Survival of the fittest

Just two years later, the popping of the technology bubble forced Akamai to rethink everything, from its line of products to its roster of customers.

At first, the pioneering Internet infrastructure company heavily pitched its Web content delivery technology to brash dot-com start-ups with the earliest e-commerce websites. But between 2000 and 2002, many of those customers vanished.

"We said, 'Where do we want to be when this downturn ends?' " recalled Akamai executive vice president Bob Hughes. "And we realized the permanent economy brands were going to come online." In other words, Akamai saw that rather than being built by new Web companies, e-commerce would grow as traditional companies migrated online. So the company hired a new corps of sales people who spoke the language of established retailers, automakers, and banks - and it installed new security and other features to appeal to those customers. Over time, they became the backbone of Akamai's business.

Hard times compel radical change. And companies that overcame the extreme stress of earlier economic slumps and emerged stronger hold lessons for those struggling in the current downturn. While the strategies that helped them navigate through choppy waters varied by company and industry, survivors speak of sticking to their vision, but employing flexible tactics and making course corrections on the fly.

In each case, the process of adaptation resulted in companies that were transformed, and stronger, when the economy recovered.

"The success stories in tough times are always about an executive or a board that essentially says there is no more normal, things are different now," said Philip L. Quaglieri, dean of the College of Management at the University of Massachusetts at Boston. "The survivors realize that they need a new strategy to turn the corner and they are willing to throw the old playbook out the window."

Ron Sargent, a 20-year veteran at Fra mingham office supply chain Staples Inc., had to throw out the playbook when he took over as the Staples chief executive in the midst of the 2001 downturn. The company quickly moved to close 31 office superstores that weren't profitable in smaller markets. But it also continued to open new locations in faster-growing markets - 60 during 2001, in fact - and it made sure its stores were fully staffed during peak customer hours.

"A lot of our competitors started cutting back hours in the stores, so the service wasn't as good," Sargent said. "Customers hate that. It takes a long time to get a customer, but you lose them quickly if you're making people wait six in line for the checkout, or if they're buying a computer and they're dealing with someone who's indifferent."

Sargent said he followed three rules in the last recession, all of which can apply easily to today's downturn: Take care of customers. Pare expenses wherever possible. But continue to invest in the future. "You can't just do two of the three," he said. "You have to do all three. And you really want to hug your customers at a time like that."

Thermo Fisher Scientific Inc. of Waltham took advantage of the last recession to undergo a thorough makeover. The company, which sells analytic instruments and lab equipment for the healthcare and life sciences sectors, was then known as Thermo Electron. It was a holding company that acquired and merged scores of other firms in fields ranging from energy to medical devices to paper recycling, and spun off nearly two dozen as publicly traded companies in which it held majority stakes. But its business had grown unwieldy.

The company promoted chief operating officer Marijn E. Dekkers to president and chief executive, and hired management consulting firm McKinsey & Co. to help design a new strategy at a time when stepped-up regulation was making it difficult to run a public company, let alone multiple ones. Over two years, the company reorganized, consolidating many of its majority-owned holdings while selling off others, and refocused on scientific instruments. Later, it acquired Fisher Scientific, a key supply channel to research labs.

"Probably the biggest thing we've done is the continuous investment in the company for the long-term, acquiring complementary technologies to give us the portfolio we have today," said Karen A. Kirkwood, vice president of corporate communications at Thermo Fisher. Investment in research and development continues, with the company spending $250 million in 2008, and a similar outlay this year.

As companies make strategic shifts to adapt to downturns, those moves inevitably lead to other changes.

Akamai's decision to target established companies, for instance, required it to add new privacy and acceleration features to its software, because its new customers demanded a secure environment that enabled fast transactions. Staples, as it expanded its empire of superstores, found it needed to grow its delivery business. Thermo Fisher used its new sales channel to boost its sales of "consumable" lab products such as test tubes, glass slides, and petri dishes.

But the central idea of their business - delivering Web content for Akamai, office products for Staples, and scientific instruments for Thermo Fisher - remained the same.

"We knew online commerce was a permanent trend," said Akamai's Hughes. "That wasn't going away, even if we had to retool our product portfolio and restructure the sales force to go after the enterprise customers. For us, the big idea didn't change."

Robert Weisman can be reached at weisman@globe.com.