CEO Language As a Predictor of Company Performance: A Language-Based Study

The language used by Chief Executive Officers (CEOs) in quarterly conference calls can reveal insights about their effectiveness as leaders during transitions in leadership roles, according to researchers. The study examined language use patterns of both outgoing and incoming CEOs in 215 companies, analyzing self-focus, other-focus, and positive and negative affect.

The research found that language use was different for old and new CEOs entering and exiting their roles, and language was found to predict company performance and vice versa. These findings illustrate the importance of language analysis in exploring leadership effectiveness during transitions, and its potential to identify the degree of old CEO detachment and new CEO assimilation within a company.

The research highlights the power of language as a tool to better understand leadership effectiveness, particularly during transitions in leadership roles. The use of computerized text analysis in analyzing language patterns provides insight into the language associated with self-focus, other-focus, and positive and negative affect, which can in turn reveal important markers of company performance. By identifying language patterns and their association with company performance, this research provides a valuable tool for understanding effective leadership during times of change.

Read the research: Language As a Marker of CEO Transition and Company Performance