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HBR's editors searched for the best new ideas related to the practice of management and came up with a collection that is as diverse as it is provocative. The 2004 HBR List includes emergent concepts from biology, network science, management theory, and more. A few highlights: Richard Florida wonders why U.S. society doesn't seem to be thinking about the flow of people as the key to America's advantage in the "creative age." Diane L. Coutu describes how the revolution in neurosciences will have a major impact on business. Clayton M. Christensen explains the law of conservation of attractive profits: When attractive profits disappear at one stage in the value chain because a product becomes commoditized, the opportunity to earn attractive profits with proprietary products usually emerges at an adjacent stage. Daniel H. Pink explains why the master of fine arts is the new MBA. Herminia Ibarra describes how companies can get the most out of managers returning from leadership-development programs. Iqbal Quadir suggests a radical fix for the third world's trade problems: Get the World Bank to lend to rich countries so that there are resources for retraining workers in dying industries.

Jurgen Mehr, the European head of marketing for German software giant Typware, is irate about the salary demands of the American executive he wants to hire. Anne Prevost, the executive in question, is the marketing director at a U.S. software company that has been making forays into Typware's markets. She engineered a huge uptick in sales for her company, and now she is ready to jump ship--provided Typware makes her a good offer. She would be a brilliant catch. But the salary she wants is nearly as much as Mehr's. Since 1996, Typware has ventured aggressively into international markets. The consultants who helped negotiate compensation for overseas employees recommended variable standards depending on the employee's location. However, individual expatriate packages are becoming increasingly complicated. HBR senior editor Bronwyn Fryer explores the question of what kind of international compensation approach Typware should adopt. In R0311A and R0311Z, commentators George T. Milkovich, the Catherwood Professor at Cornell University; Jeffrey Alan Thinnes, the managing director of Manugistics Central Europe, a U.S. software subsidiary based in Germany; Joseph Yaffe, a partner with the global law firm Latham & Watkins; and Dietmar Kokott, the senior vice-president of global human resources, executive management, and development at BASF Group, offer expert advice on this fictional case study.

Jurgen Mehr, the European head of marketing for German software giant Typware, is irate about the salary demands of the American executive he wants to hire. Anne Prevost, the executive in question, is the marketing director at a U.S. software company that has been making forays into Typware's markets. She engineered a huge uptick in sales for her company, and now she is ready to jump ship--provided Typware makes her a good offer. She would be a brilliant catch. But the salary she wants is nearly as much as Mehr's. Since 1996, Typware has ventured aggressively into international markets. The consultants who helped negotiate compensation for overseas employees recommended variable standards depending on the employee's location. However, individual expatriate packages are becoming increasingly complicated. HBR senior editor Bronwyn Fryer explores the question of what kind of international compensation approach Typware should adopt. In R0311A and R0311Z, commentators George T. Milkovich, the Catherwood Professor at Cornell University; Jeffrey Alan Thinnes, the managing director of Manugistics Central Europe, a U.S. software subsidiary based in Germany; Joseph Yaffe, a partner with the global law firm Latham & Watkins; and Dietmar Kokott, the senior vice-president of global human resources, executive management, and development at BASF Group, offer expert advice on this fictional case study.

Jurgen Mehr, the European head of marketing for German software giant Typware, is irate about the salary demands of the American executive he wants to hire. Anne Prevost, the executive in question, is the marketing director at a U.S. software company that has been making forays into Typware's markets. She engineered a huge uptick in sales for her company, and now she is ready to jump ship--provided Typware makes her a good offer. She would be a brilliant catch. But the salary she wants is nearly as much as Mehr's. Since 1996, Typware has ventured aggressively into international markets. The consultants who helped negotiate compensation for overseas employees recommended variable standards depending on the employee's location. However, individual expatriate packages are becoming increasingly complicated. HBR senior editor Bronwyn Fryer explores the question of what kind of international compensation approach Typware should adopt. In R0311A and R0311Z, commentators George T. Milkovich, the Catherwood Professor at Cornell University; Jeffrey Alan Thinnes, the managing director of Manugistics Central Europe, a U.S. software subsidiary based in Germany; Joseph Yaffe, a partner with the global law firm Latham & Watkins; and Dietmar Kokott, the senior vice-president of global human resources, executive management, and development at BASF Group, offer expert advice on this fictional case study.

