Structural barriers to innovation
First, let's define the "innovation team". Generally speaking, innovation teams form, work and then return to previous duties. So it is rare that an innovation team works as a cohesive unit for a long period of time. Second, it is often the case that an innovation team is made up of people with different skills and capabilities who belong to different business units or functions, so in many cases the team is distributed geographically as well. If the teams are not cohabitating and are not permanent, then the "space" necessary for them to work in is psychic and online.
By "psychic" space I mean they need the approval and permission to work in ways that make sense for them, and to have the blessing of the management team to do what's necessary to increase innovation capabilities. I know of several firms where there are interesting rooms with bean bags and other wacky furniture but no one wants to risk creating an interesting idea because they know it will be shot down. Creating an atmosphere where anything can be considered, evaluated and recommended is important.
By online I mean that unless the team is physically cohabitating, most of the work is done virtually. The team needs excellent communication, collaboration and information sharing capabilities, and a well defined process that they each understand and commit to. Otherwise it will be difficult for the team to work effectively and the nature of the team will break down. Tools like collaborative software applications, simple communication vehicles and consistent virtual meetings will be very important.
Now, if the team is cohabitating, then what we'd like to see is a physical layout similar to a hub and spoke, with more emphasis on the hub. A large, central meeting area, very conducive to drop in meetings and discussions, centered on a number of smaller cubes of offices which encourages a lot of interaction. Good innovation has a lot of ebb and flow as part of its work - people will come together to generate and debate ideas or concepts, and then need to return to their desks to flesh out the idea and conduct further investigation and research. Then, they may gather again to discuss and elaborate the idea. This demands a space that is conducive to quick, impromptu meetings, "bull sessions", brainstorming and other group activities, and a place for quiet contemplation, research and evaluation of ideas in small groups or by a single user.
Sometimes people are concerned that the "tall walls" of their cubicle or office will get in the way. People who are completely bought into a process and have the assurance of their management team will not let anything get in the way of a great idea.