The organizational cost of insufficient sleep
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
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.1 1. Namni Goel et al., “Neurocognitive consequences of sleep deprivation,” Seminars in Neurology, 2009, Volume 29, Number 4, pp. 320–39; Ilse M. Verweij et al., “Sleep deprivation leads to a loss of functional connectivity in frontal regions,” BMC Neuroscience, 2014, Volume 15, Number 88, biomedcentral.com. 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,2 2. We define organizational health as the ability to align around a clear vision, strategy, and culture; to execute with excellence; and to renew a company over time by responding to market trends. 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.3 3. See Claudio Feser, Fernanda Mayol, and Ramesh Srinivasan, “Decoding leadership: What really matters,” McKinsey Quarterly, January 2015. What’s striking, in all four cases, is the proven link between sleep and effective leadership (exhibit).
Operating with a strong orientation to results
Solving problems effectively
Seeking different perspectives
5. Matthew P. Walker and Els van der Helm, “Overnight therapy? The role of sleep in emotional brain processing,” Psychological Bulletin, 2009, Volume 135, Number 5, pp. 731–48, apa.org/pubs.
. William H. Macey and Benjamin Schneider, “The meaning of employee engagement,” Industrial and Organizational Psychology, 2008, Volume 1, Number 1, pp. 3–30, my.siop.org/journal; and Steven A. Stumpf, Walter G.Tymon Jr., and Nick van Dam, “Felt and behavioral engagement in workgroups of professionals,” Journal of Vocational Behavior, 2013, Volume 83, Number 3, pp. 255–64, journals.elsevier.com/journal- of-vocational-behavior.
What organizations can do
Companies should embed sleep training in a broader approach to well-being that takes in other topics, notably exercise, nutrition, mindfulness, and energy management. Yet it can be daunting for leaders to go about changing a lot of behavior at once, so it’s important to allow time for new habits to stick.
Travel. Companies should encourage flexibility—for example, by allowing employees, if possible, to take an earlier plane (rather than an overnight “red eye” flight) to get a good night’s sleep before an important meeting.
Team working. Companies must increasingly be responsive 24/7, but this doesn’t mean that specific people should bear the brunt of the burden single-handedly. IT help desks in many global organizations have shown the way—shifting location every eight hours. Likewise, other groups should work to alleviate the pressure by creating “tag teams” of employees who seamlessly hand over the reins to other teams, in different time zones, at the end of their shifts. Phone calls and home-based videoconferences do run the risk of extending the workday but, used judiciously, can cut unnecessary travel-to-work time. Leaders should set an example by being mindful of local times (and the time preferences of the people involved) when scheduling global calls. Simply knowing the participants’ preferences can help reinforce a sleep-friendly culture.
Emails. A number of companies have imposed blackout times on work emails. A large European car business, for example, programs the smartphones of its nonmanagement employees to switch off work emails automatically between 6 p.m. and 7 a.m. In many companies, particularly knowledge-based ones, this would be disruptive and counterproductive—but provided there are overrides, such a policy can send a clear signal of management’s intent.
Work-time limits. Some companies known for a “long-hours culture” have been implementing rules to curb working very late at night. One major financial-services business, for example, specifically required its summer interns to leave the office before midnight each day to ensure that they were not subjected to “all-nighters.” This organization’s full-time employees have been told to stay out of the office from 9 p.m. Friday to 9 a.m. Sunday.
Mandatory work-free vacations. A US software company gives employees a $7,500 bonus if they follow two rules: (1) They have to actually go on vacation or they don’t get the money. (2) They must disconnect, and hence cannot work, on vacation.
‘Predictable time off’ (PTO). Leslie Perlow, a professor at Harvard Business School, introduced a good way to catch up on lost sleep: a planned night off, with no email, no work, and no smartphone. A large global consulting firm found that productivity went up when it tested this approach, which is now the basis for a company-wide program.
Napping rooms or pods. The image of a sleeping manager is easy to mischaracterize. Research has shown that a short nap of 10 to 30 minutes improves alertness and performance for up to two and a half hours.9 9. Amber Brooks and Leon Lack, “A brief afternoon nap following nocturnal sleep restriction: Which nap duration is most recuperative?,” Sleep, 2006, Volume 29, Number 6, pp. 831–40, journalsleep.org. Over half of the leaders in our survey wanted their businesses to imitate the large technology companies and telcos that have already successfully adopted sleep pods and nap rooms.
Smart technology. Companies should consider supplying (or at least informing their employees about) some of the gadgets and tools designed to improve sleep management. Examples include the f.lux application, which limits blue light on computers and iPhones, thereby boosting reduced levels of the sleep hormone melatonin. Other apps on the market provide individualized jetlag-minimizing schedules.
Organizations of the future
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.10 10. Leslie Kwoh, “When the CEO burns out,” Wall Street Journal, May 7, 2013, wsj.com. 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.
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