Every company wants one, yet few companies have one: a compelling strategy. If your company is like most, your strategy is probably a hodge-podge of initiatives that individually may make sense, but collectively fail to produce a clear vision. Our research has shown that a large part of the problem lies with the strategic planning process itself.

For most companies, the strategy process typically involves the lengthy assembly of a mishmash of data and analysis into a hefty tome teeming with industry assessments, jargon-laden presentations on cost savings or market share expansion, topped off with a torrent of budgetary spreadsheets.

No wonder so few strategic plans turn into action - executives are paralysed by the muddle. Strategy formulation is all too often a draining exercise where vital resources are consumed and executives become fatigued, while the company's strategic profile remains fractured and marginal, denying the company high growth, profit and a strong brand. One company we worked with had so many strategic priorities it called a general meeting to prioritise the priorities.

Strategic planning based on drawing a picture - a "strategy canvas" - allows companies to get around this dilemma. Such a picture gives a clear overall view of company strategy. This approach produces strategies that instantly illustrate if they will stand out in the marketplace, are easy to understand and communicate, and ensure that every employee shares a single visual reference point for the strategy.

What does a strategy canvas look like? Figure 1 shows an example for the French budget hotel industry. The horizontal axis marks factors in which the industry competes, including price. The vertical axis shows the degree to which all participants actually offer these competitive factors. In this way one can create the strategic profile of companies in the industry - in this case that of Formule 1, the leading budget hotel chain in France, and of its direct competitors, one- and two-star hotels.

The picture is simple yet telling. Although there are hundreds of one- and two-star hotels in France, the strategic profiles illustrate that these hotels are "me too" renditions of one another in each category. They have little means of standing out in the eyes of customers. It is no surprise that few hotels generate notable economic returns and even fewer have a devoted following among customers.

In contrast, Formule 1's profile illustrates a clear and divergent strategy. Why? The Formule 1's strategic profile possesses the three characteristics of an effective strategy: focus, divergence and a compelling tagline. One should be able to recognise these instantly from a good strategy canvas. If your company's strategic profile does not clearly reveal these three qualities, then it is likely that your strategy will be undifferentiated and hard to communicate.

A great strategy is usually focused, and its picture should help bring out that focus. The strategic profile of Formule 1 shows that the company emphasises three factors: bed quality, hygiene and quietness. By focusing in this way, Formule 1 was able to price against one-star hotels - it doesn't have to make the extra investments in a restaurant, lounge or larger rooms. In contrast, Formule 1's competitors invest across the board in all competing factors, which makes it much more difficult for them to match Formule 1's price.

A creative strategy stands apart. Rivals usually try to improve value by offering a little more for a little less, but most do not challenge industry assumptions. For instance, while the strategic profiles of Formule 1's competitors are virtually identical, true value innovators like Formule 1 reshape the profile of the industry by eliminating or reducing investment in certain factors, or increasing investments in others, or creating altogether new factors.

The final test of a good strategy picture is how well it lends itself to a tagline. Taglines help us to remember a picture; if you can't tag a compelling label on your strategy, then it won't be easy to communicate. "Two-star comfort, one-star price," declares the tagline for Formule 1. As with all good taglines, it gives a clear and strong message that is seductive for buyers, while remaining true to the company's offering.

Less than five years after its inception, Formule 1 had more than 250 hotels in France with a profit margin double the industry average and occupancy rates three times the industry average. Formule 1 has a compelling strategy. The question is, do you? And if not, how can you create one?

Here we present a four-step structured process for drawing a company's strategy canvas that gets over the problems of traditional strategic planning, and produces distinct and communicable strategies. Let us consider how one 150-year-old financial services company, which we'll call European Financial Services (EFS), used this process to create and communicate a compelling strategy.

The process starts with a wake-up picture. A common mistake in strategy is for managers to discuss changes to strategy before resolving differences of opinion about the current state of play. They should start instead from a common perception of reality. This can be difficult because managers' perspectives are often restricted to their particular business functions, specialisations or geographical territories. Others may have a vested interest in the status quo or may feel that time will eventually vindicate their previous choices. This was certainly the case with EFS.

