There has never been an age when people did not marvel at the pace of change in their lives. If the acceleration of change in our era is not unprecedented, there has certainly been nothing like it for at least a generation. A.T. Kearney’s Global Business Policy Council has developed a measure of volatility that quantifies just how volatile our age has become.

Our Turbulence Index portrays an interwoven world economy in which the volatility of external conditions doubled from 1999 to 2011. For strategic planners, operating environments became twice as difficult to predict, even in the near term. We call this “the 200 percent effect.”

This picture of extraordinary volatility quantifies what we all know intuitively about the growing influence of externalities on senior executives and the companies they manage. A decade ago, variables such as currency fluctuations and input costs had half the impact on corporate earnings that they do today.

The Index illustrates the macroeconomic uncertainty, financial instability, and unprecedented thirst for resources in an age of unpredictable energy and commodity prices. But bear in mind that the Index does not measure prices. It measures the degree of price movements—their volatility. It offers a foundation for analytics that, if approached systematically, can guide choices about resourcing, investment ideas, and talent management.

Ideas and Insights

Executive Agenda ®