How come innovation make CEOs uncomfortable
Essentially, it’s fear. Fear of the uncertainty and unknown. What is the pay back, the ROI? Their bosses and shareholders need a defined path to future profits and sales.
Innovation is not an exact science, nor will it ever be. We can assemble the information about the consumer needs, develop and maintain the skill sets required to implement a development program, and manage the efforts according to Gantt charts toward product launch; however, it is the soft stuff, the art, the loss of control when instilling responsibility to others in the organization that truly enables innovation.
Jeffrey Phillips blogs on http://innovateonpurpose.com (January 4, 2011) that the Brownian motion of innovation that makes executive uncomfortable because it is easy to manage and control, requires a belief system, and risk taking that organizations are often willing to support or reward.

Many technical environments are traditionally heirarchical in nature, so in many R&D organizations leadership styles are often the outcome of lord-serf relationships. This situation is an archetype of the academic environment from which so many technical professionals emanate. This leadership style fits well within the heirarchical corporate culture, yet how does one adapt their style to other types of cultures, namely, the market, clan, and adhocracy cultures.