The only way to deal with Google algorithm updates is through experimentation. A data-driven approach is the only approach. : ) Staying abreast of what both Google is saying publicly and what the SEO community is saying also helps (ie Google announced they're cracking down on intrusive pop-ups for mobile sites)

Site performance is always relative to your competitors. Optimal server response time is around 200ms, and that's what folks should strive for, but I've seen sites have really slow pages and still get lots of traffic.