CNO = When the Windows Failover Cluster (WFC) is initially configured a Cluster Name object (CNO) will be created. this is the windows cluster object in the AD.
1. Open the Active Directory Users and Computers Snap-in (dsa.msc).
2. Locate “Computers” container:
3. Make sure “Advanced Features” is selected:
4. Open the properties of the container and click the “Security” tab. Click “Add” and add the CNO. Make sure to select “Computers” option in the “Object Types” window:
5. Click “Advanced”, highlight the CNO, and click “Edit”:
6. Make sure “Read all properties” and “Create Computer objects” are checked. Click OK until you’re back to the AD Users and Computer window:
7. Retry your previously failed installation. Note that with SQL Server 2012 there will be a “retry” button.
via Error during installation of an SQL server Failover Cluster Instance – CSS SQL Server Engineers