Competitive advantage – a new way of calculating it

by Finn Majlergaard | 19. Feb, 2025 | Blog, Article, Cross-Cultural Consulting and team development from Gugin, featured, innovation

Share this content

Usually, when the talk is about the competitive advantage it is approached from an economic perspective only. Over the past 19 years, Gugin has helped hundreds of companies developing competitive advantage from cultural diversity. I have even co-authored a book about it that has sold really well on a global scale. So we know that competitive advantage has to do with a lot more and far more important factors than the purely economic ones.

We know from the hundreds of assignments we have had over the years, that innovation, cultural diversity and cultural intelligence are key ingredients in cultivating competitive advantage. But we have never thought about if we could create a sort of a formula that could combine and connect all the ingredients.

So we decided to give ourselves an assignment over the holiday season. The assignment was for some of us to develop one or more formulas and for others to critically assess and test them.

Good news: We found a non-economic formula for competitive advantage

In today's world where change is happening faster than ever before and where the complexity of the world is bigger than ever before it can seem very difficult to identify and develop a competitive advantage. Companies, who have been around for centuries suddenly vanish because they didn't learn - in time - to navigate in a fast-changing and increasingly complex environment. At the time, we have companies like Amazon, Airbnb and Alibaba who didn't exist 25 years ago who are now among the biggest companies in the world. They don't produce anything, they haven't won any Nobel prizes for their inventions. The only thing they have is an understanding of how to harvest money in a fast-changing and complex world.

Irrespectively of you are a young or old company you need to be competitive. Gugin is specialised in creating competitive advantage from cultural diversity. It is a big advantage. Anyone can copy your product, but nobody can copy your culture. In order to be able to create a competitive advantage, you need to have three ingredients; innovation, cultural intelligence and cultural diversity. We then believe the formula for cultural intelligence will look like something this:

Competitive Advantage formula - Gugin

 The relationship between cultural intelligence and cultural diversity

A lot of people, organisations, researchers and leaders are talking about diversity and for some people, diversity is even restricted to gender diversity. Many of those people who are talking about diversity think that diversity in itself gives a competitive advantage. Nothing could be further from the truth. If you have no knowledge about how to leverage the cultural diversity you will not see any improvement at all - in fact, you may experience increased cultural friction, which leads to lower performance and more dissatisfied employees.

On the other hand, if you have a high level of cultural intelligence but no diversity you won't gain anything either. So you need to have both diversity and cultural intelligence in order to build and develop competitive advantage and a strong resilient corporate culture.

A common misperception about diversity

it has become common knowledge that diversity is good for the competitive advantage, employee satisfaction level, profitability, etc. Unfortunately, a lot of people think diversity is only about gender diversity. But that is a wrong assumption. In fact, all kinds of diversity lead to improved competitive advantage e.g. different age-groups, different educational backgrounds, different nationalities, different genders, different professions, etc. So when you are looking at how increased diversity can improve your organisation's performance, then you have to look a lot broader than juster gender.

What is Innovation?

There is often confusion between the terms innovation and creativity. In short, creativity is just coming up with ideas while innovation is developing ideas for a particular purpose e.g. developing a new product, improving customer service or develop a new sales channel. So, in short, we can define innovation as:

Innovation formula - Gugin

In most situations, the purpose will be embedded in the company's strategy or mission. In this article, the purpose is how we can improve competitive advantage. And the direction is utterly important. Only if you stay focused on your objective you can prioritise your ideas and work on those who serve the purpose best. When we work with our client developing cross-cultural competencies we often hear, "I/we are not creative or innovative". But that is not true. Unlike what most people believe creativity is not a special gift you are born with. Being creative or innovative is in fact a very structured process that everybody cam - and should - learn. If you are interested you can learn more about our innovation workshop here.

How to target innovation towards improving competitive advantage

The first thing you have to do is deciding whether you want to become best or cheapest. You can't be both. When you have made that important choice you will have to determine which factors are contributing to gaining competitive advantage. you might want to look at what your competitors are doing, but benchmarking is a very bad path to pursue if you want to get ahead of the game. Follow in other peoples' footsteps will never bring you in front.

So you must have the confidence and courage to try something new. We work with 3 types of innovation

  1. Paradigm preserving Innovation
  2. Paradigm stretching Innovation
  3. Paradigm breaking Innovation

I will not go into details with the differences here, but just illustrate that every step towards becoming innovative is a structured process everybody can follow. We do of course cover that in our innovation workshops.

