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.