Building a Nordic Hub for Leadership and Organizational Development

There may be room for a Nordic champion in leadership and organizational development.

Pekka Mattila, 19.12.2014

At least, Aalto University Executive Education is striving to test this hypothesis. The company has moved forward decisively since 2011, despite the gloomy economy in all the main markets.

Finding the recipe for becoming global

Aalto University Executive Education (Aalto EE) has a long history in offering executive education programs and related advisory services. Its main target groups are senior and middle managers in large private and public organizations, as well as future leadership talents.

The company taps into the unique strengths of its parent university: entrepreneurship and venturing, innovation management, design management and technology-enabled management innovations. Over the last few years, the multidisciplinary Aalto setting has been a powerful lever for Aalto EE’s growth and expansion.

Aalto EE has been present in the Asian market for 19 years. In fact, it has more Executive MBA alumni in Asia than in Europe or its native Finland. In addition to Finland and Singapore, Aalto EE operates in the Baltics, China Indonesia, Poland, Russia, Sweden, South Korea and Taiwan. Operations in Iran will be launched by autumn 2014. Already, Aalto EE is one of the most international leadership development organizations affiliated to a university in the world. The headquarters in Helsinki coordinates operations in Europe and South Korea, and the permanent office in Singapore serves as a hub for the Asia Pacific region.

Aalto EE’s size provides economies of scale, especially in developing and managing the Executive MBA (Master of Business Administration) programs. Both the students and the faculty are encouraged to make the most of the exchange opportunities. In regard to organization-specific customized programs, the strong international presence helps to better serve increasingly global corporations. Due to the coverage, solutions can be delivered globally depending on the partners’ needs.  For many large corporations, building a uniform leadership culture is a contemporary challenge.

When pursuing international growth, Aalto EE seldom launches a green field operation but prefers partnering with a prominent local institution, ideally the leading multidisciplinary  university. The partnerships vary across markets; some of them are mere service agreements, whereas others are true joint ventures where both profit and risk are shared.

The appeal of the Nordic Way

Most of the globally renowned executive education institutions are located in the US, UK, France or Switzerland. Aalto EE is a rare Nordic example. The continuing success of the Finnish education system in the international comparisons has made the northern approach globally  appealing. Not surprisingly, Aalto EE promotes equal opportunities, e.g. by paying attention to a balanced gender distribution in its programs.

As a member of the Aalto University community, Aalto EE enjoys the ‘Triple Crown’ of accreditations (AACSB, AMBA and EQUIS), the three most respected business school accreditations, awarded to only 0.4% of the world’s business schools.

The diverse international network with organizations such as Unicon, (the International University Consortium for Executive Education), EFMD (the European Foundation for Management Development) and PIM (Program in International Management) helps Aalto EE to keep up to date on the latest phenomena and trends. Aalto University School of Business is also a member of CEMS (the Global Alliance in Management Education), a network linking the leading European universities and major corporations.

Understanding the shifting market

Aalto EE aims for continuous profitable growth and strives to become a most preferred partner in executive education and organizational development for the major international companies in Northern Europe and East and South East Asia.

Since 2009, the executive education market has become increasingly turbulent, and some of the struggling industry players have initiated a race to the bottom through unsustainable price competition. Nonetheless, there is an increasing demand for agile and holistic solutions where the traditional boundary between training and consulting becomes blurred. Furthermore, an increasing number of programs have tangible objectives and pre-set key performance indicators. Today, customers expect higher levels of flexibility and adaptation as their conditions may change to an extent where the original program design becomes obsolete.

Despite the gloomy market, Aalto EE’s turnover has increased from EUR 8.8 million (2010) to EUR 13 million (2013). While investing in renewing its infrastructure, the company has been able to post strong positive annual profits. In 2013, Aalto EE’s financial footprint and overall impact within the Aalto University community accounted for approximately EUR 1.7 million.

Aalto University’s own professors and researchers deliver almost 50 per cent of the training and facilitation. A wide international network of visiting faculty covers the remainder. The combined resourcing model helps to mitigate faculty bottlenecks and recruit the best match for the programs’ and customers’ needs.

From leadership to communityship

Professor Henry Mintzberg – one of the globally most esteemed strategy scholars – has advocated for a better and wider definition of leadership development. He prefers the term “communityship” instead of mere leadership, as it entails wider engagement of the organization. The more knowledge-intensive the organization, the more involvement is often needed.

Nurturing only individual talents may indeed be a relatively slow way to drive change. Instead of parachuting in individual executives, a growing number of organizations are interested in fully customized executive development programs with engaging project assignments and echo teams.

To better meet stakeholders’ expectations, Aalto University merged its commercial continuing education activities in March 2014. Despite the merger, the three brands will remain separate and strongly focused while benefiting from their close relationship. Aalto EE – which is also the juridical platform for all the operations – will continue to cater for senior and middle management; Aalto PRO will focus on professionals, specialists and managers; while Aalto ENT – a whole new brand for entrepreneurship development – will introduce a range of new solutions for mbitious and growth-driven entrepreneurial ventures and family firms. By the end of 2014, Aalto EE will employ around 120 people and have total annual net sales of around EUR 20 million.

In the future, there will be a growing need for an even more holistic approach to organizational development. Even if the Executive MBA and MBA programs and open enrollment programs retain their appeal, which seems likely, there will be an increased demand for organization-wide development programs. Performance and outcomes will also be tracked more systematically both in quantitative and in qualitative terms. Impact and experience – these factors will make the industry winners of the future. 

Pekka Mattila
Group Managing Director, Associate Dean, Aalto University Executive Education
Professor of Practice, Aalto University School of Business

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