Has Effective Communication Become the Ultimate CEO Leadership Assessment?

Even more than most election cycles, 2024 has been a rollercoaster. Leaving aside, for the moment, the assassination attempt on former President Donald Trump that very nearly succeeded, it’s worth remembering that it was President Joe Biden’s disastrous debate performance just weeks ago that led directly to his decision not to seek reelection.

Prior to that debate, the isolated voices claiming that Biden was too old, or was in cognitive decline, were more easily ignored. But after his alarming performance, the calls for him to step down grew ever louder, and none of the subsequent efforts at damage control – a speech before NATO, two TV interviews – could silence or even slow that rising chorus.

This turn of events should remind us how important clear communication is to effective leadership. Being the Communicator-in-Chief has long been an expected skill for a President or elected representative of consequence. But has it become the litmus test? And if so, does it apply equally to CEOs and business leaders, not just elected leaders?

You can make a case for it, and if nothing else it’s clear that communication skills are increasingly valued within the highest echelons of government and corporate leadership. A great communicator cultivates confidence in a strategy, conveys competence in its execution – and perhaps most importantly, gives stakeholders a reason to believe, and a reason to care. From President Zelenskyy’s famous speech before Congress, to Steve Jobs introducing the iPhone, to then-candidate Barack Obama’s “Yes We Can” speech that catapulted his campaign, to Alan Mulally’s 2012 “60 Minutes” interview where he championed Ford’s turnaround, compelling communicators seem to be leading the world’s most successful institutions. Causation or correlation?  Let’s unpack it.

Consider the case of Elon Musk, CEO of Tesla, whose erratic and controversial tweets have often caused significant fluctuations in the company’s stock price and made investors wary. Long before the acquisition of X, Musk’s communication style, while memorable, has overshadowed Tesla’s operational achievements and created unnecessary turbulence for the company.

Remember Vishal Garg, CEO of the mortgage startup Better.com. In December 2021, as the company was preparing to go public via a SPAC, he announced that 900 employees would be terminated over a short Zoom call. The abrupt thoughtlessness of this action led to widespread backlash, significantly damaged Better.com’s reputation, and sparked internal turmoil at the company. Better.com did ultimately go public in 2023, though its value plunged almost immediately.

If communication style is a proxy for effective leadership, these two examples show that erratic or careless communication can go hand in hand with poor results. But does this hold up outside of startups and Silicon Valley?

Recall the abrupt resignation of former Boeing CEO Dennis Muilenburg after he failed to address concerns and provide clear, reassuring communication to regulators, customers, and the public in the aftermath of the Boeing 737 Max crashes. Or John Stumpf, the former Wells Fargo CEO who resigned after a disastrous performance in front of Congress defending the company against fraud accusations. In both cases, the inability to manage crisis communication underscored how crucial this skill is for maintaining a company’s reputation and stakeholder confidence in challenging times.

On the flip side, leaders who excel at communications often see their business excel as well.  Satya Nadella, when appointed CEO of Microsoft, was tasked with explaining the company’s strategic shift to cloud and AI. His consistency and clarity in communicating the whys and hows of this strategy were instrumental in the company’s resurgence. His coherent and inspiring vision galvanized employees and won the confidence of investors and customers. Under his leadership, Microsoft’s market value has soared, reflecting the critical role of effective communication in business success.

Recent data from executive recruiting firms show that communication prowess is now a top criterion in CEO searches. According to Spencer Stuart, a leading executive search firm, effective communication is one of the “new critical attributes” that CEOs of the future need to have. Business schools – the training grounds for future CEO’s – also increasingly acknowledge the importance of communication skills. Both Harvard Business School and the Wharton School have expanded their curricula to include more comprehensive communication and leadership training modules, emphasizing the need for future leaders to master this essential skill.

Correlation or causation? It’s true that not all great communicators are also effective leaders – but in today’s always-on media environment, there are few effective leaders who aren’t also strong communicators. If you are a leader looking to take your communications skills to the next level, reach out to us about our media training or fill out the form below.