Why most companies fail at execution and how the 4-Level Operating Model Canvas fixes the strategy-to-results gap.

A $17 billion technology budget tells you more about JPMorgan Chase’s operating model than any org chart ever could. While competitors debate “digital transformation,” JPMorgan simply engineered their entire organization around one inevitable outcome: being the technology leader in financial services.

After working with hundreds of executives on strategy, one pattern emerges: Companies that nail positioning still fail at execution. They know what they want to own in the market, but their organizations make it structurally impossible to deliver.

The problem isn’t strategy. It’s the false separation between positioning and operating models.

The Current Belief System (And Why It’s Broken)

Most executives treat operating models like plumbing, necessary infrastructure that comes after the “real” strategic work is done. This creates three devastating assumptions:

Assumption 1: Operating Models Are About Efficiency
The prevailing wisdom treats operating models as cost optimization exercises. McKinsey’s 12-element framework, BCG’s platform approaches, Bain’s five dimensions all focus on making existing operations smoother, not making strategy inevitable.

Assumption 2: Structure Follows Strategy
The classic “strategy first, then organize” sequence sounds logical but breaks down in practice. Companies develop beautiful strategies, then try to bolt them onto existing organizational structures. The result? A 30% gap between strategic potential and actual delivery, even in high-performing companies.

Assumption 3: Operating Models Are Copyable
Most frameworks produce org charts and process flows that competitors can reverse-engineer within months. When your operating model can be copied, it becomes a cost center, not a competitive advantage.

These assumptions explain why 60-70% of organizational transformations fail despite billions in consulting spend.

Why I Created the 4-Level Operating Model Canvas

The breakthrough came from a simple observation: Companies that dominate markets don’t just have great positioning, they have organizations that make their positioning inevitable.

Netflix didn’t just decide to “own streaming.” They built an operating model where every organizational choice, from cloud infrastructure to data science teams to content creation, makes streaming dominance structurally inevitable.

Toyota didn’t just claim “quality leadership.” They engineered an operating model where continuous improvement and mistake-proofing are organizationally impossible to avoid.

The 4-Level Operating Model Canvas solves the strategy-execution gap by applying the same gravity-well logic that makes positioning unassailable to organizational design.

How It’s Different: From Gravity to Inevitability

Traditional frameworks treat operating models as collections of elements to optimize. The 4-Level approach treats them as gravity wells that make strategic outcomes inevitable.

Traditional Approach:

• 12+ elements to balance
• Focus on efficiency and best practices
• Separation between strategy and operations
• Easily copyable processes and structures

4-Level Approach:

• 4 progressive levels of strategic entrenchment
• Focus on making positioning structurally inevitable
• Integration of strategy and operations
• Competitive advantage through organizational architecture

Just as the positioning canvas moves from sayable to inevitable, the operating model canvas moves from copyable to architecturally unique.

How the 4-Level Operating Model Canvas Works

Each level represents a deeper organizational entrenchment of your strategic positioning:

Level 1 — Saying It: Structure

What it means: Org charts, job titles, stated processes
Copyability: Instant
Cost/Risk: Cheap

This is where most companies stop. They create org charts that look strategic but can be copied overnight. A “Chief Innovation Officer” title or “Customer Success” department sounds impressive but proves nothing about capability.

Example: Netflix’s content, technology, and operations divisions look similar to any media company’s structure.

Level 2 — Proving It: Systems

What it means: Working processes, metrics, and technology that demonstrates capability
Copyability: Moderate
Cost/Risk: Low-Medium

Here you build systems that actually work, not just look good on paper. Competitors can see what you’re doing and invest to catch up, but it takes time and resources.

Example: Netflix’s recommendation algorithms, A/B testing infrastructure, and global content distribution systems.

Level 3 — Being It: Resource Allocation

What it means: Where you spend money/time that competitors would hate to match
Copyability: Hard
Cost/Risk: High

This level requires making resource allocation decisions that directly serve your positioning, even when they seem expensive or risky to outsiders.

Example: Netflix spending $17 billion annually on original content while competitors focus on licensed content acquisition.

Level 4 — Owning It: Value Architecture

What it means: Business model where your positioning becomes organizationally inevitable
Copyability: Nearly Impossible
Cost/Risk: Existential

The entire organizational system is architected so that your strategic positioning becomes the only sustainable path forward. Changing this would require rebuilding the business from scratch.

Example: Netflix’s data-driven content creation flywheel where viewer data → content decisions → more engaging content → more viewers → better data → better content decisions.

How It Adds Strategic Depth to the 4-Level Positioning Canvas

The positioning canvas answers “What should we own in the market?” The operating model canvas answers, “How do we make that ownership inevitable?”

