Encouraging staff to be more creative...

One of the challenges of running a business it seems to me is to get your staff to be creative rather than just blindly following orders and doing the work given to them.

Are there any particularly effective ways to encourage staff to become more creative, challenge assumptions and come up with alternative ways of doing things (which can of course be better than the set processes).

How do you encourage staff to be creative in your business and is there any sort of incentive or reward structure for particularly good ideas that come up?