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Reversals of Fortune

How dozens of companies managed to pull off impressive recoveries in the midst of tech's deepest, longest slump

The view from the Fountain Room at San Francisco's Fairmont Hotel was spectacular -- a sweeping vista of the city's gleaming skyline. It was July 16, 2001, and Jeffrey Rodek, CEO of software maker Hyperion Solutions (HYSL ) Corp., had invited 24 of his top managers to dinner at a place that seemed to sit on top of the world. All the more reason why what he told them came as a shock. After playing Elton John's dirgelike Funeral for a Friend, Rodek announced that the evening's repast would consist of bread and water. "We don't deserve any better," he said.

Rodek's shock treatment kicked off a remarkable turnaround at Hyperion. The company had lost money in two of the previous three quarters, and its stock was trading at 14. Today, it has been profitable for seven straight quarters, and its shares trade at 35. Rodek reorganized the company from five overlapping business units to one and cut in half the time it took to get paid by customers. Most impressive, he managed it during the tech industry's deepest and longest slump.