Example: HubSpot

Positioning Canvas:

• Level 4 Positioning: INBOUND GROWTH
• Level 3 Being It: Free tools that cost millions to build
• Level 2 Proving It: Customer success metrics and ROI case studies
• Level 1 Saying It: “Grow Better” tagline

Operating Model Canvas:

• Level 4 Operating: Growth flywheel where free tools → inbound leads → customer success → revenue → better free tools
• Level 3 Resource Allocation: 40% of engineering resources dedicated to free tool development
• Level 2 Systems: Integrated platform that makes switching costs prohibitive
• Level 1 Structure: Marketing, Sales, and Service hubs organized around inbound methodology

The two canvases lock together: HubSpot’s positioning (INBOUND GROWTH) becomes inevitable because their operating model makes any other approach organizationally impossible.

The Inspirations Behind the Framework

Roger L. Martin’s Strategic Choice Integration
Martin’s insight that capabilities and management systems are strategic choices, not execution afterthoughts, forms the theoretical foundation. His work with A.G. Lafley at P&G demonstrated how simultaneous choice-making across positioning and operations creates sustainable advantage.

Toyota Production System’s Architectural Thinking
Toyota didn’t just implement lean manufacturing; they created an organizational architecture where continuous improvement becomes inevitable. Every process, role, and system reinforces the same core principle.

Platform Economics and Network Effects
Companies like Amazon and Netflix don’t just have good strategies; they have operating models that create compounding advantages. Each customer interaction makes the platform more valuable for all participants.

McKinsey’s 30% Performance Gap Research
The consistent finding that even high-performing companies leave 30% of strategic value on the table points to a fundamental problem: the strategy-to-execution translation. The 4-Level framework directly addresses this gap.

How to Use the 4-Level Operating Model Canvas

Step 1: Start with Positioning Clarity

Before touching the operating model canvas, complete the 4-Level Positioning Canvas. You need to know what you’re trying to make inevitable before you can architect inevitability.

Step 2: Audit Your Current Operating Model

Fill out the canvas for your current state:

Level	Definition	Your Current Operating Model
1 — Saying It	Org charts, job descriptions, stated processes
2 — Proving It	Working systems, metrics, technology demonstrations
3 — Being It	Resource allocation decisions that serve your positioning
4 — Owning It	Value architecture that makes your positioning inevitable

Step 3: Identify the Integration Gap

Compare your Level 4 positioning with your Level 4 operating model. Ask:

• Does your operating model make your positioning inevitable?
• If someone audited your resource allocation, would they correctly guess your positioning?
• What would competitors have to fundamentally change to copy your approach?

Step 4: Design Your Target Operating Model

Work backwards from Level 4. If your positioning were inevitable, what would your value architecture look like? Then work down through the levels.

Step 5: Plan the Transformation

Most companies try to jump straight to Level 4. Instead, build systematically:

• Months 1-3: Level 1 structural changes
• Months 4-9: Level 2 system implementations
• Months 10-18: Level 3 resource reallocation
• Months 19-24: Level 4 value architecture completion

Executive Homework: Preparing to Use the Framework

Before running the canvas with your team, complete this diagnostic work:

The Resource Audit

Track where you actually spend money and time for 30 days. Categories:

• Positioning-Aligned: Directly serves your Level 4 positioning
• Neutral: Necessary but doesn’t reinforce positioning
• Contradictory: Undermines or conflicts with positioning

Target: 60%+ positioning-aligned within 12 months.

The Decision Pattern Analysis

Review your last 20 significant business decisions. For each, ask:

• Did this decision reinforce our positioning?
• Would a competitor with different positioning make the same choice?
• If we owned our positioning category, would this decision be inevitable?

Pattern Recognition: Companies with strong operating models show 80%+ positioning-consistent decisions.

The Copycat Stress Test

List your top 3 competitive advantages. For each, estimate:

• Time to copy: How long would it take a funded competitor to replicate this?
• Cost to copy: What would it cost them in dollars and opportunity cost?
• Risk to copy: What would they have to sacrifice from their current model?

Benchmark: Level 4 advantages require 2+ years, $50M+, and fundamental business model changes to replicate.

The Employee Understanding Check

Survey 20 employees across levels and functions. Ask:

• “In one sentence, what does our company do better than anyone else?”
• “If you had to explain our strategy to a 10-year-old, what would you say?”
• “What makes us different from our biggest competitor?”

Alignment Check: 70%+ should give answers that cluster around your Level 4 positioning.

How to Roll Out, Test, and Validate

Phase 1: Leadership Alignment (Weeks 1-4)

Run the canvas with your executive team. Goal: 100% alignment on Level 4 target state.

