I'm a big fan of this approach, and I've used it successfully when hiring at startups. But it hasn't seemed to fit in well with the hiring culture at large comp

I'm a big fan of this approach, and I've used it successfully when hiring at startups. But it hasn't seemed to fit in well with the hiring culture at large companies. We can't use someone's time for free, and initiating a contracting relationship is mired in red tape, so isn't really worthwhile for a small-scale project of the sort that's appropriate in this context. And asking someone to spend a couple days working on something that is going to be thrown away seems demoralizing and possibly counter-productive, since the fact that it's "just a toy" will doubtless impact the approach the interviewee takes to the problem. Plus, in a large company, internal transfers are common. The social dynamic of asking for an employee who works elsewhere in the same company to do work for a different part of the company seems awkward. Does anyone have any success (or failure) stories about trying to make this sort of approach work in a large company?