#39 Power Progression, 7 Powers
In the previous post, we detailed how invention was the first step to establishing power.
In this post we answer the question - When can you reach the position of Power?
Helmer provides a framework for Power Progression i.e. when Power must be established by Power type. The framework clearly spells out sources of power available to a company based on the size of the business and how fast it is growing (note this is not be confused with product life cycle)
The three stages of establishing power:
Origination - Till the time the company clears the compelling value threshold
Take Off - Period of explosive growth
Stability - Growth has slowed to 30-40% (y-o-y in terms of units)
Sources of power available in each of the three stages:
Origination - Cornered resources, and countered positioning
Take Off - Scale economies, network economies, and switching costs
Stability - Process power, and branding
The decisive attainment of Power is linked to the establishment of appropriate barriers. Helmer provides guidance on when these barriers must be established:
Hysteresis: Stability
Collateral Damage: Origination
Fiat and Cost of Gaining Share: Take Off
Helmer highlights the importance of execution in the take-off stage in securing Power.