We like to think it's our sound arguments and superior ideas that sway other people to our opinions, but science shows humans are way weirder than that.
People respond to a whole host of unexpected cues, from how someone walks and smells to the specific words they choose to express themselves, when deciding whom to trust and whether to buy what they're selling. That's why even the smallest shifts in presentation can often have outsized impacts on communication.
Five tiny words with a big impact
A new study out of Tulane University reported in the Wall Street Journal is the perfect example. You'd think that investors would be among the most cold-blooded and rational consumers of information-- after all, fortunes depend on them making bias-free judgments about what they hear on earnings calls -- but according to this new research, they are actually highly swayed by one tiny shift in language, just like everyone.
When the researchers sifted through data on 50,000 real-life earnings calls, they found that the market reacted more positively when the CEO used more first person pronouns, i.e. "I," "me," "my," "us," and "we." Ratings of fictional conference calls supported the conclusion that investors feel better about companies whose bosses employ these five little words more often.
Obviously, pronouns aren't giving investors and substantive information about the performance of the company, so why are stocks rising based on their use? The researchers suggest that investors may react so positively to these words because they create the (unconscious) impression that the CEO is really in control. But other experts think this "self-inclusive language" might just make CEOs seem, well, a bit nicer.
"The way I interpret it is that the manager's coming across as more human," James Pennebaker, a psychology professor at the University of Texas at Austin, told the WSJ's Matthew Kassel.
How to put this information to use outside earnings calls
Whatever the exact explanation for the effect, the fact that so-called self-inclusive language has such a noticeable effect is useful for leaders to know whether or not they're going to be conducting earnings calls in the near future or not. If words like "I," "me," and "us" are powerful enough to move stock prices, they're certainly powerful enough to affect how you're perceived by those you hope to charm or persuade.
The results suggest that by simply skipping impersonal business speak and allowing your language to imply your personal commitment to your company or team, you'll be more likely to create a positive impression of warmth and competence -- and more likely to persuade others of whatever you're saying.
Considering these five little words take absolutely no effort to add to your next presentation, meeting, or sales call, it's well worth slipping them in and seeing if you notice the same impact as the Tulane researchers.