What can you do to increase the competitive advantage of my organisation?

First, you have to assess your own situation. How much diversity and cultural intelligence do you have. And how good are you to innovate? It can, of course, become very difficult getting a truthful answer to these questions. Your view on your own organisation's capabilities is biased in either one or the other direction. A better option will be to ask your external and internal stakeholders. Ask your customers if you dare. Ask your suppliers. Ask your employees at all levels.

A third option is you can ask for external help. It has a number of advantages. Firstly, an external company is not biased towards your company. They will have a more holistic and honest view of your organisation. Secondly, it is our experience that the people you ask are more likely to be open and frank if they are talked to an independent, external consultant, rather than an internal resource.

We call it the cultural due diligence process because it is a process where we assess and quantify all the parameters that contribute to your company culture. That includes your ability to innovate and the level of cultural intelligence in your organisation.

Please get in touch if you want to discuss further or if you have a question. We will be happy to help

 

Dr Finn Majlergaard
Dr Finn Majlergaard

CEO Gugin, Professor, Author, Keynote Speaker, Author

  • We align your corporate culture with your strategy.
  • We take you safely through major changes in your organisation.
  • We develop the crucial cultural intelligence in your organisation by training your employees and leaders
  • We help you develop a competitive advantage with a unique corporate culture

Gugin has helped more than 600 companies around the world creating a winning corporate culture.

Contact Gugin

What separates a good leader from one who truly moves people? Research — and decades of cultural intelligence practice — point to one word: charisma. And unlike talent, charisma can be learned.

In 1979, Warner Records refused to send Prince on tour. Not because of his music — they knew he was exceptional — but because he lacked charisma. He couldn't yet move an audience. Fast forward one year, and Prince had transformed himself into one of the most commanding performers in the history of popular music. He didn't wait for charisma to arrive. He worked at it, systematically, studying and adopting the techniques of the performers he admired.

That story is not just about rock and roll. It is a precise metaphor for leadership. At Gugin, we have spent over two decades helping leaders across cultures and industries make exactly this kind of transformation — not by telling them to "be more confident," but by equipping them with concrete, learnable strategies rooted in emotional intelligence, cultural intelligence, and communication science.

 

Why Most Charisma Advice Fails

The most common advice leaders receive about charisma is frustratingly vague: project confidence, be warm, be present. These qualities do matter. But they are nearly impossible to "just do" on command, especially under pressure, across cultures, or in unfamiliar organisational contexts.

Research by Professor John Antonakis and his colleagues at the University of Lausanne Business School has shown that charisma is not a personality trait reserved for the few — it is a set of communicative behaviours that can be identified, taught, and practised. In their studies, randomly selected middle managers who underwent structured charisma training were subsequently rated by peers and subordinates as more charismatic, more competent, and more trustworthy. The training worked.

At Gugin, we have built on this science and gone further — weaving it together with emotional intelligence (EQ) and cultural intelligence (CQ) to create a leadership development approach that is both evidence-based and globally applicable.

The Nine Charismatic Behaviours — And What They Really Require

The Antonakis research identifies nine concrete charismatic leadership tactics: using metaphors and stories, showing moral conviction, expressing shared feelings, setting high expectations, using contrast and rhetorical questions, using lists, and animating communication with body language. These are the building blocks. But building blocks need a foundation — and that foundation is emotional and cultural intelligence.

Take metaphors, for example. A metaphor is only powerful if it resonates with the audience. In Gugin's cross-cultural leadership programmes, leaders quickly discover that a metaphor drawn from American sports culture may fall flat in a team from Northern Europe, and that a story invoking individual heroism may alienate a collectivist audience in East Asia. The charismatic tactic is the same; the cultural calibration is everything.

The same applies to moral conviction. Appealing to shared values is one of the most potent charismatic tools a leader has. But whose values? Which moral frameworks? A leader operating across multiple cultural contexts must understand that concepts like fairness, loyalty, duty, and hierarchy carry profoundly different weight in different cultures. High cultural intelligence — the ability to read, respect, and adapt to cultural difference — is what allows a leader to express genuine moral conviction that actually connects rather than alienates.