A homogeneous workforce can be a hindrance when it comes to innovation. In this interview, Chris Anderson--the chairman and host of the annual Technology, Entertainment, and Design brainfest--argues for more diversity in the workplace.

When executives need to persuade an audience, most try to build a case with facts, statistics, and some quotes from authorities. In other words, they resort to "companyspeak," the tools of rhetoric they have been trained to use. In this conversation with HBR, Robert McKee, the world's best-known screenwriting lecturer, argues that executives can engage people in a much deeper--and ultimately more convincing--way if they toss out their PowerPoint slides and memos and learn to tell good stories. As human beings, we make sense of our experiences through stories. But becoming a good storyteller is hard. It requires imagination and an understanding of what makes a story worth telling. All great stories deal with the conflict between subjective expectations and an uncooperative objective reality. They show a protagonist wrestling with antagonizing forces, not a rosy picture of results meeting expectations--which no one ends up believing. Consider the CEO of a biotech start-up that has discovered a chemical compound to prevent heart attacks. He could make a pitch to investors by offering up market projections, the business plan, and upbeat, hypothetical scenarios. Or he could captivate them by telling the story of his father, who died of a heart attack, and of the CEO's subsequent struggle against various antagonists--nature, the FDA, potential rivals--to bring to market the effective, low-cost test that might have prevented his father's death. Good storytellers are not necessarily good leaders, but they do share certain traits. Both are self-aware and both are skeptics who realize that all people--and institutions--wear masks. Compelling stories can be found behind those masks.

Jeremy Hicks, Zagante Systems' lead programmer, walks into the office at eight o'clock on a Sunday night and does a double take when he spots his boss, Melanie. She's equally surprised to find she isn't alone. Before leaving for the evening, Melanie pays Jeremy a visit, only to discover that he isn't hard at work on Zagante's new product--he's programming a game for another company. The next day over lunch, Melanie confronts Jeremy and lets him know that he needs to stay focused on Zagante's new software. Jeremy insists that he's fully engaged in it. So Melanie agrees to keep the moonlighting under wraps so long as it doesn't interfere with Jeremy's job. Frustrated with Jeremy, yet anxious to keep such a talented employee, Melanie turns to Jill Darby, Zagante's HR director, for guidance. Jill has both good and bad news. The bad news is that the company has no moonlighting policy. The good news is that Jill can arrange for Jeremy to receive a low-interest loan. But when Melanie tells Jeremy about the loan, he doesn't go for it. He's not just freelancing for the money, it turns out; he's downright enjoying the work and doesn't appreciate his boss butting in to his private business. How should Melanie handle this moonlighting issue? In R0211A and R0211Z, commentators Bill Jensen, author of Work 2.0: Rewriting the Contract; attorney Barry LePatner; economics professors Jean Kimmel and Karen Conway; and HR director Sandra Davis offer advice on this fictional case study.

Jeremy Hicks, Zagante Systems' lead programmer, walks into the office at eight o'clock on a Sunday night and does a double take when he spots his boss, Melanie. She's equally surprised to find she isn't alone. Before leaving for the evening, Melanie pays Jeremy a visit, only to discover that he isn't hard at work on Zagante's new product--he's programming a game for another company. The next day over lunch, Melanie confronts Jeremy and lets him know that he needs to stay focused on Zagante's new software. Jeremy insists that he's fully engaged in it. So Melanie agrees to keep the moonlighting under wraps so long as it doesn't interfere with Jeremy's job. Frustrated with Jeremy, yet anxious to keep such a talented employee, Melanie turns to Jill Darby, Zagante's HR director, for guidance. Jill has both good and bad news. The bad news is that the company has no moonlighting policy. The good news is that Jill can arrange for Jeremy to receive a low-interest loan. But when Melanie tells Jeremy about the loan, he doesn't go for it. He's not just freelancing for the money, it turns out; he's downright enjoying the work and doesn't appreciate his boss butting in to his private business. How should Melanie handle this moonlighting issue? In R0211A and R0211Z, commentators Bill Jensen, author of Work 2.0: Rewriting the Contract; attorney Barry LePatner; economics professors Jean Kimmel and Karen Conway; and HR director Sandra Davis offer advice on this fictional case study.

