For small businesses, tapping into employees' creativity for problem-solving and new ideas can be a key ingredient in staying competitive with larger companies with more resources. Companies can foster an environment in which employees feel motivated and comfortable to contribute their ideas in several ways. One is to recognize and reward new ideas and creative solutions, such as with prizes or bonuses. Another method is to require employees, in teams or individually, to make suggestions to improve business at periodic meetings, and reward those suggestions implemented. It is important to make sure employees know they're opinions and ideas are valued whether their suggestions are utilized or not.
See "Three Ways to Build Innovation Into a Day's Work", Simona Covel, The Wall Street Journal, July 23, 2008