Introduction: Innovation is one of the top priorities for today's organizations globally. As they strive to remain competitive in the market, organizations are introducing innovative strategies to develop new ideas in product development and customer satisfaction. In an ideal world, innovation within an organization would lead to efficient delivery of quality service ensuring customer satisfaction. Some researchers conclude that innovation may be sector or industry specific (Lawson et al, 2001), but that what actually drives innovation in an organization is a complex combination of leadership, environment, strategy and management style. Keeping these key factors in mind, this research study aims to explore the innovation framework in water utility organization and provide recommendations on ways to improve the innovation process. In the following section, a glossary of key terms will be presented, followed by a brief discussion of the current context. innovation framework implemented in state water utility organizations. The following section will examine the role of innovation in organizations in detail, focusing on innovation strategies and alignment with the innovation process. Glossary of key terms Innovation There are several definitions of innovation scattered throughout the literature (Denti, L. & Hemlin, S., 2012, Vilà, J., 2007, Nijstad, B, Berger-Selman, F & De, CW ., 2012, Hobbs, B., Aubry, M. & Thuillier, D., 2008, Hameed, MA, Counsell, S. and Swift, S., 2012). By far the closest definition to this research paper is offered by West and Farr (1990). They describe innovation as “the intentional introduction and application, within a role, group or organization, of new ideas, processes, products or procedures. adoption unit concerned, designed to sign...... middle of paper... ..C., 1996, Perspectives on innovation in organizations, Organization Studies, vol. 17, no. 1, pp. 107-129.18- Teece, DJ & Pisano, G. (1994) The dynamic capability of firms: an introduction. Industrial and Corporate Change, 3(3), 537–55619- Vilà, J., 2007, Leadership and Innovation, in Next Generation Business Handbook: New Strategies from Tomorrow's Thought Leaders (ed. S. Chowdhury), John Wiley & Sons, Inc., Hoboken, New Jersey, United States. doi: 10.1002/9780470172223.ch1&320- West, MA and Farrr, JL 1990, “Innovation at Work”, in West, MA and Farr, JL (Eds), Innovation and Creativity at Work: Psychological and Organizational Strategies, Wiley, Chichester, pp.3-13.21- Zaltman G, Duncan R, Holbek J. Innovations and organizations. New York: Wiley, 1973.22- http://www.melbournewater.com.au/aboutus/reportsandpublications/Annual-Report/Documents/2013_Annual_Report.pdf