The Basic Concept

Take an Fmaj7 chord at the first position, frets 2 4 1 3, chord tones major 3rd, major 7, root and perfect 5th. 


Move each note up the string, to its next chord tone, and you get the same chord, but a different voice arrangement. This time, you have frets 5, 5, 5, 7, chord tones perfect 5th, root, major 3rd and major 7th


 You can do this again, and again, once more and you arrive at your original voicing, but an octave higher!