Why aggressive humour might pay for CEOs (unfortunately)

That humour has an immense bearing on human interaction is well studied in psychology. It is therefore all the more surprising to find that hardly any research hardly any research has looked at how humour works in top management communication. This is where our study comes in,  entitled “Good Fun or Laughingstock? How CEO Humor Affects Infomediaries’ Social Evaluations of Organizations,” published in the prestigious journal Academy of Management Review. In this study, we are developing a model that shows how the use of different types of humour by chief executive officers affects the way infomediaries such as journalists and analysts evaluate their companies.

Types of CEO humour and their impact

Based on previously conducted humour studies, we distinguish between four types of CEO humour. Two of them are positive:

• Affiliative CEO humour. The CEO makes fun of others in a friendly manner, putting them in a positive light. Former PepsiCo CEO Indra Nooyi provided an example when she spoke humorously in an interview about her struggle to balance family life and her position as top manager. She reflected on how a career in middle management coincides with one's children's teenage years, in other words with a time when children need their mother's support. "And that's the time your husband becomes a teenager, too," she said. In this case, her humour was directed at her husband, but in an affectionate, positive way.
• Self-enhancing CEO humour. The CEO elevates him or herself above their own position in a fun way. SpaceX/Tesla CEO Elon Musk offered an example. When asked by CNN what he had been doing at the Pentagon, he posted "Something about a flying metal suit..." on Twitter, associating himself with the superhero Tony Stark. With this funny remark he elevated himself above his own position.

Two types of CEO humour are negative:

• Self-defeating humour. The CEO pokes fun at their own weaknesses, thereby lowering their position. Ryanair CEO Michael O'Leary provided an example when asked whether he would soon retire. O'Leary retorted that no one having to live with him would put pressure on him to retire. This sort of humour is interesting in that it meets with social approval. Corporate communication consultants and leadership coaches advise senior executives to show weaknesses in order to establish closeness. We argue, however, that the circumstances are different with CEOs.
• Aggressive CEO humour. With this type of humour, the CEO disparages others by making fun of them at their expense. Elon Musk provides lots of examples for this type of humour as well. Interestingly, it appears to have negatively impacted the evaluation of his ability to deliver as a top executive only marginally. Although aggressive humour is not socially acceptable, it can in fact even strengthen the position of CEOs and raise expectations for the company's success.

Our key argument is that there are two central pathways through which CEO humour –depending on its type – affects social evaluations of organizations by infomediaries (e.g., journalists or analysts). First, CEO humour alters infomediaries’ state of mind, such as their mood or their perception of social closeness to the CEO. Second, CEO humour accommodates or violates deep-seated expectations of the general tasks and social functions of a CEO. The researchers argue that both forms of positive CEO humour arouse positive emotional states and accommodate CEO-role expectations. Thus, this CEO humour positively affects the way the company is perceived.

Let us be clear – we are in no way suggesting that CEOs should engage in aggressive humour. Rather, our intent is to explain why certain types of humour used by CEOs have a different effect than previously supposed.

Professor Andreas König

The effects of the negative types of CEO humour are especially intriguing, deviating from what we know about humour practiced by less senior leaders, and from what one would normatively desire. Practitioner-oriented literature typically recommends leaders to use self-defeating humour to create social closeness to followers. Such humour, which puts one’s own weakness in the spotlight, is also viewed favourably by society. Yet, self-defeating humour conflicts with central expectations as to the CEO’s role. In turn, CEOs engaging in this type of humour could negatively affect infomediaries’ evaluations. Even if we dislike it: The stock market and other audiences will likely punish CEOs who reveal weaknesses very often and put themselves down.

Aggressive CEO humour, in contrast, may pay for CEOs – even though it violates social norms, harms the CEO’s function as a role model, and disparages other people, at least when it comes to evaluations regarding a company’s competitiveness. The problem is that, regrettably, a sharp-elbow style of management continues to dominate in audiences’ minds. Thus – even though they may dislike a company and expect it to behave less appropriately when a CEO expresses aggressive humour – infomediaries likely expect CEOs who show assertiveness and dominance through aggressive humour to be better equipped to make their company stand out and win.

Let us be clear – we are in no way suggesting that CEOs should engage in aggressive humour. Rather, our intent is to explain why certain types of humour used by CEOs have a different effect than previously supposed.