The need to improve our environment is what makes creative people creative, engineers engineer-y, humans human. The mass of us may not see a need or a way to improve a product or process, but there is likely someone in our organizations who sees what no one else does. That person will start ruminating on fixes. We need to not only acknowledge this but encourage it. We need to provide space and resources for it. I'm willing to bet Google’s 20% rule for passion projects not only allowed for external projects but likely benefited internal projects as well.
Most of us work in organizations with goals that need to move forward.
I think we need to encourage employees to capture ideas for improvement. We should provide them a place to catalog those ideas along with time and resources to continue to flesh them out. However, we need to bracket the time spent.
If we don’t do this, we won’t prevent creative people from creating, but we will drive them underground with out-of-control skunkworks projects that will consume more time and energy from them than we can afford. Even “off-the-clock” hours are an efficiency/productivity drain in that time and energy is being poured into work at the expense of family, health, and rest.