The True Innovation Potential of Employees Lies Outside the Perimeter of Their Job

Linda Hill, Professor at the Harvard Business School, recently discussed how companies that have demonstrated successful innovation practices have used strategies to engage innovators on a more personal level in this post on the Unstructure blog. When employees are put in an environment where daily routines, performance pressures, and workloads are present it seems to limit the quality of the innovative work flow.
I'm interested in hearing some success stories of breakthrough innovation by breaking the traditional employer-employee relationship?