Freedom is the missing ingredient in organizational design.

In the natural world, evolution shapes systems to enable better access to the flows—whether of energy, resources, or information – that cause them to thrive. This principle, as articulated by Adrian Bejan in the first chapter of Freedom and Evolution, reveals a profound insight: freedom is the enabling factor that has often been overlooked in understanding natural phenomena. Freedom, as stated in the constructal law that Professor Bejan was the first to articulate, is a law of physics. It is fundamental to evolution. It’s the reason we’re surrounded by such rich diversity in nature. Professor Bejan uses the term “flow” to identify the natural freedom to evolve – to advance without barriers and obstacles.

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Applying this insight to business reveals that freedom is also the missing foundational element in organizational design. Traditional organizational design has aimed at command-and-control, i.e. to minimize freedom, to impose structure rather than allow flow. This is the wrong direction, yet it’s been perversely pursued for the past century-and-a-half.

We need to change direction. To create organizations that evolve freely, three new ideas – suggested by Professor Bejan’s work, and adapted for business – must guide their design:

  1. Organizational design should be based on the unifying freedom of evolution to provide easier access to what flows; in business, this means customer value.

  2. The driver of free evolution in all organizations is the force of entrepreneurship.

  3. Organizational freedom gives individuals access to the power of entrepreneurship, both as consumers and producers.

Idea 1: Evolution and Flow in Organizational Design

In nature, systems evolve to optimize flows. Rivers carve efficient paths to the sea, tree branches maximize access to sunlight, and root systems maximize access to nutrients. Similarly, thriving businesses evolve to optimize the flow of customer value, both the inbound flow of customer feedback and the outbound flow of innovation and new value propositions. Organizational design is the architecture that either facilitates or obstructs this flow. When rigid hierarchies dominate, the channels through which customer needs are identified and met become clogged.

Evolution in organizational design requires dynamic structures—networks that are responsive, adaptive, and capable of self-reorganization. By enabling easier access to the flow of customer value, businesses can mimic natural systems that thrive. This evolution is not static; it demands continuous refinement to better align with customer preferences, market conditions, competitive offers, and technological advancements.

Idea 2: Entrepreneurship as the Driving Force

Entrepreneurship is the driving force of organizational evolution. It is the relentless pursuit of opportunities to identify, create, and deliver value. Entrepreneurs, whether as individuals or teams within an organization, act as catalysts for change. They identify inefficiencies and barriers to value, innovate solutions, and disrupt established norms.

In many organizations, entrepreneurship is stifled by bureaucracy and centralized control. Inflexible processes, rules and regulations—while necessary to some extent—can become barriers that prevent individuals from freely taking initiatives. For businesses to evolve, entrepreneurship must be nurtured at every level. This means creating an environment where ideas can flow freely, experiments are encouraged, and failures are treated as learning opportunities.

Idea 3: Freedom as the Enabler

Freedom is the access individuals have to the power of entrepreneurship. In business, this applies to both producers and consumers. Producers need the freedom to innovate, take risks, and collaborate across traditional boundaries. Consumers, on the other hand, need the freedom to choose, signal their preferences, and co-create value.

The most successful organizations today are those that embrace freedom as a core principle. Consider companies that empower employees with decision-making autonomy or platforms that give customers the tools to personalize their experiences, or give users the opportunity to creatively profit on their platform, as YouTube and TikTok Tok do. Freedom fosters creativity, agility, and resilience. It transforms rigid hierarchies into fluid networks where value can flow unobstructed.

Conclusion

Freedom is not a luxury or an afterthought in organizational design; it is its very foundation. Just as evolution in nature depends on freedom to optimize flows, evolution in business depends on freedom to unleash the power of entrepreneurship. By rethinking organizational structures to prioritize freedom—for both producers and consumers—businesses can create systems that are not only more efficient but also more human. The path forward lies in embracing freedom as the missing principle of organizational design, allowing businesses to evolve and thrive in a rapidly changing world.

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You can learn how to facilitate free flow in business, and 10 more mental models of value creation, via the Value Creators Online Course.

The Value Creators is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.