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Four truths apply to every business situation: 1) it is essential to be a lower-cost supplier; 2) to stay competitive, the inflation-adjusted cost of producing and supplying products and services must trend downward; 3) the true cost and profit pictures for each product/market segment must always be known; and 4) a business must concentrate as much on cash flow and balance sheet strengths as it does on profits. Various costs must be carefully isolated and assigned; expense categories such as R&D, sales, general, and administrative costs must not be ignored. Also gross margins should usually not be less than 40% and assets should not be over 60% of annual sales.

Distills memos written by the author each time he took over as head of a different company, memos intended to make sure his managers understood how he intended to run the company. Included are: a call for a stable earning pattern over time to be duplicated by each business unit; a requirement that the company live by operating plans underlaid by corporate and division strategy; an expectation of productivity improvement; and fairness in dealings with employees. The ground rules for managers' "core responsibilities" are organization and staffing, planning and execution, and people development.