Humor in leadership is not merely a way to lighten a meeting. The ability to laugh at one’s own mistake signals whether a manager can tolerate disagreement and a temporary challenge to authority. The problem begins when people around the leader learn to respond according to the leader’s mood and uncomfortable facts stop moving upward. A healthy organization therefore needs people who can safely challenge authority—sometimes with an argument and sometimes with a well-aimed joke.

Humor is easily classified in management as a soft addition to corporate culture. INSEAD, however, also interprets it as an indicator of a person’s relationship with their own power.

The higher a leader stands, the less reliable the feedback they may receive about themselves. Subordinates learn when it is safe to disagree, which opinions the boss likes to hear and how the leader reacts to their own mistakes. In the extreme, the room laughs because the boss is laughing, not because the situation was actually funny.

The ability to laugh at oneself is therefore not about being entertaining. It shows whether a person can tolerate a moment when they do not look perfect and do not have full control.

INSEAD recalls the historical role of the court jester: someone who could tell a powerful person an uncomfortable truth in a way that others were not allowed to. Modern organizations need an equivalent function, though obviously not the same job title. It can be performed by trusted advisers, independent board members, colleagues or others who have enough psychological permission to tell leadership that it is wrong.

For management, this is a question of information quality. If a leader surrounds themselves only with people who confirm their judgment, they gradually lose access to part of reality. The greater their authority, the more expensive that information isolation can become.

Humor can also work in the opposite direction. Sarcasm and ridicule directed downward use hierarchy against the weaker person. A subordinate cannot defend themselves as freely as a superior, and the phrase “it was only a joke” does not remove the power imbalance.

INSEAD distinguishes relationship-building humor, humor that helps people cope with adversity, self-deprecating humor and aggressive humor. For leaders, it is especially important to distinguish between the ability to laugh at themselves and the need to turn somebody else into the target.

A practical test may be the last time someone openly told the leader that their proposal did not make sense. If the leader cannot remember such a situation for a long time, the explanation may not be the exceptional quality of their decisions.

Organizations need not only mechanisms for escalating problems but also a social environment in which authority can be safely disrupted. Humor is one indicator of whether such an environment actually exists.

KEY TERMS

• Critical challenge: A safe opportunity to question the opinion or decision of a person with greater authority.
• Self-irony: The ability to acknowledge one’s own imperfection without losing self-respect or becoming defensive.
• Leadership information isolation: A state in which leaders mainly receive views that confirm their expectations.
• Aggressive humor: Sarcasm, mockery or ridicule used as a tool of social dominance.