Ask HN: How does your organization recognize, foster and reward innovation?

Hey, so my question is basically the title.

Let's say you realize you could make a tool, library, feature etc. that would your life, the life of your colleagues that much easier. Or you think of a kickass feature that'd make your product that much better?

What are the ways your organization allows for these bottom-up initiatives to come into fruition? What methods and processes worked well in practice? How do you balance this with regular work and red tape?

Please post positive examples that work well, I'd like the theme to be what are the effective ways of handling this, not out of touch management horror stories.