Earnings calls are supposed to be an opportunity for executive leadership to answer questions from investors and analysts, though their responses can often be far from earnest. To combat this, some organizations employ voice-analyzing technology to detect if executive answers are honest or not, according to strategy + business.
Valens Research offers such services, utilizing the firm's proprietary electro-audiogram system to measure voice patterns. The technology analyzes 15 markers that gauge whether or not the speaker believes what they are saying.
The efficacy of this process is dependent upon the principal of cognitive dissonance, which is a discomfort that stems from someone holding two opposing ideas in their mind simultaneously. After listening to earnings calls, Valens analysts report to their clients on the confidence of speakers; that is, whether they believe in their answers or not.
The confidence leaders have in their answers about plans for the future is a good indicator of whether investors should have faith in the company moving forward or if perhaps there are unstable times ahead.
Leaders often espouse generic talking points during earnings calls, the kind of purposefully vague double-talk that relays very little information. This voice analysis technology gleans valuable information from these phrases and gives investors and analysts a look into what executives really think about their company's future prospects.