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Clique emails imply impending trouble

22 February, 2011

Changes in an organisation's email traffic are a potential predictor of looming crises, an analysis of emails leading up to the infamous demise of Enron Corporation found recently.

Researchers from the University of Sydney's School of Civil Engineering analysed more than a quarter of a million emails from the now defunct energy, commodities and company, spanning three and a half years leading up to its 2001 bankruptcy.

The researchers found changes in emails patterns, a representative gauge of an organisation's communication networks, started changing in the 12 months leading up to the company's demise.

Around this time, staff began interacting more frequently within small groups of peers more rather than relying on messages emanating from the company's upper echelons.

"We found it went from a highly centralised network to a largely decentralised and distributed system," says Professor Liaquat Hossain, co-author of Understanding Communication Network Cohesiveness During Organisational Crisis.

"We saw structural changes in email communications in the 12 months before the crisis intensified as its CEO Jeff Skilling resigned and it started reporting earnings losses.

"As Enron approached disintegration in late 2001 more people communicated with their colleagues and at a higher frequency.

"During this peak crisis period, there was also a jump in the number of cliques forming within the company. This increase in communication is consistent with organisational theory that purports cohesiveness is greater under conditions of great anxiety."

Professor Hossain says the paper's findings suggest changes in communication patterns can predict potential crises in an organisation.

"If an entity's email traffic is monitored - without breaching privacy - we think it's possible to detect from changes in communications patterns perceptions of an emerging crisis.

"By identifying this early an organisation is better able to reshape its strategy in order to prevent a perceived crisis evolving into a debilitating one."

Source: University of Sydney

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