At Google, they have an 80/20 rule. Developers spend 80% of their time on work that has been assigned to them, and 20% is their own time, to spend on projects that are just interesting. That is one day per week that a Google employee can sit thinking things through, dreaming new stuff up, and implementing it.
Does it work? AdWords was created this way, and it is a major revenue maker. Google employees seem pretty enthusiastic. Google does attribute part of its success to the system. It seems to work very well, at Google.
Of course, at Google they have a pretty open and enthusiastic attitude to new ideas. "When someone comes up with a new idea, the most common response is excitement and a brainstorming session" according to a post by Joe Beda at Google. According to Beda, managers at Google actively encourage employees to come up with new ideas.
It is something to think about.
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