonstrated.
Changes in the competitive landscape can undermine fixed positions.
As we said, the landscape is dynamic. Mountains can melt away over time. We must give up our dominant position and cross a valley when this happens. Being the president of a company is a peak position. Still, when that company begins to fade away, it is better to move to a smaller, less prestigious position elsewhere. Captains don’t have to go down with their ship. Over my lifetime, many companies have made this transition. IBM when from a peak mainframe company to a service company. Canon went from a peak camera company to an office machine company. However, both companies went through valleys to find their new positions.
In evaluating new opportunities, we must recognize fixed positions before we are locked into them. We must know when we are in a fixed position before we try to move out of them. We can be locked in these sticky situations for a long time, perhaps forever. We can only move out of them at a cost. The best time to consider if we want a fixed position is before getting into them. There are many advantages to winning a fixed position, but we must understand what we are getting locked into. Leaving a fixed position is always costly.
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Next week’s article will be on Using Sensitive Positions. That article and the two articles after that will only be for paid subscribers or for those with trial subscriptions.