The more structured things are, the less likely they are to innovate, and often, we are tightly structured with planned work in our daily activities. Changing things up helps us change the way we think.
However, when completely unstructured, we find lots of people waste IT time, so I think having some way to focus creative energy is good.
At Redgate, a few weeks before we have a hackathon week, people propose ideas. Others vote, and there is some way to keep the ideas either in line with something research oriented, or completely charity focused where we build something for an org that needs it. People can join teams if they feel creative, or do their normal work.
There is an energy and excitement, and sometimes when someone proposes an idea, it invigorates thoughts in others. The greatest inventions often come from collaboration or someone working on a problem that someone else noticed.
I think a planned hackathon works, but it needs some boundaries, and it needs a way to continue afterwards if there is merit.
I also like the idea of anyone proposing this at any time, rather than just once or twice a year.