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U.S. corporate executives are often chastised for sitting on a lot of cash. But the slow and uneven recovery from the recent financial crisis and economic downturn has given them good reason for doing so.

“As demand started to weaken across our markets, we’ve reduced manufacturing to align with the new level,” says Patrick  Ward, CFO of Columbus, Indiana–based Cummins. But that hasn’t stopped the engine manufacturer from making new investments. “Growth is not going to be linear at Cummins,”  Ward explains. “We’re going to go through cycles, and we need to be flexible in how we execute our strategy.  This is a tricky time period.”

Ward is recognized as the best CFO in the Machinery segment by the buy- and sell-side analysts who voted for Institutional Investor’s 2013 All-America Executive Team, our exclusive ranking of the nation’s best CEOs, CFOs and investor relations professionals and teams. And Cummins’s CFO isn’t alone in mastering the crosscurrents of a tricky period.

Even as many executives have decried the lack of clear economic, tax or regulatory policies in Washington, other corporate leaders on this year’s All-America Executive Team have deftly adjusted to uncertainty — unafraid to strike bold deals, prepared to make painful cost cuts. Through a year marked by a persistent euro zone crisis and increasingly volatile growth in emerging markets, along with the fiscal clouds hanging over  Washington, these executives navigate powerful — and often conflicting — business and economic forces. They not only prevail, they prosper.

“We’ve had to be very prudent,” says Stacy Smith, CFO of Intel Corp. But, he adds, “we’ve also had to maintain the courage of our convictions and continue to make investments, even in the midst of a rocky macroeconomic environment.”

In fact, he notes, it’s important to recognize that uncertain climates can benefit a company that knows how to look for the unique opportunities such periods can bring. Adapting to today’s often-austere environment means recognizing that it can offer up not only the best bargains but also plum chances to pull ahead of the pack.

“Paradoxically, uncertainty really opens up opportunities to distance yourself from your competitors,” says Smith, the best CFO in Semiconductors according to the buy side. “When we invest in our factories and extend our leadership over the rest of the industry, there’s an advantage in that. When we make those investments at the same time that others pull back, we get a much bigger advantage.” 

For many of the companies included in this year’s ranking, a similar reasoning has led to major acquisitions, but Smith says Intel’s biggest bet has been on its own factories, where the company invested $11 billion in 2012. The firm has also been investing in its product portfolio, as it moves to respond to a tectonic shift in technology. Santa Clara, California–based Intel is best known for manufacturing the microprocessors that power most personal computers, but as PCs have forfeited ground to tablets and smartphones, it was forced to shift gears over the past year.

“We’re going through a complete transformation,” Smith says, noting that in 2012 Intel began selling silicon for phones and tablets for the first time. 

He also points to the development of Ultrabooks, next-generation notebooks that run on Intel processors. In August 2011, the firm announced a $300 million fund to support companies developing hybrid laptop-tablet devices matching Intel’s specifications: the Intel-termed Ultrabook would be a superthin notebook with tablet characteristics, such as a touchscreen and long battery life. The first Ultrabooks were unveiled in October 2011.

Making the transition from one generation of technology to the next can be tricky, as Intel’s financial results attest. Net income for the first three quarters of this year fell 11 percent, to $8.5 billion from $9.6 billion for the same period last year, while revenue was essentially flat at $39.9 billion versus $40.1 billion for the earlier period. Nonetheless, says one buy-sider, “management has realized where the industry is heading and is making every effort to deliver excellent products in these high-growth areas.”

When he announced Intel’s third-quarter results, CEO Paul Otellini blamed a “tough economic environment” — in the U.S. and Europe, not surprisingly, but also in key emerging markets, particularly China. Smith says, however, that Intel has no plans to shift away from China, the largest PC market in the world, or other still-growing regions, despite their recent volatility. He notes that prices of personal computers in developing markets recently fell below an average level of eight weeks’ income, a threshold that typically signals a spike in demand.

Yet another challenge that Intel faces is the looming May 2013 retirement of Otellini, the top CEO among his peers according to both the buy and sell sides in our survey. (A replacement has not yet been named.) Smith asserts that the timing of Otellini’s departure is a further reflection of the company’s faith in its new strategy: “He feels like the strategy and the course we’re on as a company is the right direction, and he’s confident in the next generation of leaders.”

In the case of Danaher Corp., a Washington-based conglomerate whose products range from microscopes to water disinfection technologies, battening down the hatches and preparing for little-to-no growth in 2012 set the stage for an unexpectedly successful year. Danaher ranks No. 9 among the Most Honored Companies in the survey; its top executives garnered eight first-, second- or third-place finishes for the Best in Their Industry segment according to both buy- and sell-side analysts.

“We came into this year with a grounded view that, at best, this was likely to be a low-growth year on the top line in light of the challenging macro situation,” says H. Lawrence Culp Jr., Danaher’s CEO and the most-admired chief executive by both the buy side and the sell side in the Electrical Equipment & Multi-Industry sector. Now Danaher is poised for low-teens earnings growth year-over-year, Culp adds, “in no small part because of that grounding at the outset.”

This “grounded view” led to equal measures of cost-cutting in the U.S. and new-product development and acquisitions in such high-growth regions as Brazil, India and China. The moves have paid off: Danaher’s net earnings for the first nine months of 2012 rose 13 percent from the same period in 2011, to $1.8 billion from $1.6 billion, on a 17 percent increase in revenue, to $13.3 billion from $11.4 billion.

“When we look at environments like this, we tend to see opportunities,” says Culp. He notes that both the post-Lehman and post-dot-com periods yielded good opportunities, and Danaher continues to seek these out in the current environment. During the past 18 months or so, he reports, the company has spent more than $2.5 billion in new acquisitions “that will set us up going into 2013 quite well.”

Three acquisitions in particular, he says — the purchases of Belgium-based Esko, a supplier of packaging, design and display finishing; X-Rite, a Grand Rapids, Michigan–based manufacturer of color-matching products; and Carlstadt, New Jersey–based Pantone, which also focuses on color selection and matching — have helped Danaher build a strong position in what it calls “product identification,” which Culp describes as “our best growth engine in industrial.”  The purchases followed close on the heels of Danaher’s biggest acquisition in decades: the February 2011 purchase of Brea, California–based Beckman Coulter, a maker of biomedical testing products, for $6.8 billion.

Culp says Danaher has since directed its M&A dollars outside the health care sector. Two thirds of Danaher’s acquisitions in the past 18 months have been in three of the company’s five non–health care segments: environmental, industrial, and test and measurement.

Hoping to escape slow growth and volatility in the U.S. and Europe, the firm is now looking for acquisitions that will deepen its penetration into emerging markets. Last August, for instance, Danaher bought Hangzhou Dingli Environmental Technology Co., a Chinese distribution company, and made it part of Danaher’s water analytics business.

Uncertainty is inescapable, Culp notes: “A lot of us have become accustomed to political and regulatory uncertainties; we just try to take the most sober assessment possible.”

Of course, it helps to be positioned to benefit from new regulations. For example, new water-quality regulations have generated fresh demand for Danaher’s municipal wastewater and drinking water plants. Similarly, Culp expects the Patient Protection and Affordable Care Act will boost the company’s diagnostic businesses, as some of roughly 30 million newly covered patients seek care.

Another company that braced for macroeconomic weakness and profited as a result is Memphis, Tennessee–based International Paper Co.The world’s largest pulp and paper maker began rethinking its strategy as far back as 2005, as the paper industry came face to face with its secular decline. “While we were the largest company in our industry, we weren’t satisfied with the returns we were making,” says CEO John Faraci.

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