In this article, in People Management, Guy Browning gives his tips on fostering innovation in your organization. My favorites:

There are three vital ingredients required to cook up a more innovative workforce. These are quiet, time and permission to think. People are normally working so hard to meet their targets that they don’t have time to think about how they could meet their targets in a different and better way. Managers need to make sure their people have real time and real permission to think differently.

Customers don’t just have money, they also have ideas. They’re also remarkably willing to talk to you about your products and services. After all, they’re the ones who are paying for them. Develop a method by which consumers and customers can be engaged in innovation and you can speed up and make more effective the whole development process