How difficult it is for legacy businesses to transform, especially those with storied histories, is illustrated by the travails endured by Volkswagen’s beleaguered CARIAD software division.

The YouTube channel Connecting the Dots reports that CARIAD was intended to future-proof the VW Group, but, so far, it has been an expensive disaster handicapped by institutional resistance.

In 2020 former CEO Herbert Diess established CARIAD with a significant budget, army of coders and a mandate to make VW Germany’s biggest tech company after SAP, with the software engineering smarts to digitize the core vehicle business and catch up to Tesla and the leading Chinese auto firms.

On October 14 2021 Diess even had Elon Musk appear as a “surprise guest” in an attempt to energise 200 of his most senior executives at a VW conference in Austria.

However, VW’s rigid culture and myriad internal divisions resulted in disappointing progress, duplicative efforts, financial losses, delayed vehicle launches and corporate embarrassment.

In large part because of CARIAD’s failures, Diess was exited by the VW Board in August 2022 . Porsche CEO Oliver Blume then had his remit extended to the entire group.

Blume claims to be committed to turning around CARIAD’s fortunes, refactoring the organisation’s objectives with fewer people and resources. Progress has reportedly been made, but the technical and financial challenges remain imposing.

In the Connecting the Dots YouTube video, a standout comment, from my personal perspective, is the remark by an anonymous CARIAD staffer that work-life balance was an excellent and that “weekends start at 11am on Fridays”.

However, it was also acknowledged that this is “not how you win” against Tesla and the Chinese competitors.

This was also my experience of German corporate culture during four years at Daimler’s Mercedes-Benz HQ in Stuttgart. The quickest way to make oneself unpopular was to schedule a Friday afternoon meeting.