Richard G Russell, a Principal Development Manager at Microsoft writes about his expereince with 20% time, called Prototyping in Microsoft jargon.
Working At Microsoft–20% Time and Prototypes
But, when we are not focused on finishing a coding, integration or stabilization milestone, we very often have time to work on 20% kind of things – often way more than 20%. We call this prototyping.
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In summary, there are times in our product cycles when people have quite a bit of discretionary time. Way more than 20%, often close to 100% for weeks. This is deliberate. We use this time for prototyping, thinking, experimenting and learning. Many excellent product features come directly out of this fruitful time and efforts. Most of this work is done at the grass roots level and determined by individual contributors or small teams of people with like interests and passions. This is not a new thing. The Windows organization has worked like this for a long time.