It sounds to me like there may be a couple different problems here.
- He doesn't do well with voiced instructions.
- He doesn't understand certain words or phrases, or has trouble turning a collection of words into a coherent message.
I think improving on #2 will help with #1.
Write down the steps for something and follow him through them. Have him read a step and then relay to you what he thinks it means (not repeat the words of the step verbatim), or show you what he thinks it means. If it's not what you told him, break down the sentence and see what word(s) is/are giving him trouble, or if it's the sentence as a whole that isn't making sense to him. From there, you can work on teaching him the words and the sentence structure and see if his direction-following improves. Also, try to make sure you're using small words as often as possible. While it's good to improve his vocabulary, giving directions isn't necessarily the time to do that. Once you've explained what your directions meant, have him do it. This will help reinforce the meaning.
From there, you can also see if his verbal-direction-following has improved. If, as he gets older, you find that he still has issues with verbal instructions, teach him good note-taking habits (perhaps even shorthand), and get a voice recorder (so he can re-listen to lectures).
Unfortunately, there's only so much you can do to grow the weaker learning styles. (That's not to say you can't do anything, but just keep in mind that a person's stronger way of learning is nearly always going to be superior.) It's simply how our brains are wired. The best thing you can do is teach him tools that make use of several learning styles and allow him to turn a given learning style (such as a lecture) into one that he does better with (notes), and how to leverage both (and even other learning styles) to get the most out of something. Also, teach him to not be afraid to speak up for himself. Being able to say "hold on, can you repeat that while I jot it down?" is at least as important as being able to remember verbal instructions, and most people are willing to accommodate such a request if asked nicely.
I hear and I forget. I see and I remember. I do and I understand. -- Confucius