How do you tell when a company will fail? Watch email habits

Wed Jun 24, 2009 12:56PM EDT

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Think about your emailing patterns at work: If you work for a healthy, robust company (there are still a few of those around these days, right?), chances are you communicate with a wide range of people throughout the organization, part of a free-flowing exchange of ideas that, more likely than not, management openly encourages.

But when things start to go south, the number of people you interact with starts to shrink. Or, more accurately, "email cliques" begin to develop, as workers begin email chains where they regularly contact only a subset of other employees, and those messages are rarely longer shared with the rest of the company. It's possible that the development of such cliques can be an indicator of additional trouble ahead.

The findings come from the Florida Institute of Technology in Melbourne, which analyzed the email patterns of that most famous of defunct companies, Enron. A month before Enron's notorious demise, the researchers found that email cliques rose from 100 to 800 identifiable groups about a month before the company went under. Interestingly, the study didn't look at the content of the emails -- they could just as easily have been about lunch plans as about the fate of senior management -- instead looking merely at how cliques develop as a crisis deepens. But the implication is clear: Did the employees know ahead of time what was about to happen, consciously or not?

While it's difficult to draw too many conclusions about the findings, as only one company was analyzed and obtaining large email logs is generally impossible, there does seem to be something here. Think about your own email habits when, say, a big management shakeup takes place at your office. I can't begin to count the hours I've spent gossiping about what may or may not happen to the company (or, more specifically, to me) after some CEO or another was forced out of the various companies I've worked for over the years. Sometimes the company died, sometimes it didn't. I'd be curious to look back on my email patterns to see how nervous I was around those times, though.

Not a lot of takeaway, alas, but it's something to consider if you're in the rare position to have access to data like this. While the privacy implications of looking at email records require treading lightly, as New Scientist notes in the linked story above, Human Resources departments could have a very effective picture of the psychological health of their organizations based on this relatively simple metric.

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  • 2 Posted by marife_galla on Tue Jul 21, 2009 8:40AM EDT Report Abuse

    Thanks for sharing your thoughts with good information about company business.

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