Hidden Patterns – Enron Email Predicted Collapse

Remember Enron?

Scientists recently gleaned valuable information from emails sent by its employees in the 18 months prior to the company’s collapse. NewScientist reported that two researchers at the Florida Institute of Technology assessed 517,000 emails sent to approximately 15,000 employees at the now defunct energy company.

The study, which did not look at the content of emails, only the numbers sent and the patterns of senders and recipients, showed that the most significant changes in employee’s behavior occurred one month prior to the company’s collapse.

The data showed that “email cliques”, a group in which every member has had direct email access with another member, jumped from 100 to almost 800 around November 1, 2001, one month prior to the company’s fall. This suggests that in stressful times, people talk more with people who they feel more comfortable with, and less with people who they don’t.

The Federal Energy Regulatory Commission made Enron’s emails public in 2003, when it was conducting an investigation of the company. Such a large sample of emails had previously never been available due to privacy concerns and regulation. This provided scientists a unique opportunity.

This is not the first time that researchers looked to Enron for clues on email patterns and employee behavior.

Back in 2005, Gina Kolata of the New York Times reported on similar studies conducted by computer scientists at universities in the United States and Canada.

These studies used Enron emails to test theories on how email communication reflects group dynamics and hidden social structures within an organization. A scientist at Carnegie Mellon University offers that email communication can reveal informal organizations within a company that may underlie “unofficial” power structures that exist outside of the defined corporate hierarchy, similar to the “cliques” theory mentioned above.

It all sounds a bit like high school.

CNET News, in 2003, reported on a study by two scientists at Hewlett-Packard using emails from within that organization. They too discovered that there were informal communities within organizations that came about when people needed to communicate across departments or work together on projects.

Such studies suggest interesting patterns in leadership and power that are not necessarily defined by an organization. Identifying these leaders and organizations might be useful in improving communication and productivity. Or, it might signify shifts in stability or stress, such as in the case of Enron.

It is interesting to think about how human social patterns factor into the workplace and transfer to electronic communication. Shifts in employee interaction-including electronic interaction-can signify very important things.

Future email studies will most likely be few and far between, considering privacy regulations. However, companies might encourage their employees to assess their email patterns using analytics tools, which are built into software such as Xobni, to reveal the “cliques” that they are a part of.

Then, the company can elect a prom king.

1 Response to “Hidden Patterns – Enron Email Predicted Collapse”

  1. 1 John W June 25, 2009 at 10:01 am

    Trampoline Systems has a social network analysis tool called Enron Explorer to look at the emails described in this post. http://www.enronexplorer.com/

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