We used to do that at my previous company. We'd actually have several candidates come in together, have them form an ad-hoc team, and spend 6 hours on solving a

We used to do that at my previous company. We'd actually have several candidates come in together, have them form an ad-hoc team, and spend 6 hours on solving a real-world (toy) problem. With one existing team member on that test team, and a rotating team of observers. It's a great method to hire, but it's expensive - you better make sure that the people you invite in are pre-checked quite well. It definitely was the most fun I ever had interviewing.