Kenneth Andersson FOR HBR

In our hyper-connected, 24/7 world, many of us are losing sleep — literally. Our own survey of more than 180 business leaders found that four out of 10 (43%) say they do not get enough sleep at least four nights a week. Such sleep deficiencies can undermine important forms of leadership behavior and eventually hurt financial performance. This article will explore the link between sleep and leadership before discussing solutions that can improve both individual well-being and organizational efficiency and effectiveness.

The link between sleep and 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 processes 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. Basic visual and motor skills deteriorate when people are deprived of sleep, but not 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 robust bottom line. In a separate study of 81 organizations and 189,000 people around the world, we found that four types of leadership behavior are most commonly associated with high-quality executive teams: operating with a strong orientation to results, solving problems effectively, seeking out different perspectives, and supporting others. What’s striking in all four cases is the proven link between sleep and effective leadership.

Operating with a strong orientation to results. To do this well, it’s important to focus and avoid distractions while at the same time seeing the bigger picture — that is, whether your company is heading in the right direction. Sleep deprivation impairs the ability to focus attention selectively: Research shows that after roughly 17 to 19 hours of wakefulness (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%. 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%, which meets the legal definition of drunk in the United States.

Solving problems effectively. Sleep is beneficial for a host of cognitive functions that help us solve problems effectively, including insight, pattern recognition, and the ability to come up with innovative and creative ideas. One study has shown that a good night’s sleep leads to new insights: participants who enjoyed one were twice as likely to discover a hidden shortcut in a task as those who didn’t. Likewise, an afternoon nap has been found to aid creative problem solving: subjects who took a nap after struggling on a video game problem were almost twice as likely to solve it as subjects who had remained awake. Other research has established that creative thinking is especially likely to take place during dream sleep, enhancing the integration of unassociated information and promoting creative solutions.

Seeking out different perspectives. A wealth of scientific studies have highlighted the impact of sleep on all three stages of the learning process: before learning, to encode new information; after learning, in the consolidation stage, when the brain forms new connections; and before remembering, to retrieve information from memory. These processes are critical to the ability to seek, encode, and consolidate different perspectives. Another important consideration is the ability to weigh the relative significance of different inputs accurately, to avoid tunnel vision, and to reduce cognitive bias. Sleep has been shown to improve decision making in such situations — in tasks that mimic real life, for instance, which require integrating multiple emotional responses. Science supports the commonly heard advice that rather than making an important decision or sending a sensitive email late at night, you should sleep on it.

Supporting others. To help other people, you must first understand them. Doing so may require interpreting the emotions on their faces or their tone of voice. But in a sleep-deprived state, your brain is more likely to misinterpret these cues and overreact to emotional events, and you tend to express your feelings in a more negative manner and tone of voice. Recent studies have shown that people who have not had enough sleep are less likely to fully trust someone else. Another experiment has demonstrated that employees feel less engaged with their work when their leaders have had a bad night of sleep.

What organizations can do

How can organizations improve the quality and efficiency of sleep to ensure that their leaders attain — or recapture — the highest performance levels? At McKinsey, we’ve been working on this issue with our own colleagues as well as with business leaders (look here for a deeper examination of the problem and solutions). Among our recommendations are these two:

Develop training programs focused on increasing awareness and creating long-lasting behavioral change. Our experience is that blended learning programs on the importance of sleep can have a positive effect on well-being.

Evaluate and rework company policies to ensure that they encourage — or at least don’t discourage — a good night’s sleep. Look at policies covering travel, email (e.g., blackout time on email, after which no emails can be sent), team working (creating tag teams that enable employees to hand work to each other across time zones), work-time limits (setting limits on hours or creating blackout periods), mandatory work-free vacations, predictable time off, napping rooms, and smart technology that improves sleep management.

As we are the first to admit, our own people do not always practice what we preach. In any case, certain types of organizations cannot implement these ideas without an accompanying change in the underlying culture.

Beyond having more rested and therefore more effective leaders, another argument for focusing on sleep is that it prevents burnout in leaders. A recent Harvard Medical School study of senior leaders found that 96% percent reported experiencing at least some degree of burnout. One-third described their condition as extreme. There is now a large body of evidence on the bi-directional relationship between sleep and stress: a lack of sleep creates heightened emotional reactivity, and the experience of stress results in worse quality of sleep. In addition, poor sleep has been found to be a major predictor of reduced engagement at work. It’s time for organizations to find ways of countering the employee churn, lost productivity, and increased health care costs resulting from insufficient sleep.