Jeremy Hicks, Zagante Systems' lead programmer, walks into the office at eight o'clock on a Sunday night and does a double take when he spots his boss, Melanie. She's equally surprised to find she isn't alone. Before leaving for the evening, Melanie pays Jeremy a visit, only to discover that he isn't hard at work on Zagante's new product--he's programming a game for another company. The next day over lunch, Melanie confronts Jeremy and lets him know that he needs to stay focused on Zagante's new software. Jeremy insists that he's fully engaged in it. So Melanie agrees to keep the moonlighting under wraps so long as it doesn't interfere with Jeremy's job. Frustrated with Jeremy, yet anxious to keep such a talented employee, Melanie turns to Jill Darby, Zagante's HR director, for guidance. Jill has both good and bad news. The bad news is that the company has no moonlighting policy. The good news is that Jill can arrange for Jeremy to receive a low-interest loan. But when Melanie tells Jeremy about the loan, he doesn't go for it. He's not just freelancing for the money, it turns out; he's downright enjoying the work and doesn't appreciate his boss butting in to his private business. How should Melanie handle this moonlighting issue? In R0211A and R0211Z, commentators Bill Jensen, author of Work 2.0: Rewriting the Contract; attorney Barry LePatner; economics professors Jean Kimmel and Karen Conway; and HR director Sandra Davis offer advice in this fictional case study.

Is your corporate law firm really acting in your company's best interests? Legal ethics scholar Susan Koniak advises managers to make sure their outside counsel understands that the goal is not to push the limits of the law. Then they should get their legal advice in writing, record all oral communications, and seek second opinions.

No matter how we rail against the status quo, most of us are reluctant to take action in the workplace. Faced with choosing between our values and jobs, most of us either resign ourselves to the situation or leave. Yet, society's tempered radicals--individuals who create large-scale change in subtle, incremental ways--have learned that you can rock the boat without falling out of it. Award-winning director Robert Redford has been described as the quintessential tempered radical. His Sundance Institute, tucked away in the Utah mountains, was conceived as a haven for writers and directors with promising ideas but little more than lint in their pockets. Sundance has proven such a successful incubator of independent films that, perhaps ironically, it has become one of the most influential forces in Hollywood. In this article, Redford talks about how to change an industry--specifically, how he and Sundance have influenced the movie business. Based on his sometimes harsh experiences as an environmental activist and a film actor--he was burned in effigy by demonstrators and figuratively by film distributors who deemed Downhill Racer too uncommercial--Redford concluded that "if you want to crack the system, you can't hit it directly; you have to work behind the scenes." Over the past 20 years, he has experimented again and again with grassroots projects--pieces of which he incorporated into Sundance. Redford's multifaceted approach to change includes earning credibility and then leveraging his successes; practicing the arts of compromise and persuasion to get projects completed; gathering support along the way; and, most important, persisting--tactics that a patient manager in any industry can apply.

Few large companies have soared as high, sunk as low, and struggled as long as the 18-year-old networking software maker Novell. For years, the company dominated the market for local area networks, but by 1997, it had faltered due to misguided acquisitions, product missteps, and large unsold inventories. That's when Eric Schmidt arrived from Sun Microsystems to take over as Novell's third CEO. He turned the company around with a deft combination of cost reductions, divestitures, and new product rollouts, and by 1998, it was back in the black. Unfortunately, the good times didn't last, and like most technology companies, Novell is once again struggling with a slowdown in demand. But Schmidt is optimistic about returning Novell to good health, and his strategies suggest ways for other organizations to handle themselves during downturns. He counsels against being overly cautious during such times. His advice: keep new products coming out to sustain the interest of customers and the press, pay attention to your cash position, stay focused on your desired outcomes, and take heart from other industry leaders.

