NetFlix has announced the cancellation of its NetFlix Prize sequel. The contest, designed to solicit ideas for improving its recommendation engine, has prompted serious concerns about the improper disclosure of private customer information. Apparently, two researchers were able to uncover personal information for NetFlix users, and they disclosed this issue in a Wired magazine article. According to the Wall Street Journal, one researcher, Arvind Narayanan, "has written that privacy incidents like the one involving Netflix 'have shown that people responsible for data release at these companies do not put themselves in the potential attacker’s shoes in order to reason about privacy.'"
This episode highlights a broader lesson for company executives. They often don't spend enough time stepping into the shoes of other key parties such as customers, suppliers, competitors, or potential hackers. That role play exercise can be vital in determining a company's critical weaknesses.