Innovation is one of a key determination of the economy of a new age. Development of innovation helps companies to sustain in competitive market and gives them growth possibility. Organizations must strive to establish a managed system that will guarantee systematic development of innovation. In this paper it is given the definition of innovation, specified types of innovation and areas where innovation could be developed. Also, there has been made an analyses how big impact have different management characteristics – leadership and vision, strategy, organizational structure, business processes, knowledge management and networking on innovation development. Except from organizational side, innovation can be analyzed from another side – form the side of an employee. There has been given a detailed definition of innovative work behavior and specified the phases of it. Also the antecedents of the innovative work behavior have been defined. Some individuals have bigger potential for innovative behavior because of their creativity or intristic motivation, but with the influence on the antecedents of innovative work behavior, it is possible to extend innovative behavior of almost all employees. Because of that fact, in the empirical part of the paper there has been analyzed what is the impact of organizational climate and work design on innovative work behavior. The study was conducted through a survey on 100 knowledge workers in telecommunication industry in Croatia. The results of the survey show that all analyzed work design characteristics (all knowledge characteristics and task variety) and organizational climate have positive influence on the innovative work behavior. The biggest positive impact has been shown for the problem solving as a knowledge characteristic of a work design. The negative influence has been shown for the age of the employees. This means that the highest innovative behavior will be shown by an employee who has a high skill variety and whose job tasks are defined in the way that it is needed to solve different problems in new and innovative way. Organizational climate has to be pro-innovative. Also, companies have to employ young employees who have shown bigger tendency to innovative behavior. Phase of promotion of innovative ideas has got the lowest score. Also, the result shows the big connection between this phase and organizational climate which indicates that the companies have to work hard on promoting the pro-innovational climate to extend their innovative potential.