Humor Drives Profits: The Creativity – Innovation Connection

Humor is good business. In fact, it’s critical to the creative, innovative process that drives strategic advantage in the marketplace. Humor is no longer a “nice to have” – it’s a competitive necessity. Success demands constant market innovation. Moreover, the most important motivation for employees isn’t money. Employees want to be valued and challenged at work. This means being able to use their creative talents in ways that allow them – and the business – to grow.

Humor and Creativity

Humor allows open, fluid dynamics to flourish. This fluidity creates innovative environments. But humor is defined too narrowly by most companies. Yes, humor is about jokes, fun events and competitive jibes, but this is only part of what humor is. Consequently, employees and bosses often do not see the connection between humor and their productivity. Without awareness of this critical relationship, employees and corporate culture cannot change. Let’s redefine humor as the ability to play. During creative play, people experience “flow time” – that uninterrupted time where productivity is at its peak and time goes by effortlessly. People need corporate encouraged playtime – innovation depends on it.

Play allows the brain to think without restrictions, to imagine outside of the box. Remember as kids, we brainstormed all kinds of ideas for costumes, imaginary friends, and games without restrictive limits? As adults we censor our play selves. Humor is openness to the world of possibilities. The creative process is fun and allows the best ideas to surface to the top. When you indulge the “humor brain” you are tapping into the creative center of the brain and generating the best quality ideas. It’s elegant biology, really.

Most people have the capacity to innovate. So why don’t they? The answer is both simple and complex: fear and lack of encouragement. Additionally, a fixation on outcomes rather than the creative process fails to reward risk-taking itself. Negative, toxic environments will also kill creative play and innovation – fast!

The 3M Factor: Walking the Talk

3M Corporation has become an innovation icon for over a century. Key to its success is its unwavering commitment to innovation: “Mistakes will be made (by giving people freedom to act autonomously), but the mistakes are not as serious in the long run as the mistakes management will make if it is dictatorial about how people do their jobs. Management that is destructively critical when mistakes are made kills initiative and it is essential that we have many people with initiative to continue to grow” (3M website).

One of several management practices that fosters this culture of innovation is “the 15 percent rule.” Under this rule, people spend 15% of their week on individual creative pursuits. This encourages people to take creative risks without fear of repercussions. Moreover, innovation is the impetus behind its profitability: 30% of 3M’s profits come from products that are less than 4 years old at any given time.

Innovation Audit

Below are 12 key components critical to a thriving innovative culture. How is your company doing?

  • Playfulness: Is it OK to have fun and to brainstorm? Are people over-stressed?
  • Attitude: How is the general attitude of most people? Optimistic? Pessimistic?
  • Humor: Is humor appropriate or not? Inappropriate or morose humor is a red flag.
  • Risk-taking: What happens when people fail? Is it a culture of blame? Who gets credit for ideas?
  • Autonomy: Do employees have some autonomy in how they go about doing their jobs?
  • Trust: Does the environment foster interpersonal trust or competition for too few resources?
  • Reward: How are people rewarded? Overall company goals, team goals or on individual objectives?
  • Commitment: Do people sense genuine commitment from executives to personnel growth?
  • Congruence: Do executives live the behavior extolled on mission statements, coffee mugs, and t-shirts?
  • Conflict: How is conflict managed during disagreements with others? Bosses? Does it get personal?
  • Resources: Does the company actively support and fund great ideas no matter where they originate?
  • Compensation: Are people compensated largely for company performance or individual performance?

Now What? What Companies Can Do To Effect Change

While a company cannot become creative overnight, there are several things that bosses and employees can do to regenerate their play muscles. And while some methods require little effort to implement, they do require changes in the corporate mindset. That takes time and commitment from executives and employees.

First, companies must embrace the value of creativity as a process – not as an outcome. Edison failed to create a working light bulb in his first 9,999 tries. When asked about his “failures,” he responded, “I get to go back and play some more.” Edison recognized the value of the creative process itself as the precursor to innovation. If the corporate focus is on the outcome (success vs. failure), the lesson and resulting creative growth are missed. The very act of engagement trains us how to think creatively. That’s invaluable.

Second, play and creativity should be integral to the productive culture. Introduce more brainstorming games into meetings, for example. Cultural values are handed top-down. If the boss doesn’t believe in the value of play as a creative process, there is little chance the concept will make it down the food chain. People need to see that their bosses not only sanction the behavior, but also actively encourage it by creating support for it. If not, playtime becomes nothing more than ‘management speak.’ There’s a reason Dilbert skyrocketed to fame! This is lethal because it erodes trust and productivity.

Another way to introduce play is to make brainstorming sessions visually creative using storyboarding and storytelling to map out a vision. Another variation includes bringing improvisation exercises into creative sessions. Improvisation reinforces spontaneity – allowing humor and creative energies to flow uninhibited.

Third, align incentives to support the activity through measured management objectives. No one wants to test a theory based on mug quotations – it’s like walking a tightrope without a net. Build incentives into the process and people will take calculated risks toward innovation. One way to do this is to allow people a certain number of hours each week to be spent in a creative way on something work-related – similar to 3M’s “15 percent rule.” Creative freedom will engender both trust and innovative solutions that benefit the company. Reward innovation with kudos, acknowledgements, and formal peer recognition when it happens or it won’t catch on. This doesn’t necessarily mean money. Tie recognition to something other than ideas that are selected. Never blame people for failure of ideas. The backlash will be a failure to generate any new ideas. Mistrust hurts employee morale and that hurts innovation.

Another important approach is to encourage play by promoting group cooperation rather than inter-group competition. Aligning pay to new product ideas generated and vetted regardless of where they originate is one way to accomplish this. Innovation teams can help, but be careful of team “groupthink.” Balance this tendency by allowing people individual time for play and then give them time to vet ideas as a team.

Finally, managers must make productive playtime a consistent part of thought leadership and strategic planning. This institutionalizes the value of the creative process in innovation.

By doing these things, humor can become vital parts of an innovative, successful corporate culture.


By Kathy Klotz-Guest, MA, MBA. Founder of Powerfully Funny (, Kathy’s mission is to help individuals and organizations use humor to drive business results! She combines 14 years of strategic marketing with a background in sketch comedy. Find out how to add the innovative power of humor to your company: Call 408.578.8040 or email