A Problem Worth Losing Sleep Over

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Signe Spencer is a senior consultant at Korn Ferry who focuses on all aspects of competency research.

There was a time when the idea of getting eight hours’ sleep was, believe it or not, an accepted part of life. Doctors recommended it. Executives practiced it. This was, of course, a long, long time ago.

Nowadays you have to ask yourself what successful business leaders sleep that long? (If they do, they certainly wouldn’t brag about it.) Instead, we all know the expected routine of the 21st century: exhausting hours on planes, crack-of-dawn conference calls and midnight texts that shove sleeping way down the list of priorities.

What we know about this sleepless life is how bad it is for our health. In fact, one well-publicized study by the University of Michigan dubbed it a “global sleep crisis,” while some health experts put the issue right up there with obesity and smoking. Much is also being said about the dangers of drowsy driving.

But there’s another kind of risk to sleeplessness that barely gets any attention. It’s the risk to the very companies that are driving all these executives to pull all-nighters. Indeed, this is actually it’s own kind of crisis, with billions of dollars at stake at major corporations and the ultimate success at smaller ones. Wake up! I’ve jotted down a few of the effects:

1. Diminishing returns

It isn’t the most dramatic result, but let’s think through the whole idea of why we are putting in extra hours. To get more done, right? But many studies show that when people routinely work very long hours, fatigue and mental fog set in and productivity per hour drops—for all the hours, not just the “extra” ones. So that’s strike one against the businesses that encourage the extended labor, since they probably aren’t getting any extra value.

2. Less strategic thinking

This is a big one. Both acute and chronic sleep deprivation cause losses of higher and longer-term cognitive functioning. In business terms, strategic thinking diminishes. This leads to more reactive, shorter-term thinking. It means neglecting the longer-term and wider-perspective strategic thinking that provides significant added value in leadership roles.

We see this in our own deep interviews of executives: Often their thinking is simply not as strategic or forward-looking as their jobs require. Taken to extremes, the leader’s judgment can be impaired, or they will prioritize short-term work pressures over long-term health and personal consequences, creating a permanent mind-set of short-term planning that hurts the business.

3. Negative impact on the team’s ability to perform 

The flattening of the organization and years of layoffs have left a lot of firms with classic type-A leaders focused on performance measures and competition. When stressed and tired, this group tends to follow a pattern of overly directive leadership. (Directive is the “do what I tell you, now!” style but with little context or explanation, and often with an irritable tone). That style has value in small doses and in a crisis, but overuse leads to subordinates fearing their leader and avoiding making decisions or taking initiative. The domino effect on the whole company grows as the subordinates’ value diminishes—and the leader’s stress from that grows.

4. Loss of emergency reserves

If leaders are already stretched to the limit, there is no “emergency reserve” to call on when a real crisis occurs. The business then has little spare executive capacity to address the crisis well, or everything else gets dropped in a hurry. Mishandled crises can seriously damage, or even destroy, the business.

5. Executive turnover

Lack of sleep can lead to burnout, serious health problems, strained family relationships and, in extreme cases, a need to step away from the job. While this is a serious personal loss, it also creates direct business costs from excess churn in the executive suite. There are also lost opportunities during the changeover. In addition, some of our clients hear talented junior people express a reluctance to advance, saying to senior executives, “I look at your life and I don’t want it.”

People assume that “discretionary efforts” on the part of successful employees means working more hours and forgoing sleep. But that isn’t necessarily the case. Discretionary effort can mean using your time wisely, being fully “there” when you are at work. It can mean making the mental effort to prioritize your work strategically, not just do whatever comes across your desk. It can be taking the risk to speak up and advance a new idea. And it extends to outside the workplace—causing many to mull over work problems instead of relaxing.

Put it all together and it’s enough to keep us awake at night.