The organizational cost of insufficient sleep.
By Nick van Dam and Els van der Helm
February 2016
Sleep-awareness programs can produce better leaders.
Thou hast no figures nor no fantasies,
Which busy care draws in the brains of men;
Therefore thou sleep’st so sound.
—William Shakespeare, Julius Caesar
In the passage above, the playwright’s tragic antihero Brutus enviously reflects on the timeless truth that people without worries and anxieties (in this case, his servant Lucius) generally enjoy the most peaceful and uninterrupted rest.
Some senior business people skillfully and consciously manage their sleep, emerging refreshed and alert after crossing multiple time zones or working late into the night. Yet we all know caffeinated and careworn executives who, after hours of wakeful slumber, struggle to recall simple facts, seem disengaged and uninspired, lack patience with others, and can’t think through problems or reach clear-cut decisions.
Sleep (mis)management, at one level, is obviously an individual issue, part of a larger energy-management challenge that also includes other forms of mental relaxation, such as mindfulness and meditation, as well as nutrition and physical activity. But in an increasingly hyperconnected world, in which many companies now expect their employees to be on call and to answer emails 24/7, this is also an important organizational topic that requires specific and urgent attention.
Research has shown that sleep-deprived brains lose the ability to make accurate judgments. That, in turn, can lead to irrational and unjustified claims such as “I do not need sleep” or “I’m doing fine with a couple of hours of sleep.” Our own recent survey of executives (see sidebar “Highlights from our survey of 196 business leaders”) demonstrates how many of them remain in denial on this point. Yet our respondents contradicted themselves by suggesting that companies should do more to help teach leaders the importance of sleep.
On this point, they are right. Many companies do not do enough to promote healthy sleep, which can have serious consequences. As we will demonstrate, sleep deficiencies impair the performance of corporate executives, notably by undermining important forms of leadership behavior, and can thereby hurt financial performance. This article will demonstrate and explore the link between sleep and leadership behavior before discussing solutions that can improve both individual well-being and organizational efficiency and effectiveness.
The link to organizational leadership
The last part of our brain to evolve was the neocortex, responsible for functions such as sensory perception, motor commands, and language. The frontal part of the neocortex, the prefrontal cortex, directs what psychologists call executive functioning, including all the higher-order cognitive processes, such as problem solving, reasoning, organizing, inhibition, planning, and executing plans. These help us get things done.
It’s long been known that all leadership behavior relies on at least one (and often more than one) of these executive functions and therefore, in particular, on the prefrontal cortex. Neuroscientists know that although other brain areas can cope relatively well with too little sleep, the prefrontal cortex cannot.1Although basic visual and motor skills deteriorate when people are deprived of sleep, they do not do so nearly to the same extent as higher-order mental skills.
Previous McKinsey research has highlighted a strong correlation between leadership performance and organizational health,2itself a strong predictor of a healthy bottom line. In a separate study of 81 organizations and 189,000 people around the world, we have found that four types of leadership behavior are most commonly associated with high-quality executive teams: the ability to operate with a strong orientation to results, to solve problems effectively, to seek out different perspectives, and to support others.3What’s striking, in all four cases, is the proven link between sleep and effective leadership (exhibit).
Operating with a strong orientation to results
To do this well, it’s important to keep your eye on the ball and avoid distractions, while at the same time seeing the bigger picture—that is, whether your company is heading in the right direction. Scientists have found that sleep deprivation impairs this ability to focus attention selectively. Research shows that after roughly 17 to 19 hours of wakefulness (let’s say at 11 PM or 1 AM for someone who got up at 6 AM), individual performance on a range of tasks is equivalent to that of a person with a blood-alcohol level of 0.05 percent. That’s the legal drinking limit in many countries. After roughly 20 hours of wakefulness (2 AM), this same person’s performance equals that of someone with a blood-alcohol level of 0.1 percent, which meets the legal definition of drunkenness in the United States.4
