> Doing innovation comes with risks - which may or may not pan out. If it doesn't pan out, the executives would get chewed for it, and if it does pan out it is

> Doing innovation comes with risks - which may or may not pan out. If it doesn't pan out, the executives would get chewed for it, and if it does pan out it is unlikely to pay off for a long time (in terms of bonuses - at least, not within their tenure). You really nailed the problem. It is faced by all companies with sizeable middle management (read, all companies above a certain size). Let's look at the incentives. A middle manager with an entrepreneurial spirit who tries to enact change, try new ideas and stay ahead of the curve has a chance to make it to the top, provided they have allies already at the top who are also willing to bet their reputation on the underling and also that none of the bets backfire badly. On the other hand, let's take a pointy haired boss type middle manager who does jack-all, avoids responsibility where possible and therefore by definition they also don't participitate in any cockups. They sort of coast by, being too average to notice either for outperformance or underperformance. After 20 years at the company, they retire. Which of these two are going to be the majority? In my experience, the latter outweighs the former by a large margin. Being in the latter, you don't have to do anything, just stay away from trouble. Squash any ambitious projects your group comes up with, maintain some token efforts that look good on quarterly presentations, but keep it all fairly toothless. Over time they get entrenched in the company and whether consciously or not, they ensure that only similarly minded people are promoted to middle management, since anyone more ambitious is a direct threat. None of these people are individually evil, and they perhaps aren't even consciously impeding the company. They become a product of the environment. A natural selection of sorts.