Changing email pattern can predict crisis in company

SYDNEY - Changes in a company’s email traffic foreshadow a looming crisis, an analysis of now-dead Enron Corporation’s electronic correspondence has revealed.

Researchers at the University of Sydney’s School of Civil Engineering analysed more than a quarter of a million emails from Enron, over three-and-a-half years leading up to its 2001 bankruptcy.

“We found it went from a highly centralised network to a largely decentralised and distributed system,” says Professor Liaquat Hossain, study co-author, according to a Sydney statement.

“We saw structural changes in email communications in the 12 months before the crisis intensified as its CEO Jeffrey Skilling resigned and it started reporting earning 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,” said the statement.

“This increase in communication is consistent with organisational theory that purports cohesiveness is greater under conditions of great anxiety.”

Hossain said the findings suggested changes in communication patterns can predict potential crises in an organisation.