Managing Innovation, and other oxymorons

"Managing and innovation did not always fit comfortably together. That's not surprising. Managers are people who like order. They like forecasts to come out as planned. In fact, managers are often judged on how much order they produce. Innovation, on the other hand, is often a disorderly process. Many times, perhaps most times, innovation does not turn out as planned. As a result, there is tension between managers and innovation."
-- Attributed to Lewis Lehro, about the first years at 3M

So, how do leaders foster an environment of innovation, while still maintaining the predictability that may be required from the investment community and other stakeholders? Robert Park, a business analyst with Telus, suggests the solution is iteration. Small steps allow you to accurately scope work, "change with political winds when necessary," and make "little breakthroughs." This approach requires a high degree of flexibility and "small visions" instead of a single "grand vision." This is in contrast to what many claim as the key to successful innovation projects: a strong leader and a clear, shared purpose. What has your experience been?