If you give a plant water, sunlight, and nutrients, it will grow fruit. And, if you mix sugar, flour, and butter and then add heat, you get cookies. So, what's the recipe for a team of technologists to continuously develop new product ideas?
First of all, thanks to the commenters for their interesting points of view. I particularly liked "challenging the status quo" and striving for "clarity on constraints and goals".
Here's my formula for driving invention in a tech company.
1. Know your full range of capabilities.
It's great to know the constraints to a problem, and constraints create necessity which is (sometimes) the impetus for innovation. Just ask NASA or the military. But I argue it's even more important to learn what are not constraints. What data do you have that you didn't even know about? What white label applications are available? What academic research is already compiled? Know what's out there.
2. Understand the fundamental business problems.
You can tinker with technology 'til the cows come home. You can also get distracted by working on surface-level business problems that don't really matter. Why did your customers buy your product? Why made the customers of your competitors choose something else? What constraints do they have that you could make go away?
3. Share information!!!
This is the most important ingredient. If some people are away of the capabilities (#1 above) and other are aware of the opportunities (#2 above), but no single person knows both, then you're screwed. There's only one way to fix it, which is to share information the other party doesn't know they should be asking about. The best example: Product Managers should talk to Developers about what they're trying to do. Engineers should talk to Product Managers about what has their hands dirty. This is best done informally, in small groups, with conversation and without PowerPoint.
4. Be methodically imaginative.
5. Develop a culture of "yes".
"No" is not a complete answer; a complete answer is, "yes, if only we had <fill in the blank>". You'd be amazed how often simply stating what would make things easier can do... for relationships, for earning trust, for identifying root issues, and most importantly for driving innovation. Also make a point that good ideas can originate from anywhere. Then take those ideas seriously when they're presented. And recognize that ideas you hear (as a Product Manager) are typically shorthand for problems and solutions. Usually, with a little abstraction, you'll discover some real nuggets.
6. Finaly, provide "the spark".
Invention is like a chemical reaction that requires activation energy. You can mix all these ingredients and they can become volatile, but they still need that extra "kick". So provide it. Give people time to break away from their "normal" routine. Give them room to run with an idea. Let them down-prioritize something else. Pay for lunch. Get offsite. Visit a client. Listen in on fiery customer service calls for an hour. Establish your own version of Innovation Day.
To all you "people managers" out there: if all you push on is efficiency, that's all you'll ever get!