From VapoRub to Pampers and Swiffer, P&G has been innovating for over 180 years. Today, they’re out to reinvent the way they connect and deliver value to consumers via digital: IoT, AI, machine learning, big data, AR/VR, mobile and other cutting-edge technologies. At the center of this ambitious vision is an internal agency called Alchemy.
Separate but funded by P&G, Alchemy thinks and operates like a startup or creative firm. But they’re up against unique challenges and expectations. Working on some of the biggest brands in the world, potential revenue can run in the tens of millions, or even billions. And that’s a lot of pressure. Paul Armstrong, Alchemy’s Head of Design, shares how Alchemy came about, what led him to join and what might be next as the global behemoth continues to reimagine our day-to-day as we know it.
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Carl: Hey everybody, and welcome back to The Bureau Briefing. We've got a treat for you today. We have a guest that I first met years ago at Converge, which you probably remember was one of the best events run by Gene Crawford out of Little Columbia, South Carolina.
Now, what was fun for me was this person worked for a company that had built a product that I actually used. So that was super fun, and we may even talk about that just a little bit, but today he is the head of design for Alchemy, which is an internal agency at Procter & Gamble. And that blew my mind. I had to understand more about how you put together an independent feeling digital shop within an established company so old it only needs two letters. So please welcome to the show Paul Armstrong. How are you, Paul?
Paul: I'm good, Carl. I've never been referred to as a treat so you know, everyone be prepared.
Carl: Well no, hey, you know what?
Paul: I'm a treat.
Carl: If I say that word, we're lucky that my golden retriever didn't come running from about a mile and a half south of here where my house is.
Paul: So your dog is like Alexa. You say a name and it just alert.
Carl: I say treat, and they are on the way. And dammit, it better be cheese. Not some crappy cookie out of a box, right?
Paul: Oh, specific kind of cheese? Our dogs always loved provolone.
Carl: Provolone is an excellent choice.
Carl: I would have to say. Next on this episode of Dogs Prefer Cheese.
So Paul, you worked for ChoreMonster.
Paul: I did. I was the co founder, yeah.
Carl: Co founder. See, now I thought you were, but I didn't want to do that, and then you're like, "Oh, sorry." We love that. My family, we loved that app, and my kids got excited, and they would work really hard, and I'm going to get you to explain what it is, but they would do their chores so they would have the most points so they could decide what game we would play at dinner. Because you had to cash in your points to either listen to what music you wanted to what game you were going to play or what you were going to watch on TV kind of stuff. So tell everybody a little bit about ChoreMonster, where you got that inspiration, and just kind of like what that part of your life was like when you were in the throes of launching that product.
Paul: Yeah, this would've been in 2011ish where I had a work partner who wanted to get into the startup game and was looking to do some sort of gamification but in the kids space, and I had been drawing for fun just some monsters that were matched to a profile of a person. Like you're sporty monster. I can't remember the names-
Carl: They were so awesome. I got to find mine.
Paul: I had those a long time ago. So he said, "How about we kind of merge this into some sort of kid based gamification?" And we kind of went along the idea of what's something that parents deal with with kids or something, and chores kind of came about which was not necessarily a sexy startup market to get into, but we kind of thought it would be fun, and so did a couple companies in Cincinnati that gave us some seed funding and took off from there.
We came up with the brilliant idea to call it ChoreMonster because you know, chores and monsters, wow. It's funny now, though, still even back ... this was eight years ago, to still see monsters as a very big, if not bigger than we started, in the kids space which is kind of cool. So the idea obviously was to gamify it on a simple level, and over the years really try to learn psychologically how that would be beneficial. Not just, what's the word, not just capitalizing on something that maybe would make us money and revenue but something would actually change behavior, and I think it did actually pretty well on that front.
Carl: As somebody who used it, it changed our behavior. I mean, it became fun. We actually, my two daughters, would occasionally argue about who got to clean the bathroom because it was worth more points.
Paul: Yeah, that was the idea too is I think it would have been easy for a bigger company to be prescriptive about it. Like, we're going to give them certain things that we want to give them or that we can make money because it's a brand focused reward for a kid, and our idea was every family's too unique for us to figure that out so how about they figure out their family ecosystem and what works to motivate their kids. Because that's what I knew from my kids. Like, my kids don't fit into one. I wasn't going to be able to entice them with something that would entice someone else's kids so I kind of wanted the idea of let the parents decide what it is.
And sadly when we looked at our stats, it was almost always cash. It was like we didn't want that to be [inaudible 00:04:51], maybe like a dollar, five dollars. We're like no. Because the problem, for me and psychologically, was kids don't understand the value of money. It's just easy for parents to be like, "We're going to give you a buck," and we're like, "they're not going to ..."
Carl: But if they get to decide that you're going to put hot dogs in the mac and cheese tonight.
Paul: Yeah, or you're going to save up and earn going to a water park or watch a movie together as a family or go out to a movie or any of that. That really helps motivate a kid in a different way.
Carl: Absolutely. So the basics of it, basically you would assign points to different tasks or you could assign, I guess you could've called it money, and then whoever completed that got it, and there was a little leaderboard. It was phenomenal for us. So was this the first product you launched?
