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Hire Everybody

Let's say your company has about 1,500 employees and annual revenue of about $1.4 billion, and you want to develop the next product innovation that will boost revenue and increase customer retention. What if I told you that you could hire tens of thousands of people from all over the world (some of whom already work for companies like AT&T and Yahoo!) to devote time to the project for three years, and you would get a three-year marketing campaign to go with it. What might that cost? Well, for Netflix, it cost exactly $1 million.

Last month, Netflix awarded its one-million-dollar Netflix Prize to the first team who could improve the company's movie recommendation service by 10% or more. It may sound like a lot of money, but when you add up the work hours that some of the most talented developers, engineers, and mathematicians from more than 100 countries put into the project, and the marketing buzz that accompanied it, it appears to have been well worth it. So much so that Netflix has already announced round two of the initiative, aimed at improving movie recommendations based on demographic data.

This type of crowd-sourcing contest is not new, but the fact that the goal was an algorithm that would belong solely to Netflix and benefit the company in terms of revenue and customer loyalty makes the Netflix Prize kind of unusual. There was no "for the greater good" motive here. Netflix simply realized that it had maxed out its own brainpower to create its current recommendation system and needed help to make it better. To illustrate the type of brainpower that exists outside of a company's walls, the first team to beat Netflix's own system, which was five years in the making, did it in about three weeks.

The other key is the prize. There are plenty of crowd-sourcing options out there where people solve problems just for the satisfaction of finding answers. But the million-dollar prize attracted some of the most talented people, while keeping participants focused on the task and what others were doing. In many cases, teams realized they weren't getting any further on their own, so they joined forces with other groups. The winning team was actually a combination of two smaller teams.

There are companies out there whose business is facilitating this kind of crowd-sourcing. InnoCentive is sort of a marketplace for challenges, and NineSigma specializes in finding the right crowds for specific tasks. The Institute for Corporate Productivity is here to crowd-source your HR challenges. Is there a problem you're dealing with that could use some outside brainpower to solve? Post a question on our Website and call on the combined wisdom of our network of member companies and internal analysts. And while we might not have $1 million to give away or the capability to launch a spacecraft, it's quite likely someone else has already dealt with issues similar to yours and has some good solutions that could end up saving your day.

About the Author(s)

David Wentworth, i4cp is a senior research analyst for the Institute of Corporate Productivity (i4cp). For more information, visit www.i4cp.com