NEW YORK — As CEO of Tesla, Elon Musk is often criticized for how he communicates both online and offline. But do his bad communication habits actually hurt Tesla’s financial performance? New research from Dan Wang, a Chazen Senior Scholar at Columbia Business School, interprets what CEOs say and how they say it, and finds a correlation with firm-level outcomes.
In the paper, which is forthcoming in the Strategic Management Journal, Wang and his co-authors use machine learning tools to identify unique CEO communication styles and decipher how these different styles influence CEO decision-making and the ability of their businesses to grow and change. By integrating data on facial expressions, voice, and speech transcripts, the researchers were able to predict the behavior of a firm based on five distinct CEO communication styles:
- excitable (constantly positive language as well as happy and surprised facial expressions)
- stern (angry, contemptuous, and disgusted facial expressions and less facial happiness)
- dramatic (disparate facial expressions such as anger, disgust, happiness, and sadness)
- rambling (long answers and meandering responses)
- melancholy (facial sadness and contempt)
The research indicates that these different styles correlate statistically with firm-level decisions related to acquisition of new assets and enhancement or reconfiguring of existing assets through innovation. For example, the researchers found that emerging market CEOs with dramatic communication styles in speech were less likely
to oversee acquisitions.
The results reveal that there is value to synthesizing textual sentiment and facial expressions in CEO communication styles, as opposed to analyzing firm-level outcomes using text and video data separately, as has been previously done.
The paper, “Machine Learning Approaches to Facial and Text Analysis: Discovering CEO Oral Communication Styles,” is authored by Dan Wang, David W. Zalaznick Associate Professor of Business and a Chazen Senior Scholar at Columbia Business School; Prithwiraj Choudhury, assistant professor at Harvard Business School; Natalie Carlson, PhD student at Columbia Business School; and Tarun Khanna, the Jorge Paulo Lemann Professor at Harvard Business School.
For more information, please read the related Chazen Institute research brief (PDF).
About Columbia Business School
Columbia Business School is the only world–class, Ivy League business school that delivers a learning experience where academic excellence meets with real–time exposure to the pulse of global business. Led by Dean Glenn Hubbard, the School's transformative curriculum bridges academic theory with unparalleled exposure to real world business practice, equipping students with an entrepreneurial mindset that allows them to recognize, capture, and create opportunity in any business environment. The thought leadership of the School's faculty and staff, combined with the accomplishments of its distinguished alumni and position in the center of global business, means that the School's efforts have an immediate, measurable impact on the forces shaping business every day. To learn more about Columbia Business School's position at the very center of business, please visit www.gsb.columbia.edu.
About the Jerome A. Chazen Institute for Global Business
The Jerome A. Chazen Institute for Global Business is the interdisciplinary hub of global business knowledge at Columbia Business School. By injecting a global viewpoint into coursework, supporting research on global business, and sponsoring provocative forums where business leaders and policy-makers engage in vigorous debate, we pool the vast wealth of knowledge that exists within Columbia Business School, distill it for people who operate in the world’s marketplace, and provide a global network for lifelong learning.
About Dan Wang
Dan Wang is the David W. Zalaznick Associate Professor of Business and a Chazen Senior Scholar at Columbia Business School.
His research analyzes how social networks catalyze the transformation of knowledge across organizational and cultural boundaries to drive entrepreneurship and innovation. His main project focuses on ‘reverse brain drain’, or how the return migration of skilled professionals spreads knowledge, practices, and technologies to different parts of the world. Using similar approaches, he has also developed a research stream focused on organizational understanding of social protest outcomes, using network relationships across social movement actors and organizations to predict innovation, knowledge sharing, and tactical choices across activist groups.
His work has been published in Administrative Science Quarterly, Academy of Management Journal, American Sociological Review, American Journal of Sociology, Annual Review of Sociology, Journal of Applied Psychology, Social Forces, Social Networks, and Theory and Society. He currently serves as a consulting editor for The American Journal of Sociology. His research has been recognized with multiple awards from the Academy of Management, and he has been awarded both the Dissertation (2012) and Junior Faculty Fellowship (2017) from the Kauffman Foundation.
Wang received his BA from Columbia University and PhD from Stanford University.