This paper explores the sources of ideas for innovation in engineering design. It shows that engineering designers involved in complex, non-routine design processes rely heavily on face-to-face conversations with other designers for solving problems and developing new innovative ideas. The research is based on a case study and survey of designers from Arup, a leading international engineering consultancy. We examine the role of different mechanisms for learning about new designs, the motivations of designers, problem-solving and limits to designers’ ability to innovate. We explore how the project-based nature of the construction sector shapes the ways in which designers develop new ideas and solve problems. We suggest that among the population of designers in Arup, there are a number of different design strategies for innovating and that these can have important implications for how design is managed. We locate our approach in the research on innovation in project-based firms, outlining patterns of innovation in firms that survive on the basis of their success in winning and managing projects.