Photo courtesy of Wikimedia Commons; Mark Hirschey
One of Warren Buffett’s key business principles states:
“We will be candid in all our communications.”
Given Warren Buffett’s immense success, you would think more CEOs would follow his lead, at least in candor. This got us thinking: how does Buffett’s communication style compare to that of other CEOs. To find out, we quantified Warren Buffett’s spoken communication against comparable speeches by other CEOs. In order to capture the “candor” in their communications, we focused on benchmarking authenticity.
What do we mean by authenticity? We define it as giving the impression that your words match your beliefs and actions. Authenticity is about building a relationship with your audience. Academic researchers, like social psychologist Dr. Gary Alan Fine, define it as sincere, innocent, original, genuine and unaffected, as distinct from strategic and pragmatic self-presentation. Joseph Petraglia, a doctor of rhetoric, has found that the importance of authenticity is that it enables individuals to understand how information can relate to their everyday lives.
In order to understand Warren Buffett’s authentic communication style, we compared two samples of his spoken communication – a CNBC interview and a speech to University of Georgia students – to spoken content from a sample set of CEOs and our database of executive communicators.
As expected, Warren Buffett scored best-in-class on authenticity. What surprised us was he also scored abnormally high on clarity and storytelling when benchmarked against other CEOs.
Consequently we wanted to know whether clarity and storytelling are correlated with an executive’s perceived authenticity. Again, we used communications data to find out.
- Clarity – We found that message clarity is 92.4% correlated with authenticity only in a spoken context. We speak differently than we write. Written communication is more formal and detailed, while spoken communication tends to be informal and direct. If a public speaker gets on stage and starts reading their prepared remarks, word-for-word, it sounds unnatural to the audience. This impacts their perceived authenticity.
The following example from Buffett’s speech to University of Georgia students shows his conversational style:
“I really want to talk about what’s on your mind, so we’re going to do a Q and A in a minute. There are a couple questions I always get asked. You know, people always say, “Well who should I go to work for when I get out then?” I’ve got a very simple answer, we may elaborate more on this as we go along, but, you know the real thing to do is to get going for some institution or individual that you admire. I mean it’s crazy to take in-between jobs just because they look good on your resume, or because you get a little higher starting pay.”
Even though Mr. Buffett is giving a speech on stage behind a podium, he is having a conversation with the audience. He is no longer delivering a speech; he is building relationships.
- Storytelling – In all of the spoken communication we analyzed, storytelling was 91.4% correlated with authenticity. Telling stories has always been a way to teach, to explain and to learn from others. As Joseph Petraglia has pointed out, the narrative approach provides context for information in the form of stories, anecdotes, and cases. In fact, narratives are an integral part of all of our learning. Stories help your audience to relate to your material, which in turn helps them internalize your message. When your audience relates to your message, that connection further builds your relationship, which then bolsters your perceived authenticity.
Another famous Warren Buffett principle is “You only have to do a very few things right in your life so long as you don’t do too many things wrong,” so we also wanted to analyze where Warren Buffett’s communication falls short.
Warren Buffett scored almost 21% below the average CEO on communicating confidence.
We believe there is a lesson here for senior executives – if you are clear and candid in your communication and you have a great track record, you don’t need to portray confidence. People will have confidence in you. Mr. Buffett is direct, to the point and easy to understand. His reputation for giving invaluable advice leaves people hanging on his every word. His focus on authenticity has served him well in communications and in life.