Validation Criteria:

• Every executive can explain the Level 4 operating model in 2 minutes
• Team can identify specific decisions that need to change
• Clear agreement on what success looks like

Phase 2: Middle Management Cascade (Weeks 5-8)

Train department heads to identify how their functions support the Level 4 operating model.

Validation Questions:

• “How does your department make our positioning inevitable?”
• “What would you do differently if you fully owned our market category?”
• “What constraints prevent you from supporting our Level 4 model?”

Phase 3: Pilot Implementation (Months 3-6)

Choose one business unit or function to implement the full 4-level model. This becomes your proof of concept.

Success Metrics:

• Decision speed (faster choices aligned with positioning)
• Resource utilization (higher percentage of positioning-aligned spending)
• Employee engagement (clearer connection between role and strategy)
• External recognition (market perception of leadership in your category)

Phase 4: Full Rollout (Months 7-12)

Scale learnings across the organization with quarterly check-ins.

Measuring Success: Before and After Metrics

Financial Performance Indicators

Revenue Growth Rate

• Before: Baseline annual growth rate
• After: Target 15-25% improvement in growth rate aligned with positioning

Operating Margins

• Before: Current margin levels
• After: Target 200-300 basis points improvement through positioning-aligned efficiency

Market Share in Core Category

• Before: Current share in your Level 4 positioning category
• After: Target 20-30% share improvement within 18 months

Operational Excellence Metrics

Decision-Making Speed

• Before: Average time for strategic decisions
• After: Target 40-60% reduction in decision time

Resource Allocation Alignment

• Before: Percentage of resources directly supporting positioning
• After: Target 60%+ positioning-aligned allocation

Employee Positioning Understanding

• Before: Baseline survey of positioning comprehension
• After: Target 80%+ employee clarity on positioning and their role

Strategic Momentum Indicators

Competitive Response Time

• Before: How quickly competitors copy your innovations
• After: Target 2x longer competitor response time

Market Leadership Recognition

• Before: Current analyst/media positioning
• After: Top 3 recognition in your owned category

Customer Positioning Association

• Before: Brand awareness and category association
• After: Target top-of-mind awareness in your positioning category

Leading Indicators (Monthly Tracking)

• Integration Score: Percentage of business decisions that reinforce positioning
• Copycat Difficulty: Estimated time/cost for competitors to replicate key advantages
• Value Architecture Maturity: Progress toward Level 4 inevitability model

The Competitive Advantage of Inevitability

Companies using the 4-Level Operating Model Canvas report a fundamental shift in how they compete. Instead of fighting feature battles or price wars, they compete on organizational architecture, something that’s nearly impossible to replicate quickly.

Netflix vs. Disney+ Example: Disney+ launched with superior content library and brand recognition, but Netflix’s Level 4 operating model (data-driven content creation flywheel) means they improve faster with each viewer interaction. Disney+ can copy Netflix’s interface or pricing, but not their organizational learning architecture.

The Time Arbitrage Advantage: While competitors focus on copyable tactics (Level 1-2), companies with Level 4 operating models compound their advantages. Each day makes their positioning more inevitable, not just more defensible.

Implementation Warning: The Inevitability Paradox

The most powerful aspect of this framework is also its biggest risk. Once you architect inevitability around your positioning, changing course becomes exponentially more difficult. This is why the homework phase is critical. You need absolute clarity on your Level 4 positioning before making it inevitable.

Netflix’s Inevitability Lock-In: Netflix’s operating model makes streaming dominance inevitable, but it also makes pivoting to other entertainment models nearly impossible. Their organizational architecture is perfectly designed for personalized, on-demand content consumption.

The Strategic Commitment Test: Before implementing Level 4, ask: “Are we willing to make our positioning so inevitable that changing it would require rebuilding the company?” If the answer is anything but “absolutely,” stay at Level 3 until you achieve positioning certainty.

Your Next Move

Most executives stop at positioning strategy. The ones who win make that positioning organizationally inevitable.

The 4-Level Operating Model Canvas doesn’t just improve execution, it makes your strategy impossible to ignore, difficult to copy, and inevitable to deliver.

Your homework starts now:

1. Complete the resource audit
2. Run the decision pattern analysis
3. Execute the copycat stress test
4. Check employee understanding

Then download the editable canvas and start building inevitability into your organization.

The Question That Changes Everything: If you truly owned your market category, what would your organization look like? And what’s stopping you from building that organization today? The companies that answer this question don’t just compete in markets — they define them.

Ready to make your strategy inevitable? Get the 4-Level Operating Model Canvas and start building organizational inevitability around your positioning. Because the best strategy in the world is worthless if your organization makes it impossible to execute.