Harvard Business Review

Laughing Your Way to the Bank


Posted on Harvard Business Review: April 12, 2010 11:12 AM

Go ahead, LOL. A sense of humor is an under-rated tool for entrepreneurs, innovators, and change agents. And that's no joke.

To keep the recovery going and put people back to work, imaginative entrepreneurs must start new businesses and revitalize old ones. Creative leaders unlock ingenuity and build support for change by lightening up. They are willing to consider new possibilities that seem absurd, even ludicrous, at first. They shake up thinking as though shaking a kaleidoscope, allowing surprising new juxtapositions to emerge. This is exactly what humor is all about: playing with ideas, challenging assumptions, and poking fun at tradition.

Some entrepreneurs thrive on humor. Monster.com founder Jeff Taylor went on both to start new Internet ventures and crack jokes as a part-time radio disk jockey. Former BBC head Greg Dyke produced a wave of creativity, including development of the BBC hit comedy, The Office, by going to ridiculous extremes that gave others permission to float "silly" (and often successful) ideas. For example, he printed yellow cards resembling penalty cards in European soccer marked "Cut the crap, make it happen" that could be tossed on the table during ponderous meetings.

To create a memorable image that would make people laugh and open their minds, the CEO of a Silicon Valley company launched a push for game-changing innovation with a parade of elephants of increasing size at a top executive beach retreat. Similarly, the head of retail banking in a West Coast bank led a highly successful consumer lending program, which included breakthrough innovations such as terminals in car dealerships for instant loan processing. He kicked it off by riding into the office in downtown Los Angeles one morning on his horse dressed as the "Lone (Ar)ranger"—complete with mask and water pistol. Managers attributed the success of The Loan Arranger campaign to creativity stimulated by the memorable joke that started it.

Creativity training features analogies to open minds to new possibilities. Some are very funny—such as using a horse's rear end mechanism (so to speak) as an inspiration for containers that squeeze out viscous liquids. To stimulate kaleidoscope thinking, colleagues and I created brainstorming games such as "fishing for ideas," which was done "just for the halibut."

Future innovators often produce hilarious feats of imagination. Some of the best pranks come from places that attract innovators and entrepreneurs who want to invent the future through fresh thinking. A permanent monument to this notion is on a bridge across the Charles River linking MIT to Boston, where the length is measured in "smoots." A smoot is the height of Oliver Smoot, who lay on the bridge while his fraternity brothers measured its length (364.4 smoots plus or minus one ear). (Smoot went on to a distinguished career as a lawyer and president of the ISO—International Organization for Standardization; his cousin George won a Nobel Prize.) Google uses the smoot as an optional unit of measurement in Google Earth.

Laugh and the world laughs with you, the saying goes. The healing properties of laughter have long been touted. One healthy lifestyle website claims: "Humor is infectious....When laughter is shared, it binds people together and increases happiness and intimacy. In addition to the domino effect of joy and amusement...humor and laughter strengthen your immune system, boost your energy, diminish pain, and protect you from the damaging effects of stress."

Of course, it's hard to be funny in grim times. Events of the past decade have depressed spirits: terrorism, financial crises, teenage bullying, high unemployment, storms dubbed "snowzilla" and "aquageddon," and devastating tragedies of tsunamis and earthquakes. Defiant CEOs at government hearings don't feel like laughing it up. Poking fun has given way to poking big holes in the social fabric through endless negativity. Popular media portray life as a Darwinian jungle of scarce resources in which only some are fit to survive, as in Survivor, The Apprentice and knockoffs.

Some days I think that we have a GNCD—a gross national comedy deficit. Proof point: While promoting humor in this column, I feel the need to be serious.

In the classic tradition, tragedy is apocalyptic; whatever one tries, the outcome cannot be altered. Comedy, in contrast, is hopeful. It involves ludicrous juxtapositions with never-ending possibilities for improvement. Humor helps us understand that things aren't always as they appear, they can shift shape or form, there are opportunities for change, and we're not trapped by past decisions.

A can-do nation like America cannot afford to be overrun with can't do/better-not-try humorless pessimists. A collective sense of humor would allow us to laugh at our pratfalls, correct them, and move on to a brighter future.

Entrepreneurs must believe in happy endings, not end games. Evidence suggests that creative thinkers with a good sense of humor could be laughing all the way to the bank.

Copyright © 2012 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

Rosabeth Moss Kanter holds the Ernest L. Arbuckle Professorship at Harvard Business School, where she specializes in strategy, innovation, and leadership for change. Her strategic and practical insights have guided leaders of large and small organizations worldwide for over 25 years. The former Editor of Harvard Business Review (1989-1992), Professor Kanter has been named to The Times of Londonlist of the "50 most powerful women in the world".

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