This setup is certainly rare. At my company (http://istrategylabs.com) we've done our best to at least feed this desire and tie it back to revenue.

1. Everyone in the company can work on R&D projects. 2. There's budget set aside for this work. 3. Everyone can pitch new ideas for new projects/products. 4. If something get green-lit you can join that project if you desire and have value to bring to it.

It's really challenging to assign dedicated "20% time" or some other formal allocation. We've tried serval times and failed. Instead, now, we just setup hackdays/internal innovation days where the entire company can work on whatever they want. It's great for morale and produces new things we can pitch to our customers.