Fear of failure
The process of innovation – bringing new products or services to market or entering new markets – will inevitably involve risk and not all projects will succeed. A corporate culture where failure is punished can only discourage risk-taking and encourage passivity.however, risk-taking is part of corporate life - what often distinguishes success from failure

A major source of danger, as shown in the Ansoff Matrix below, is diversification - attempting to develop both new products and new markets at the same time. Some studies put risk levels from diversification at 16X that for market penetration. For start-ups this is unavoidable (and for Virgin a core business strategy), but for established companies looking for expansion routes, strategies based on developing new products for markets you're already in, or entering new markets with tried and tested products, have considerable advantages.

"We’ll stick to what we know best".
Tom Peters legendary management book from 1980, “In Search of Excellence” included a chapter entitled “Sticking to the Knitting”. This involved understanding what a company’s core strengths were and maximising the potential therefrom. What it didn’t mean was resting on your ‘one-product’ laurels.

Example: James Dyson invented the bagless vacuum cleaner in the early 1990’s and worldwide sales to date have been over £3billion. But even before their patents have expired, Dyson’s competitors (Hoover, AEG Electrolux etc) now offer a full range of bagless cleaners and without continuing innovation Dyson would run the risk of being just another commodity manufacturer. Fortunately, Dyson have defined themselves rather more broadly as a ‘high technology cleaning company’ and have recently come up with the Airblade hand-cleaner. If you haven’t yet come across one in a motorway service station, you will soon. Truly innovative.

“The boss knows what’s best for us”
This is often found in companies approaching a succession issue where the founder is unwilling to let go. Decision making is centralised and innovation and change are seen as a threat to the value of the business and a drain on resources. And yet most purchasers will be looking for a dynamic and innovative management team as part of the deal. One acid test of a strong management team is how they manage risk and whether they can be trusted to learn from thier mistakes. A team not taking risks is administration, not managment.

“We don’t have an R&D department, innovation isn’t for us”.
It’s common to mix up invention and innovation. Whilst the invention of new products may well start in corporate labs (or more often in these days of open innovation, in university departments) innovation is as much about how a company is structured, how it’s processes are organised, and how effective its sales and marketing teams are at bringing new products and services to market. The product development square in the Ansoff Matrix above is all about innovation of process and organisation.