We all know that businesses must innovate to maintain their competitive edge. The ability to capitalise on change to create new opportunities is more essential than ever. But despite significant investment, many of the world’s largest organisations are still struggling to innovate effectively. Here, GrowthBusiness.co.uk speaks to corporate innovation expert, award-winning author and Forbes columnist Tendayi Viki about why successful innovation requires more than just deep pockets. His new book, The Corporate Startup, is out now.

The Corporate Startup suggests that established companies are at risk of failure in today’s business climate because of outdated innovation practices. What are those organisations doing wrong?

The biggest challenge that companies face is the draw of the already successful core business. The need to generate quarterly returns can take attention away from innovation, whose returns come after longer time horizons. In addition to this, whenever companies try to innovate, they use traditional methods to manage innovation; for example business plans, annual budgets and five-year projections. These traditional methods are much more likely to stifle innovation than encourage it. In fact, using traditional methods to manage innovation can lead companies to keep working on the same types of products they have always worked on.

You’ve developed a holistic new model called the ‘Innovation Ecosystem’. What does this involve and why is it necessary?

As I noted earlier, traditional management methods are not suitable for managing innovation – what companies need are a new set of tools. A key question for leaders is whether they have a repeatable process for turning new ideas into sustainably profitable business models. To do this, they need a holistic system that covers three elements: a clear innovation strategy, the right management systems, and a great innovation practice. These three elements working together constitute an innovation ecosystem. If any one of these elements is missing, companies won’t be able to innovate consistently.

What are ‘agile’, ‘lean’ and ‘design thinking’, and how do they work together, if at all?

These three approaches are all based on one philosophy: if you are innovating you are dealing with uncertainty, so how do you manage that? The focus of each approach might be different – for example, agile is used mostly in software development settings. However, the practices are based on the same principles which make it easy for companies to put them together. A good example is that all three approaches are really focused on delivering value to customers. So it is important for all three approaches that customers are involved in the development of products. I actually believe that attempts to make distinctions among the three can be a bit of red herring. In our book, The Corporate Startup, we deliberately put all three together in one system.

What sector(s) are leading the way with innovation and what sector(s) are falling behind – and why?

The common answer to this question for most people is that software companies are leading innovation and everyone else is falling behind. While this might have been true a decade ago, it is no longer true today. Almost every leader now is focused on innovation. I have been working with companies that range from pet food, aviation, retail, banking and software-as-a-service. Even governments all over the world are focused on innovation by creating Nudge Units and various agile technology teams.

How does Britain fare in the innovation stakes with the United States, Asia and other parts of Europe?

Britain is one of the leading countries in the world when it comes to innovation. Of course, the US is really great at creating startups and they have a much richer venture capital base than most of the world. What is more fascinating for me is the emergence of sovereign wealth funds from the Asia and Middle East. These funds have a lot of capital and are already poised to disrupt the market in terms of their investments in innovation. So we will have to see how that goes.

Your book highlights the importance of celebrating failure. How and why should failure of any kind be embraced?

It is not about celebrating any kind of failure – it is about celebrating learning. When you are dealing with uncertainty, every time you learn something it is a good moment. And with innovation, failure is inevitable – we expect to get things wrong. The discipline is not to keep pushing through – but to pause and celebrate the learnings – and then use those lessons to make better decisions going forward.

Tendayi Viki, a 2017 nominee for a Thinkers50 Innovation Award, is the founder and principal consultant at Benneli Jacobs, a strategy and innovation consultancy firm that helps companies develop their internal ecosystems to innovate successfully. His clients include Lufthansa-Airplus, Pearson, Unilever and American Express. His new book, The Corporate Startup, won the CMI management book of the year in the Innovation and Entrepreneurship category. It is out now on Amazon, priced £33 in hardcover and £16.17 as a Kindle eBook.