After George Russell qualified sixth and Lewis Hamilton seventh for the 2023 season-opening Bahrain Grand Prix, Mercedes boss Wolff declared the team had to change its design direction.
It has now emerged that the team's senior management, drivers and engineering staff were involved in an intense meeting on the Tuesday after the Bahrain race to address its situation.
Asked by Motorsport.com to detail those crunch talks, Wolff said they had proved to be an "interesting process" as Mercedes realised its ability to limit porpoising on its troubled W13 car had given it false hope about how far the team could progress. This created a "perfect storm".
Wolff said: "There are many big and many good meetings happening in the team. It's quite an interesting process because we had the perfect storm last year.
"The car got better and better and then you start to question the concept of the car less than you probably should.
"Now we have to prove that we are not happy where we've landed. We're, overall, not happy about the amount of downforce, the mechanical balance. All of it. It never comes alone.
"All these meetings are giving us clarity and more focus on where we need to tackle in order to turn this around quick."
That sentiment tallies with Russell, who on Thursday ahead of this weekend's Saudi Arabian GP commented that his win in Brazil in 2022 had led the team down a "bit of a wrong path".
Wolff added that Mercedes had now been proved wrong about its philosophy and that its car concept will not eventually surpass rivals Red Bull and Ferrari as previously hoped.
This led the Austrian to conclude that Mercedes had been "misguided" by the data and CFD simulations.
He said: "We really tried hard to make it work because the data that we have extrapolated showed us that this works. We were proven wrong. Very simply.
"You can see that the three quickest cars, including the Ferraris, have a similar concept of how they generate performance. That's very different to ours.
"At a certain stage, we came to the conclusion that we got it wrong.
"Why we got it wrong, we're still analysing because we followed data and we followed what simulations tell us and in that case, we were misguided by what those data.
"All of us involved in the decision-making process came to the conclusion that we can't continue that way.
"We really tried to stick to it and we don't want to, under any circumstance, run in a one-way street saying 'We're going to make this work no matter what' because it doesn't work.
"I don't want to lose more time. My colleagues don't want to as well."
