The organizational cost of insufficient sleep

April 16, 2021

Here is an excerpt from another “classic” article, one written by Nick van Dam and Els van der Helm for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out others, learn more about the firm, and sign up for email alerts, please click here.

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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. Although 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, itself 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. What’s striking, in all four cases, is the proven link between sleep and effective leadership (exhibit).

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Much attention has been focused on the importance of sleep for top-performing athletes, musicians, and even politicians. Expert violinists, for example, have cited practice and sleep as two of the most important drivers of performance. (One study shows that the top performers consistently take a nap and get over half an hour more sleep than their less well-regarded peers do.) Former US president Bill Clinton once admitted, “Every important mistake I’ve made in my life I made when I was tired.” Business people have often lagged behind others in both their willingness to acknowledge the issue and their readiness to act on it.A recent Harvard Medical School study surveyed senior leaders and found that 96 percent reported experiencing at least some degree of burnout. One-third described their condition as extreme. It’s time for organizations to find ways of countering the employee churn, lost productivity, and increased healthcare costs resulting from insufficient sleep. If it is true that some millennials care less about high salaries and more about work–life integration, the next generation of employees will demand solutions even more strongly.* * *Here is a direct link to the complete article.

For a related article by these authors, see “There’s a proven link between effective leadership and getting enough sleep,” on the Harvard Business Review website, hbr.org.

Nick van Dam is McKinsey’s global chief learning officer and a principal in its Amsterdam office, where Els van der Helm is a specialist.

 

 

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