Amazon, Google, 3M: Three companies that have been very successful, with a great deal of their success coming as a result of their innovation.
Amazon has altered the concept of what a web store is. In the early web, it was possible to put up your niche store and carry on. Amazon has shown that, just like in real life, the Wal-mart rules reign supreme. More importantly, they've implemented it better than anybody else.
Google has altered what the web is and how people interact with it. It is not surprising that "google" has become a verb, but their impact has been on much more than just finding data. Google Maps woke people up to how the web could be an interactive experience.
3M has a history of innovation. In fact, their entire corporate culture is built around it, with a high percentage of annual income coming from new product introduction. Not one year. Every year for over 70 years. Non-stop innovation.
There are commonalities between these companies. They have decided that innovation is their lifeblood. Most companies will say that they want to be innovative, but Google, Amazon, and 3M have put their money where their mouth is. Each of them give developers a significant amount of free time, usually around 20%, to "play."
What is play time? It is a time for their employees to step away from their day jobs to experiment. They get a chance to try new things that they wouldn't get to otherwise. They get to make changes to existing code that isn't in the "project plan" to see if their idea makes their products better or worse. They get to integrate new technologies, learn new techniques, interact with people other than their direct co-workers.
In short, they get to innovate. Rarely does innovation come as a part of the normal development process. It comes during an unexpected trip down a wrong or curious path. Without giving employees this opportunity to play, you won't innovate. The best you'll do is copy, and slowly at that.