The process began by assembling about 20 senior managers from EFS's subsidiaries in Europe, North America, Asia and Australia. The group was split into two teams. The first group was responsible for producing a strategy canvas depicting EFS's current strategic profile in its corporate foreign exchange business. The other team was to do the same for the company's emerging online business. They were given just 90 minutes.

The strategy canvases clearly revealed shortfalls and contradictions in the company's strategy, such as a lack of focus and diverse investments in both the online and traditional businesses. What is more, EFS's two profiles were very similar to those of their competitors. They were competing on incremental changes in services, and were not in the least bit as innovative as they had thought.

Unsurprisingly, neither team could come up with a memorable tagline that was also true to their strategic profile. In the face of such direct evidence of their company's shortcomings, EFS's senior managers had no scope for defending what they had shown themselves to be a weak, unoriginal and unclear strategy.

The next step is to send the management team into the field and put them face to face with their products, and how people like or dislike using them. This may seem obvious, yet managers all too often outsource their eyes and ears in the strategy-making process.

There is simply no substitute for the personal experience of seeing buyers in action. Over a four-week period, each manager was asked to observe and interview 10 people - customers, lost customers, competitors' customers and non-customers of the industry - involved in corporate foreign exchange. They were then asked to reach outside the industry's traditional boundaries, interview corporate end users, and examine the ancillary products and services their customers used.

The field research was an epiphany for the managers, overturning many of the conclusions they had reached in the previous stage. For instance, having strong account relationship managers, which nearly everyone had agreed was one of the keys to success in the business, turned out to be anathema to most customers. The factor customers valued most was getting speedy confirmation that transactions had gone through, which only one of EFS's managers had previously suggested had any importance at all.

After the field trips, the teams were sent back to the drawing board. Each team was told to create six new and different strategic profiles, with each profile depicting a strategy that would make the company stand out in its market. For each strategy, the teams also had to create a tagline that captured the essence of the strategy and spoke directly to buyers.

After drawing and redrawing their strategic profiles, the teams came together to present their strategy canvases to representatives of EFS's external constituencies, the managers they engaged on their field trips, and senior executives. The teams were given 10 minutes to present each profile to the participants (any longer and the underlying idea is clearly too complicated to be any good). After all 12 strategies were presented, participants were asked to place votes next to the strategies they liked best, and later give reasons for their votes. The transparency and immediacy of this approach freed it from the politics that often dog the planning process.

The strategy fair exposed further truths about EFS. It became clear that the company needed to reconsider its separation of the online and offline businesses. It also learned that the things that attracted buyers were fairly consistent; there was a basic set of needs that everyone shared but went unarticulated. Using the insights of the visual strategy fair, EFS's managers drew a strategic profile for the future that would answer a hidden need in the market and had all the hallmarks of a compelling strategy.

The final step is to spread the news in a visual form that can be easily understood by any employee. To roll out its new strategy, the 20 managers went back to their field offices and introduced a copy of its new and old strategic profiles drawn on a single page to everyone in the company. They could "see" where the company stood and where they had to focus their efforts for the future.

Many employees pinned the document near their desks, to serve as a permanent reminder of the company's priorities and the gaps that needed to be closed. As people became familiar with the strategy, the new picture became a reference point for any decision. Only ideas that could be shown to help EFS move from the old to the new strategy along any of the key factors were given the go-ahead.

Can you draw your strategy canvas? Do you know what your strategy canvas looks like? How does it compare to those of your competitors? It doesn't take a crisis - or a management guru - to develop a compelling strategy. Keep it simple. Take a pen and paper, gather your team and begin drawing.

Of course, visualisation is not the only part of the strategic planning process. At some stage, the numbers and documents have to be put together and discussed. But the details will fall into place more easily if managers start planning with a picture in mind.