Organizational hydraulics translate corporate priorities into coordinated action throughout the organization.  Hydraulics include processes to select overarching priorities, translate them into individual performance objectives and cascade them down the chain of command, monitor progress, and reward performance. When a firm’s hydraulics are broken, top executives must exert heroic effort to get things done, while well-functioning processes allow an organization to execute effectively on priorities, even when these priorities shift in response to changing market conditions.

In recent decades, few markets have been more turbulent than Brazil, and few firms demonstrated greater agility than Garantia Bank and its affiliated companies, including the brewer AmBev, retailer Lojas Americanas,

With the worst of the economic crisis behind them, many executives look forward to a period of stability and predictability when companies can return to business as usual. They are likely to be disappointed. Market turbulence did not begin with the fall of Lehman Brothers, and it will not end when the global economy recovers. As I’ve noted in an earlier post, scholars using a variety of measures including stock price volatility, firm mortality, persistence of superior performance, frequency of economic shocks, and speed of technology dissemination. have converged on the finding that volatility at the firm level has increased somewhere between two- and four-fold between the 1970s and 1990s. Turbulence, in other words, was on the rise before the current recession began, and there is little reason to believe it will retreat end when the global economy recovers.

In turbulent markets, business leaders recognize the value of organizational agility in dealing with rapid-fire change. A recent McKinsey survey found that nine out of ten executives ranked

Committing to a global mindset is only the first step in globalization. Just because the owner is committed to going global, there is no guarantee that the rest of the organization will follow along. Samsung’s Chairman Lee declared a “Second Foundation” in 1987, but found the group had made little progress six years later in moving towards global competitiveness. To commit the organization to globalization, Lee divested businesses, shook up management and made bold public declarations to global leadership in electronics.

Decisive actions to give the global mindset teeth serve several purposes: They convince employees and external stakeholders that top executives mean business, and that globalization is not simply the management fad of the month. Commitments trigger a sense of crisis, but also that management has a way forward. Finally, these