Scott Berkun has put together a small article on how to innovate right now. http://www.uie.com/articles/innovate_right_now/
He mentions that every innovator’s tool kit includes these three things:

How does Apple iterate their design? Looking “Inside Steve’s Brain” to find out.

We tend to really like paper prototypes in our line of work.  We often find that by just doing three or four prototypes that we have significantly increased our knowledge of what the client needs up front.
Techniques and tools are discussed at introspectiveH.

User Interface Engineering (UIE) has an interesting podcast discussing some of the problems when using wireframes for complex designs. They cover issues like preserving context, explaining why interface elements are there (or not), and setting priorities for what can be cut.  Keith Robinson call his solution the Page Description Diagrams which describe what the wireframe [...]

Tech Nation interview with Bill Moggridge of IDEO.  The key to successful interaction design: make a prototype and try it with people.
 Full interview (30 minutes)

University of Toronto business-school dean Roger Martin on how Milton Glaser and Massimo Vignelli think about design and its relevance to business.

they don’t confuse what they presently see with reality, and therefore don’t see the present state of a thing as immutable.
they don’t fear the ambiguity that’s created by models or concepts that conflict with one [...]