Humor isn’t part of most mission statements. Organizations are busy with the serious challenges of trying to improve sales, service and innovation. Besides, being funny is risky. No one appreciates a poorly timed joke or the overactive “fun-gineer” blasting the office with cheesy motivational emails.

Yet CEOs, the same people who set the organization’s mission, tend to say that a sense of humor is among their most important traits. Dick Costolo’s wit was on full display a year before he became a CEO, when he tweeted, “First full day as Twitter COO tomorrow. Task #1: Undermine CEO, consolidate power.” Steve Jobs’ keynote launching the iPhone clocked in at .6 laughs per minute — not good enough for Letterman, but better than most new comics. And Warren Buffett often tempers bad news by sprinkling pithy one-liners into his interviews and investor letters (“You only find out who is swimming naked when the tide goes out”).

My research examines what makes things funny, an overlooked topic by scholars and managers alike. Of course I know that jokes, even good ones, can’t overcome a poor debt-to-income ratio or keep a company in compliance with Sarbanes-Oxley. Humor, however, provides serious value to organizations when used by the right people at the right time.

Humor can help brands cut through a cluttered marketplace. A well-executed joke grabs attention, sticks in customers’ memories better than most ad campaigns could, and injects brands into water cooler conversation.

It also has the benefit of making companies seem more human. The occasional funny tweet or disarming quip made by a service agent reminds customers that there is a real person on the other end of the line. These interactions diffuse tensions and build brand-customer camaraderie, opening the door for successful sales and service. Take, for example, a study that once asked people to negotiate the sale of a high-priced painting. It found that parties were more likely to come to an agreement if the person making a final offer also jibed, “I’ll throw in my pet frog.” In another study that looked at using email to negotiate for an employment package, simply attaching a “Dilbert” cartoon led to enhanced feelings of trust and jointly beneficial agreements.

And any good HR manager can tell you that workplace satisfaction — not compensation — is the best predictor of employee retention. Humor can be a powerful tool in inter-office communications, as research has shown that it’s a useful way to cope with pain, stress and adversity (in other words, staff meetings). In one study, subjects watched a film depicting a series of industrial accidents. Subjects who were asked to create a humorous narrative of the events reported less stress and experienced lower physiological arousal than subjects who were asked to create a serious narrative.

A sense of humor can also help leaders muster support for new endeavors and can ease the sting of critical feedback. An easy trick is to be self-deprecating. Ever notice how most standup comedians begin shows by pointing out their own flaws? That does more than create a surefire laugh — it also gives them license to point out what is wrong with everyone else.

Plus, those jokes could boost the team’s performance. A study on university teaching found that adding three or four funny anecdotes related to class topics increased undergraduates’ grades by 10 percentage points. And did I mention that this was in a statistics course?

Finally, humor can actually fuel problem solving and innovation, helping to improve an organization’s creative process and broaden people’s perspective. Researchers once gave subjects a box of tacks, a set of matches and a candle to affix to the wall. The task was to figure out how to position the candle, when lit, so it wouldn’t drip on the floor. Subjects who had just watched an amusing video clip were significantly more likely to recognize the solution, which is that the box holding the tacks can serve as the candle’s base. In another brainstorming study, a group of improv comedians generated 20 percent more ideas than professional product designers did, and the improvisers’ ideas were also rated 25 percent more creative.

So maybe a bit of wit on the job actually will help improve sales, service and innovation. After all, work and play don’t have to be opposites.

Peter McGraw, a marketing and psychology professor at the University of Colorado Boulder, directs the Humor Research Lab (HuRL). He is the co-author with Joel Warner of "The Humor Code: A Global Search for What Makes Things Funny."

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