Purpose: Technological advancements and global societal changes reshapes manufacturing industry emphasizing needs for competence development of industrial professionals. The purpose of this paper is to study how organizational learning supports the development of academic structures, creating agile and sustainable formal educational models meeting novel competence needs. Design/methodology/approach: The qualitative case study, part of a longitudinal research study, focuses on internal academic processes supporting a new formal educational model. Qualitative data was collected through five focus groups, incorporating 32 informants from different HEI function categories. Findings: Changing traditional academic structures requires joint engagement between all HEI functions, emphasizing organizational learning with subprocesses of searching, creating, sustaining and exchanging knowledge in a learning loop. Results show a consensus among the different HEI functions regarding the value of the HEI's coproduction with society; however, bureaucracy and academic structure hinder flexibility. Cross-functional teams building a "chain-of-trust" throughout the HEI coupled with full management support show opportunities to progress into a learning organization. Practical implications: Organizational learning within HEIs requires trustful and open communication, multifunction knowledge exchange, holistic views of processes and system thinking, achieved through cross-functional teams and continuous improvement through learning loops. Social implications: Industry-academic collaboration on formal education for lifelong learning needs to become both agile and resilience to meet technological advancement and sustainability. Originality/value: Novel technology, digitalization and sustainability gain ground and require that society and organizations, including academia, change and learn. This means that academia is meeting new challenges and needs to develop internal processes.