Emotional Intelligence: The Inner Architecture of Charisma

Charisma without emotional grounding is performance. It can work in the short term, but it rarely sustains trust. The leaders Gugin works with are taught to understand that emotional intelligence is not a soft supplement to charismatic leadership — it is its inner architecture.

Consider the tactic of expressing shared feelings. Antonakis identifies this as key: when a leader says "I feel the same uncertainty you do, and here is how I am holding it," they build identification and trust. But this requires real self-awareness. Leaders must be able to name and regulate their own emotional states before they can credibly reflect the emotions of others. In Gugin's programmes, we invest significant time in developing exactly this capacity — helping leaders identify their emotional triggers, understand how their inner states broadcast outward, and build the emotional vocabulary needed to communicate with authenticity.

Empathy — a core dimension of emotional intelligence — also directly underpins several charismatic behaviours. Setting high expectations while simultaneously communicating belief in others (another of the Antonakis tactics) requires a leader who genuinely sees the potential in the people around them. That kind of seeing is empathic. It cannot be faked over time. When Prince produced the band The Time for Warner Brothers, he did not simply demand excellence — he made each member believe they were capable of more than they thought. That is emotionally intelligent leadership in action.

Cultural Intelligence: Charisma That Travels

One of the most important — and most overlooked — dimensions of charismatic leadership in today's world is its cultural portability. A leader who is magnetic in one cultural context may be perceived as arrogant, shallow, or inappropriate in another. This is not a flaw in those audiences. It is a signal that charisma, like all communication, is culturally embedded.

Gugin's work in over 60 countries has shown us that the nine charismatic tactics are universal in their structure but must be culturally adapted in their expression. Rhetorical questions, for instance, invite participation and create anticipation — but their delivery must match the power-distance norms of the audience. In high-hierarchy cultures, a rhetorical question from a senior leader may silence a room rather than energise it. In low-hierarchy cultures, it may spark exactly the engagement intended. Cultural intelligence tells the leader which dynamic they are working in, and how to adjust.

Similarly, the use of storytelling — one of the most powerful charismatic tools — varies enormously across cultures in terms of what stories are appropriate, how direct or indirect they should be, and what kinds of protagonists resonate. Gugin teaches leaders to build a culturally diverse repertoire of stories and to develop the sensitivity to know which story belongs in which room.

How Gugin Trains Charismatic Leaders

Gugin's leadership development programmes integrate the science of charismatic communication with structured development in emotional and cultural intelligence. The process is iterative and experiential, not theoretical.

Leaders begin by gaining honest self-awareness: understanding how they are currently perceived, what emotional signals they project under pressure, and how their default communication style reads across cultures. This foundation phase often surfaces important blind spots — the technically brilliant executive who speaks too abstractly to inspire, the empathetic manager whose conflict-avoidance reads as a lack of conviction.

From there, leaders move into skill-building: practising charismatic communication tactics in safe, structured environments with real feedback. They learn to craft metaphors that carry cultural resonance, to tell personal stories that build connection without oversharing, to use contrast and rhetorical structure to sharpen their message. They receive coaching on non-verbal communication — the body language, vocal variety, and presence that Antonakis identifies as essential to bringing charisma alive.

Finally, leaders apply these skills in live contexts, with coaching support, and receive 360-degree feedback that tracks their progress. This mirrors the approach Antonakis found to be effective — group training combined with individual coaching — and embeds it within the broader cultural and emotional intelligence framework that makes the development durable and globally relevant.

Charisma as a Leadership Responsibility

There is a deeper point worth making. Charisma is not about making yourself more impressive. At its best, it is about making others feel seen, energised, and capable of more than they believed. It is about communicating in a way that bridges difference, builds shared purpose, and creates the conditions for people to do their best work.

In a world where leaders must navigate unprecedented complexity — technological disruption, geopolitical volatility, multi-generational and multicultural workforces — the ability to communicate with clarity, conviction, and emotional resonance is not optional. It is a strategic capability.

Prince didn't work on his charisma because he wanted to be famous. He worked on it because he knew, instinctively, that the music mattered — and that without the ability to connect, the music would never reach the people it was meant for.

The same is true of leadership. The work matters. Charisma is what carries it across.

 

About Gugin  |  Gugin is a global advisory firm specialising in cultural and emotional intelligence. We help organisations build the leadership capability to thrive in a complex, multicultural world. Learn more at www.gugin.com

error: Content is protected from theft