Business View: the "sleeping" business imperative

A good night's sleep makes a real difference. If you are sceptical, read on and let me persuade you of the importance of sleep, both in terms of quantity and also quality.

According to a growing body of research, there is a direct link between performance and good (and bad) sleep. It is reported that disasters, such as Chernobyl and the Challenger space shuttle disaster, have been thought to be partly due to poor sleep. Translate that into the "ordinary"” workplace. What does that mean both for business performance and for the health of those working within those businesses?

I recently had the pleasure of discussing the issue of sleep and "sleepiness" with Professor Vicki Culpin, of Ashridge Business School. Vicki's explanation of the importance of good quality and quantity of sleep resonated. What she had to say was shocking, both in terms of the impact of "sleepiness" on business performance and also the impact on health. The results of this research are slowly transforming not only the wellbeing agenda beyond the traditional focus on subjects like stress management, mindfulness and work life balance but also the way that business approaches the effect of "sleepiness" on performance.

There are some individuals who are physically hard wired not to be negatively affected by poor sleep. True "short sleepers" are the exception rather than the norm. Research has found that of every 100 people who claim to be "short sleepers" only around five actually are. However, most adults need seven or more hours of sleep per night and are unable to function well after less than six hours of nightly sleep.

Why do many more people think they can function on much less sleep than health experts suggests? What is likely, and this is at the heart of identifying how this issue can be tackled, is the existence of a macho culture, a lack of self-awareness and the development of coping strategies; all of which stand in the way of first recognising that there is an issue and second of deciding how best to tackle the issue.

Assume you arrive in the office early in the morning. You feel refreshed after your eight hours good quality sleep but you are aware that some of the team at a firm you instructed have been working all night on a deal that has yet to close. It is one of those adrenalin-fuelled deals that is taking the business to the next level. Complex, strategically important issues are yet to be resolved so the team have been hard at it, working on solutions, negotiating the finer points, drafting and turning round the agreements that are about to be reviewed.

Tempted to applaud their commitment and dedication? Absolutely you should, recognising that hard work and effort is important and will keep the team motivated. But what risks has it exposed the business to?

Vicki's research on the effects of sleep deprivation brings the issue of risk into sharp focus. Let us assume those team members have not slept for at least 24 hours and there is little prospect of any rest any time soon. What is the effect of that sleep deprivation on them?

According to Vicki, the effect on performance can be the equivalent of having drunk four glasses of wine. Now alcohol in most workplaces is unlikely to be acceptable, particularly where it has replaced the morning latte. So, why would sleep deprivation that creates the same effect be any more acceptable? As a client, how would you feel about the ability of people who had drunk four glasses of wine to deal with the complex, strategically important issues that kept them up all night?

There are cognitive effects of lack of sleep. Relatively little "lack of sleep" can have a dramatic effect. Lack of sleep can reduce alertness by up to 32% and, when I say relatively little lack of sleep, it really is relatively little.

How much sleep reduction are we talking about? It is not night after night of poor sleep as you might assume. Losing just 90 minutes sleep in a single night can have a dramatic effect on alertness. Let us translate that into the workplace. Assume you have a team of three lawyers. The impact of only 90 minutes lost sleep each on that small team where alertness is reduced by up to 32% equates to working with one less person on the team.

It is not just alertness that is affected: concentration is impacted, problem solving and judgment are impaired and the ability to assess risk impeded. Creativity and innovation are also affected. In fact, it is exactly the skills we most value in advisors that are significantly impeded by poor sleep.

The implications of lack of sleep can go beyond a lack of productivity, leading to behavioural changes that can impact in the workplace.

As with drunkenness, sleep-deprived behaviour can become erratic and out of character, as normal emotional intelligence is scuppered by lack of sleep. Interaction with others may lead to inappropriate, perhaps even discriminatory or bullying, behaviour. On the psychological side, our communication and social skills are adversely affected.

Ironically, the research shows that the amount of sleep reported per night by managers decreases as they gain seniority. In practice, this can mean that the emotional intelligence of managers and leaders decreases when they need it most.

Arianna Huffington blamed Donald Trump's behaviour, including angry outbursts during the Republican presidential nomination contest, on sleep deprivation. She describes the Republican candidate as "Exhibit A of chronic sleep deprivation". Trump himself talks of sleeping for only four hours per night and who can forget Margaret Thatcher's assertion that sleep was for "wimps"?

Legal teams are particularly vulnerable to a culture of long hours and little rest, but similar considerations apply far more widely than risks relating to legal work product. Sleep deprivation negatively impacts all decision-critical functions, and can also affect the bottom line in other ways.

Not only is productivity affected by "tired" employees who are not functioning efficiently but there are those employees that fail to turn up to work or are late for work. According to research, non-attendance and lateness are equivalent to the loss of more than 47 million hours of work or, to put it in monetary terms, lost productivity of £453 million.

The Health and Safety Executive (HSE) offers a variety of tools aimed at managing fatigue in shift workers, but the principles will hold good in many workplaces. Accidents and injury can be caused by sleep loss. According to the HSE, fatigue has been implicated in 20% of accidents on major roads and costs the UK £115-240 million in terms of work accidents.

However, perhaps the biggest impact of sleep deprivation is personal. We know chronic sleep deprivation can lead to significant and serious physical conditions such as heart disease, stroke, general cardio vascular issues, type 2 diabetes and obesity. Lack of sleep can also lead to the production of the stress hormone cortisol, which can in turn result in high blood pressure, loss of bone density and the increased likelihood of immunosuppression.

In an extreme example, Lloyds Bank saw almost £1 billion wiped off its market value when its former CEO, António Horta-Osório, was medically ordered to take a leave of absence in the wake of extreme sleep deprivation. In 2011, Horta-Osório spoke publically about the effects of extreme sleep deprivation, and described it as "torture". He returned to work announcing that he would do things differently, including transferring some of his responsibilities and with a commitment to rebalancing his work and life. His story provides a very powerful example of the personal impact of sleep deprivation and also highlights the financial and reputational damage to organisations that can be caused by lack of sleep.

What can you do as a manager to combat this issue? What can individuals do to help themselves?

Sleep should be on your organisation's wellbeing agenda to raise awareness and encourage practices that support healthy sleep. The first step is to reflect on the findings about managers and get enough sleep yourself. Be a good role model, delegate more and better, find out what would help your team.

Be creative: are there flexible working practices that could be considered? Are your employees "larks" or "owls"? Altering someone's hours might have a positive impact on performance. Is a "power nap" realistic?

Looking beyond the in-house team, do you ask suppliers of legal (and other) services about their wellbeing policies? Should this be something you build into your next panel review?

With your advisor hat on, the organisation needs to consider how working patterns impact on sleep, whether presenteeism exacerbates the problem, and how the obligations to ensure there are safe systems of work sit with understanding the issue of sleep deprivation.

Exercise has been shown to improve the quality of sleep. Consider the possibility of corporate gym membership as part of a wellbeing initiative.

And what can we do to help ourselves? Recognising that there is an issue is only the first step. There are a range of things that we can do to ensure more and better sleep:

The NHS has some useful resources for further reading, including an introduction to insomnia and guidance on the risks of lack of sleep.