For as long as can be remembered, BestBaby Corp., a manufacturer of baby equipment and furniture, has enjoyed a solid reputation with retailers, a good track record with consumers, and a supportive relationship with stockholders. But then the child of a celebrity is injured when her stroller tips over because its brakes failed. The media go wild, and CEO Greg James finds himself in uncharted territory. The morning after the accident, Greg calls an emergency meeting of his executive staff. As he searches his memory to prepare for it, he thinks about Arzep Enterprises, BestBaby's main provider of parts and materials. He remembers his COO, Keith Sigismund, telling him that Arzep had switched suppliers at some point in order to cut its own costs. Nevertheless, Keith had assured Greg that the new material, although not quite as sturdy, hadn't affected the quality of Arzep's components. Then in the meeting, Keith drops a bombshell: he reads from a year-old memo sent to him by an employee in manufacturing stating that the new brake fittings delivered by Arzep don't grab the front brakes as well as the ones previously supplied. In R0104A and R0104Z, John R. Hall, Ian Mitroff, Robin Cohn, and Alan H. Schoem offer advice to Greg on how BestBaby should respond to the victim's family, the media, the public, and the company's own employees during this PR crisis.

For as long as can be remembered, BestBaby Corp., a manufacturer of baby equipment and furniture, has enjoyed a solid reputation with retailers, a good track record with consumers, and a supportive relationship with stockholders. But then the child of a celebrity is injured when her stroller tips over because its brakes failed. The media go wild, and CEO Greg James finds himself in uncharted territory. The morning after the accident, Greg calls an emergency meeting of his executive staff. As he searches his memory to prepare for it, he thinks about Arzep Enterprises, BestBaby's main provider of parts and materials. He remembers his COO, Keith Sigismund, telling him that Arzep had switched suppliers at some point in order to cut its own costs. Nevertheless, Keith had assured Greg that the new material, although not quite as sturdy, hadn't affected the quality of Arzep's components. Then in the meeting, Keith drops a bombshell: he reads from a year-old memo sent to him by an employee in manufacturing stating that the new brake fittings delivered by Arzep don't grab the front brakes as well as the ones previously supplied. In R0104A and R014Z, John R. Hall, Ian Mitroff, Robin Cohn, and Alan H. Schoem offer advice to Greg on how BestBaby should respond to the victim's family, the media, the public, and the company's own employees during this PR crisis.

Lori Andrews, a professor of science, technology, and law, discusses the legal and ethical issues surrounding genomics. She explains what executives need to know about handling sensitive genetic information and technologies.

There is a growing awareness among corporations that the quality of the customer experience they provide directly affects their bottom line. Many are turning to high-flying software maker Siebel Systems for help in managing those relationships. The young company holds a leadership position in an explosive market--enterprise application software. But customer satisfaction, not dot-com chic, is foremost on the mind of Siebel Systems' founder, chairman, and CEO, Tom Siebel. The buttoned-down Siebel rejects the freewheeling management style and culture that characterize many Silicon Valley companies. As the former CEO of Gain Technology and a former executive at Oracle, Siebel believes in putting customers ahead of technology, discipline ahead of inspiration. In this interview, conducted at the company's San Mateo, California, headquarters, Siebel describes how this obsessive focus on customer satisfaction has been the driving force behind the company's success. He talks about how the organization remains true to its core values: a deep commitment to providing customer satisfaction; responsible fiscal practices that have created a cash-positive business amid today's cash-negative dot-coms; and general professionalism. Siebel Systems rejects the concept of going to war with rivals; instead, the CEO says, the company has forged an ecosystem of partnerships that allows it to support and integrate its own systems with other companies' software products and ultimately ease the customer's software installations. Indeed, Siebel says, the CEO's most important job is to understand what customers need and deliver that.

The Internet was supposed to make it possible for anybody anywhere to get anything anytime. Instead, it's magnified suppliers' miscalculations into global shortages. But if the Net caused these supply chain woes, it's also the solution, says the CEO of a supply-chain software manufacturer.

Most people think of Napster when they think of peer-to-peer systems. Nirav Tolia, CEO of Epinions, explains why the power of peer-to-peer goes far beyond the entertainment industry. He predicts it will shake up the entire retail industry.