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

The two best reasons to become an academic are July and August. I am taking advantage of both this summer. My posts will recommence at summer’s end. Stay tuned.

I recently spoke to the FT’s Adam Jones as part of his series on entrepreneurs who sold at the top of the market (follow the series at www.ft.com/smartsellers). Adam’s series focuses on entrepreneurs who timed their sales well, but our discussion covered some interesting points on timing more generally.

Firms navigating through turbulent markets face many challenges. One of the most daunting, however, is how to develop their executives to effectively manage the range of diverse threats and opportunities that volatile markets generate. And how to provide this executive education in a way that offers good value for money and time.

From the Business Life section of The FT: Survival in an age of turbulence

Most business executives these days would agree that companies operate in an era of exceptional turbulence. Lehman Brothers, they might point out, weathered the US civil war, several recessions, four financial panics, two world wars, depressions, oil shocks, and the terror attacks of 9/11, yet could not survive the current financial crisis.

Studies of the global economy tell a different story. Macroeconomists refer to a “great moderation”, based on a reduction in cyclical fluctuations in gross domestic product in recent decades in most high-income countries. In the US, for example, volatility in GDP was one-third less in the two decades after 1984 than it was in prior decades. Similarly, studies by financial economists find that aggregate stock market volatility in the US has remained flat between the 1920s and the late 1990s.

How can we reconcile the boardroom perception of growing turbulence with evidence of stability? Part of the explanation lies in the timing of the latter studies, which predated the present economic crisis. A more fundamental explanation has to do with level of analysis used to track volatility: moderation of aggregate measures, such as stock market indices and GDP, masks increased volatility at the company level.

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