They Should Have Called It the U-Prize--As In, U Innovate, We'll Appropriate

The past few years has seen the emergence of the X Prize Foundation and their series of challenges that spur teams to achieve a preset goal in exchange for a cash prize â€" goals like landing a private spaceflight on the moon or designing an ultra-fuel-efficient car. Corporate sponsors like Google or Northrop Grumman often put up the money for these prizes.

You may ask yourself "What does space travel have to do with Internet search?" The answer is that these are simply non-profit initiatives to spur innovation in fields that the company leadership believes are interesting or important (and they get the ol' corporate logo out there at the same time).

Cisco is now going a step further and offering the I-Prize, a call for teams of innovators to use Cisco collaboration tools to create a new business model and present that model to them, with the winner getting up to $10 million in funding from Cisco and the opportunity to head that new business within the company. It's like paying someone to do your homework for you, but on a grand scale.

In a way, the I-Prize challenge is eerily reminiscent of the "Suggestion-Box Meeting" that The Office's Michael Scott held when he had to come up with some concrete ideas for the direction of Dunder-Mifflin's Scranton branch in a few short hours before a performance review. Or perhaps more like a corporate take on those reality talent shows. Czar Search? America's Got R&D Talent?

But the serious question here is, does the challenge make sense for Cisco, its customers and the world at large? A couple of questions come to mind:

Is it an effective use of resources? The millions of dollars that may go to fund the new idea, not to mention all of the money and effort spent on publicizing the challenge could have gone toward developing ideas generated internally. Is this demoralizing to Cisco R&D and other innovation-minded employees? Or will they welcome the competition and influx of outside ideas? And isn't that the purpose of the HR function, to find people who will generate these ideas for the company? Or more to the point, shouldn't team leaders be developing the talent and leadership to innovate from within the company, rather than tossing out a net toward the abyss and pulling in whatever lies beyond?

Does it provide any benefit for the employees, the customer or the world at large? It seems like Cisco is acting as a glorified VC firm or a multi-billion-dollar incubator here, but placing all sorts of limitations on the entrepreneur. Certainly Cisco will benefit if the next big thing comes from this challenge, but what does it provide the world at large? The winning idea will have to be squeezed into the Cisco business model, so the best idea for the consumer might not necessarily be the one chosen. For the potential entrepreneur and their potential team, there is none of the security of being involved in a Cisco core business, and also none of the excitement and less opportunity for equity than you would have working for a promising startup.