Karen breaks this down into three inter-related circles that look a lot like the graphic above. Imagine the circles as relaxation, balance, and energy and where the circles interconnect as the sweet spot. If the the rider has just the right mixture of the three circles the horse can melt to a stop, or stretch down and out, or show self carriage by the rider releasing the reins forward with no change of balance, or make a smooth transition up or down at any given moment. Effortlessly.
In previous posts I've touched on all three components. Relaxation comes from the NH groundwork foundation and carries over into the basic ridden work primarily from the rider's seat on a loose rein. Balance comes from alignment/straightness through easy yielding of the fore quarters/hindquarters and the basic alignment exercise. Energy comes from having the other two components, tuning the horse to the rider's energy, and then using very light aids to release or contain the energy.
The beauty of this way of looking at dressage is that there are built in quality control checks for the rider. Not sure if tension or relaxation is the problem? See if the horse will melt to a stop. If not, go back to the NH foundation exercises to work on the relaxation. Wondering if the horse is balanced and aligned? See if the horse can either stretch down and out or release the rein forward to check for basic self carriage. If either isn't correct, work on the alignment/balance exercises. Not sure if the horse has the right matching energy? Try a transition and see if it is immediate and of quality. If not, work on the energy exercises.
The concepts are no different from the dressage training scale of one thing leading to the next thing. I personally though, always feel like I get lost in the maze of the training scale and this concept of the sweet spot is a lot easier for me to mentally process while actually on the horse. I only have three concepts to work on. I have a checklist for each concept. I have simple exercise to improve each concept. The end result for me is a balanced, straight, forward horse ready to do real "dressage". I never really understood that these three things need to be in place BEFORE the real gymnasticizing of the horse takes place. Who knew?