You've probably heard that sleep deprivation is bad for you. One study found it can help make you fat, and another that it reduces your mental performance as much as being drunk. But did you know that being exhausted all the time doesn't just dent your health and your productivity? It can also make you paranoid.

That's the finding of new research out of UC Berkeley, which is particularly bad news for underslept leaders. The study involved asking 17 adults to look at pictures of a variety of facial expressions while having their brains scanned. They viewed the images while well rested and then they looked at them again after being awake for 24 hours. The fMRI images of the subjects' brains revealed that, when exhausted, they were terrible at distinguishing friendly faces from threatening ones.

Sleep deprivation dents your EQ.

"[Study subjects] failed our emotional Rorschach test. Insufficient sleep removes the rose tint to our emotional world, causing an overestimation of threat. This may explain why people who report getting too little sleep are less social and more lonely," explained senior author and psychology professor Matthew Walker.

The research team is worried about what these results might mean for the decision-making of soldiers and police who work odd hours and whose jobs require them to make subtle distinctions between friend and foe, threatening and nonthreatening. And while the implications of the findings in these domains are indeed worrisome, the study isn't exactly good news for business leaders either.

The ability to interpret and respond to your team's emotional cues is key to good management. As Walker puts in, "Recognizing the emotional expressions of someone else changes everything about whether or not you decide to interact with them, and in return, whether they interact with you." Lose the ability to decide how and when to engage your colleagues based on their state of mind and you've essentially lost the basis of quality leadership.

So do I really need to lay out the takeaway for you? It's not complicated and you've no doubt heard it before--get enough sleep already! Though apparently, many of us find it hard to take this advice to heart. "These findings are especially worrying considering that two-thirds of people in the developed nations fail to get sufficient sleep," Walker comments.

Are you among the sleep-deprived two-thirds?