How to create a new tech company within Volkswagen Group
The Volkswagen Group will make software one of its key competencies. At the heart of the transformation: the newly founded Car.Software Organisation where the brightest digital minds will work on one of the biggest challenges in the automotive industry and shape the mobility of tomorrow.
The Car.Software Organisation is currently going live, transferring from a virtual organization into a real company. With all the necessary building blocks.
Three principles have led us through the first months in setting up this company and will further empower us.
The 3 principles of building a company: Clarity, Focus, Execution
Right from the start, the Car.Software Organisation is a very large and complex company. Nevertheless, there are guard rails that put the company on the right course at the launch. With the goal of turning the idea of a software-driven venture into reality. Namely clarity, focus and execution.
When you start a company, you should carefully think about what you are doing — and why you are doing it.
You need a clear vision with the answers to the big questions: What problems do we solve for which customer segments? What is our value proposition, what the value add? And then the details. Many new ventures fail precisely at this point — they are getting lost in too many details before being crystal-clear about the business model that they want to establish.
Clarity is the necessary requirement to gain acceptance amongst stakeholders, employees, and investors. The question is not so much: “Is the strategy understood?” but rather “Is the strategy believed in?”.
We still spend a fair amount of time crafting out our product strategy considering the specific requirements of different regions like NAR or China, the core capabilities we must establish in-house or partnering approaches that we want to push-based upon our make-or-buy assessment.
Pushing for clarity in everything we do is sometimes painful. Openness, trust, and respect are key traits we anchor in our values. But it’s also about methodology. An example: You can create 20 powerful PowerPoint charts that say nothing. So, we have started pushing for brief text documents instead. Written text is forcing clarity much more than beautiful images.
Less is more. This sounds crazy simple. But it’s not an easy exercise.
Especially within a corporate environment that’s in the middle of a huge transformation, there are a lot of challenges that need to be tackled. But you cannot do everything at once. When building a company, you need to focus — every day. That’s why we are currently setting up an OKR (Objectives & Key Results) model to reflect focus in our leadership principles and our daily operations. Based upon rather few Moals (mid-term company goals) around our customers, products or capabilities our teams will deduct their specific OKRs that we will review quarterly, and if necessary, adapt.
Focus enables us to do the things full-heartedly and: to demonstrate progress. It’s so important to have fast-paced feedback cycles on few, very concrete work items to prove that we are on the right track both to our teams and our stakeholders — and that we are having an impact, not only tomorrow but already today.
But what do we do when new ideas emerge (and trust me this happens a lot)? What when colleagues want to add this feature or that process optimization because it would make our business or the user experience way better? We are about to establish a strong backlog culture: Parking the ideas in our backlog and coming back to them once we have achieved our current goals.
Honestly, maintaining focus is a daily challenge to us (and probably to everybody). But we are very committed to becoming better and better every day.
There are so many great ideas out there. So many convincing strategies, so many well thought-through business plans. Corporate strategy programs, incubators, start-ups. But what finally differentiates a great idea from a great business is execution.
The establishment of the Car.Software Organisation is a somewhat special company founding. In comparison to a start-up, we aren’t starting everything from scratch, but are bringing together existing software projects and thousands of people from three Group brands and different subsidiaries, while at the same time hiring developers, software architects, UI designers or data scientists according to areas of expertise we want to establish in-house. So we are confronted with the spirit of company transformation while building a new company at the same time.
This is a complex process and we can only go step by step, but we’ve already taken away some learnings with regards to execution in these first few months:
- Make a start: Start at a certain point before trying to define everything in perfect detail. Make a start with some core and iterate to become better. Certain things can only be found out while you are walking. With the OKR process we are about to implement we will somewhat formalize quarterly target reviews; retrospectives and with that the assessment of adjustment needs.
- Enable ownership: We are looking for people that take care for a problem end-to-end. The people that are NOT keen to give advice what else should be considered, that will NOT forward the issue to others, NOT pointing out to potential risks that could occur but for “doers” that just take the topic and solve it.
- Work carefully: We are in the middle of a huge transformation already — that does not impact our company, but the whole industry and society as well. In addition at Car.Software Organisation we are bringing together people from different brands and subsidiaries that bring their history, their culture, their work approaches with them. This change is huge and needs dedicated care. That’s also why we are going forward step-by-step: Bringing together projects and people with a focus on stability and trust first, then transforming our new company into an agile product & delivery organization.
We are not where we want to be with regards to the quality of our change management, yet. But we are committed to improve every day and push forward Q&A sessions, intranet stories, internal (digital) tech shows, coffee corners, etc.
Building on a stable foundation
We think these three guard rails — Clarity, Focus, Execution — are essential for every newly built company. But we understand our Car.Software Organisation isn’t like any other company at all.
As part of the Volkswagen Group, we surely have assets that other newly founded companies may not have: many existing customers, a worldwide sales infrastructure, tremendous scaling possibilities, and surely also financial resources.
At the same time, this circumstance also brings challenges, and we need to create the conditions necessary to become an agile software company. We need to reduce complexity, increase our speed, develop a more customer/ use-case centered mindset, and own capabilities in core expertise areas. If we manage this well and bring together the best of the two worlds, we will have what it takes to become a forerunner for the industry.
The Car.Software Organisation is more than the sum of its products. It is also a promise to our employees that they are part of something great. And a beacon for those who are willing to give up their supposedly safe turf to explore new territory with us.
This is a responsibility we are very aware of — and more than willing to fulfill. It’s a responsibility that every new company has — to provide purpose, to spark enthusiasm and curiosity, and to keep the promises we made.