Analyzing CEO Psychology Using Earnings Call Transcripts: Musk vs. Barra
Quarterly earnings call transcripts are an exceptionally rich source of language data that can be analyzed to provide insights into leadership psychology and to uncover predictors of company performance.
To illustrate how to analyze leadership psychology using earnings calls, we compared differences in language-based personality between two top automotive industry CEOs—Tesla CEO Elon Musk and General Motors CEO Mary Barra—using Receptiviti’s Personality – Big 5 framework, which measures all 35 traits and facets of the “Big Five” personality construct.
Preparing earnings call transcripts for analysis
To assess Musk’s and Barra’s language-based personalities, we focused on unscripted CEO language across their respective company’s earnings call transcripts.
Unscripted CEO language
Earnings call transcripts include the entire conference call among executives (CEOs, CFOs) and sell-side analysts discussing the financial performance of the organization at the end of each quarter. Because our analysis revolved around measuring CEO language-based personality, we analyzed only natural language from the CEO. As such, we excluded the scripted portion and all non-CEO language used during each call.
Earnings calls typically begin with executives relaying a prepared, or scripted, speech. Afterward, analysts ask executives questions to which executives relay their unscripted responses. During this Q&A portion of the call, executives do not have time to carefully craft a response and regulate their language. The unscripted responses, therefore, provide natural language more representative of the CEO’s true self.
Averaging language-based personality scores across quarterly earnings call transcripts
As earnings calls are conducted at the conclusion of each quarter, transcript data is conducive to longitudinal analyses. However, for the purposes of establishing a stable assessment of each CEO’s personality, we compared Musk’s and Barra’s average language-based personality scores across all quarterly earnings call transcripts. Our sample included the unscripted portion of 30 earnings call transcripts (2014-2022) from Mary Barra and the unscripted portion of 41 earnings call transcripts (2011-2021) from Elon Musk.
Elon Musk is most notable for exuding volatile traits and behaviours characteristic of neuroticism, a Big-5 personality trait that reflects emotional instability. Consistent with his reputation, our results showed that Elon Musk used significantly more neurotic language during quarterly earnings calls than Mary Barra. That is, Musk comes across as significantly more self-conscious, anxiety-prone, and melancholic, revealing a bias toward negative emotionality and self-focused awareness.
On the other hand, Mary Barra is often recognized for her prioritization of “team-building and consensus-seeking,” which emphasizes creating and maintaining positive connections with others. In fact, we found that—compared to Musk—Barra used significantly more language indicative of agreeableness. Specifically, Barra used significantly more cooperative, generous, and empathetic language, which denote a greater consideration for other people’s needs and emotional understanding.
Contrasting Musk, Barra, and the average CEO
Our results suggest that Elon Musk and Mary Barra are two very different CEOs, but how do these differences hold up in comparison to the typical CEO? As a follow-up analysis, we compared Musk’s and Barra’s earnings call language to that of the average CEO’s. Our findings confirmed Musk as significantly more neurotic than both Barra and the average CEO and Barra as significantly more agreeable than both Musk and the average CEO. In other words, Barra demonstrates a greater focus on others during quarterly earnings calls, which corresponds with her reported “teaming” efforts, while Musk demonstrates a greater negative self-focus that aligns with his reported neuroticism.
Barra’s people-focused personality and Musk’s self-focused personality also highlights their stark differences in leadership style. Based on Barra’s and Musk’s earnings call language, Receptiviti’s Interpersonal Circumplex Model of Leadership (illustrated below) substantiates Musk as an authoritative (and directive) leader who primarily displays agentic qualities, prioritizing self-focused goals that help drive results. In contrast, the Interpersonal Circumplex exhibits Barra as an inspiring leader, one who is both agentic and communal. She is ambitious and results-driven like Musk but, at the same time, has the people-focused orientation that enables her to foster a healthy workplace culture.
There are many ways to analyze earnings calls depending on your area of interest
In addition to assessing the personality of CEOs, it is possible to examine a CEO’s psychological state over time by analyzing quarter-to-quarter changes in their natural language use. Alternatively, combining psychological analysis with topic modeling presents an opportunity to uncover which topics elicit a CEO’s fear, stress, or anxiety. These granular insights can provide early indicators of a company’s future performance.
Contact us to learn more about analyzing earnings calls and executives with Receptiviti.