If you can make an earnings analyst laugh, you've got it made!

What do you get when you put four academics get together to write about humor?

A 50-page paper that features charts, graphics, squiggly characters -- and whole lot of common sense.

The topic, as the title “Analysts’ and Managers’ Use of Humor on Public Earnings Conference Calls states,” focuses on how people who report on and question earnings reports can make light of their subject in ways that heighten understanding.

Here are some examples of humor the authors cited:

  • “That was a math question, not an essay question.”
  • “Thanks for re-asking the question ... Bill asked such a long question, I’d forgotten that part.”
  • “I only have 20-30 questions for you.”
  • “Thank you for calling on me last, so I can ask multiple questions.”

Hardly stuff that would get you a stand-up comedy gig, but they are examples of levity that create a rapport between the one reporting the earnings (the manager) and the one questioning it (the analyst).

The authors, Andrew Call, Rachel Flam, Joshua Lee and Nathan Sharp, don’t advocate turning earnings calls, which serve as a barometer of the financial health of a public company, into a skit from "Saturday Night Live." Rather, they find that humor leavens bad news, invites longer time for questioning and more opportunities for follow-up. The reason for such receptivity lies in the fact that humor makes people more likeable and therefore more engaging.

Rapport facilitates connection. Earnings calls by nature tend to be rather dull affairs, which on face value may be tolerable. But when a company has issues, or analysts need to dig more deeply, rapport becomes essential. A manager who is defensive does his company no favors by appearing as such. Likewise, an analyst who is overly aggressive in his questioning only exacerbates the tension.

Humor by nature is poking fun at a situation. When used in ways that illuminate absurdity or difficulty, it can lead to greater understanding. In that way humor in business can be an effective tool.

Andrew Tarvin, author of "Humor That Works: The Missing Skill for Success and Happiness at Work," defines “humor that works as: a way of working that is different, effective and fun.” Tarvin’s definition places humor into the context of something that helps us rather than harms us."

Since humor often manifests itself through our words. Tarvin, a working comedian, advocates that in order to make humor effective in our communications it must have three attributes.

  1. Simplicity. If the set up takes 10 minutes, says Tarvin, you’ve already lost your audience. Get to the point quickly and then plant the hook of your laugh. Simplicity works when everyone is in on the joke because it lampoons a familiar character or situation.
  2. Relevance. Link humor to something going on in your company, not the situation in East Timor, although sometimes people at work would rather be in East Timor than in their cubes at work. Make light of situations that co-workers will find silly -- cost-cutting, reorganizations, management shuffles, elevator wait time, etc.
  3. Fun. The point of humor is ultimately to lighten the mood. Go for the smile, the grin or the laugh. Even a groan will do. Anything you can do to make people sit up and take notice will facilitate levity.

If you can make your humor that people find simple, relevant and fun -- as well as non-hostile -- you will bring a note of joy to the workplace and maybe even a bit more understanding.

There is one additional finding from the paper on humor in earnings calls worth noting. The authors conclude that when humor is in play, analysts tend to give more favorable stock-pick recommendations. So, who says humor doesn’t pay? Or, in other words, a little laughter never hurts.

 

John Baldoni is an internationally recognized leadership educator and executive coach. In 2018, Trust Across America honored him with a Lifetime Achievement Award in Trust. Also in 2018, Inc.com named Baldoni a Top 100 Leadership Speaker. In 2019, Global Gurus ranked him No. 9 on its list of top 30 global experts, a list he has been on since 2007. In 2014, Inc.com named Baldoni to its list of top 50 leadership experts. Baldoni is the author of 14 books, including“MOXIE: The Secret to Bold and Gutsy Leadership” and his newest, "GRACE: A Leader’s Guide to a Better Us." Learn more about why he wrote "GRACE" in this short video.

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