Paul: Yeah, this was the first one that was of my own making, yeah.
Carl: What was it like when you saw people start to use it?
Paul: That was pretty crazy. I mean, it was even ... Julie Bowen from Modern Family, she used it and raved about it. Then we were like, "What the shit?" It was pretty crazy like random people that we would see. Like, we would always kind of dig into the files and look, and we would see names like, "That can't be. No. You think?" Then you would maybe see the location, and you'd be like, "Maybe. Maybe it is someone famous," but she actually went onto some newspaper and talked about it.
Paul: Yeah, it was really great to see because the best thing when you design something is to have some sort of reinforcement on your assumptions, like your ... we believe that this will do something, and when it does it or goes beyond what you think, it's very surreal. Very surreal.
Carl: So you go through, ChoreMonster has some success, you end up moving on from that, and what is the post-ChoreMonster to head of design for Alchemy transition? What did you do in between that time?
Paul: Yeah, so I mean I'll be candid. I didn't leave on my own accord at ChoreMonster. It was a parting of ways based on a difference of opinion where the company should go. The company doesn't exist anymore, but sort of my honeymoon period was I went to another company in town in Cincinnati which turned out to be the biggest startup in Ohio called Everything But The House which was an auction, online auction, but for really specific estate sales.
Carl: Oh, okay.
Paul: And it was pretty interesting. I was director of user experience. I was brought on to help solidify the brand. They had done this major rebrand. They're growing in 26 cities around the United States to set up locations to get items from homes and estates and sell it online, and they're building a warehouse. Not only did I have to upgrade the brand for what was front facing and then use UX in terms of what's the best experience for onboarding, educating, getting them to find an item, getting them to bid on an item, communicating about if they're going to pick it up, when they can pick it up.
Then we had internal tools which was also really fun in terms of ingesting items because unlike anything else in the world, there is no codes, no QR codes or anything for items that were coming in.
Carl: Oh, right. What a total curveball.
Paul: So we had to make software that would help the ingestion process go faster. So we had cameras hooked into software which would take ... would be tagged immediately with items that when they were in the home they'd put a blank QR code, and they'd get photographed. So we just had to keep creating these efficiencies, eventually using machine learning to identify objects really quickly to quickly categorize, and those categories then got assigned with price ranges so that we would ... All sorts of things we were working on internally that were also amazing.
So I did that for about two years. It was a big challenge and really fun. I learned a lot of stuff about, like I said before, challenging assumptions. Little subtle things that I would never have thought to dig into that helped me think about the importance of really, really understanding everything that communicates to a user and what's going to help them with what they're doing.
One example would be when you're dealing with something that expires, right, and that's time sensitive because you want it and you want to win it, we would have a countdown that would go days. Then when it got to one day and under, it would go to hours. So let's say you're a user and you go to an item and it says it has two days left, and you're just glancing. You're not looking at any detail. You're just looking, "Two days left. Cool."
You check back, let's say, the next day, and it's gone. It's done. It's over. They would be pissed. "What the hell happened? You said I had two days left."
Carl: I would be.
Paul: That's because 25 hours would technically be two days.
Paul: And I never thought about that. I'm like oh god, there's so much flexibility within the context of what two days means, at a quick glance.
Paul: So then we had to come up with a solution of, "I guess we have to get way more granular about that. We have to show how many specific hours might be left. Not just assume that it's understood or actually accurate." So things like that where most designers would be like, "Yeah, yeah, yeah. Cool. Two days left," but then when you start to see people interacting with it you're like, "Oh my god, I see ..." There's just weird, subtle problems like that. I already was into research but even more deeply into before launching stuff how much research is enough research.
Carl: When I was going to say because with ChoreMonster, you would obviously paying attention. You were trying to understand how people were using it. You were hoping they would use it a certain way. Then you get to this opportunity with Everything But The House, and you start to understand you have to follow them a little bit and understand how they're using it, and you get to do that research. And how long were you there?
Paul: Two years. Yeah.
Carl: Two years, okay. And so then explain the Alchemy thing. Was Alchemy already up and running when you joined, or were you part of the origin process?
Paul: So yeah, it was up and running but not for very long. It's about two and a half maybe three years old, and most of the people that started it have moved on. Which is not surprising.
Carl: And explain what Alchemy is a little bit. Explain this to everybody.
Paul: This is a tough one. It's still tough for me.
Carl: It really is.
Paul: Yeah, it's very strange. So I'll go through how it was birthed. So it was brought about by people within P&G. There's an innovation sector within Procter & Gamble which is great. It's very product focused, obviously, physical product. Yeah, it's where things like Febreze and Swiffer and all sorts of stuff get born, but digitally they were frustrated with the pace of change happening within the company. They were still trading digital solutions like they were in the early 2000s, and he wanted to see if he could tackle more innovative technical solutions.
The first project he did was called Olay Skin Advisor which would take a photo of your face and analyze it to give you suggestions on makeup. They used this as a launch to start to do this with more digital innovation within P&G, and that's sort of how Alchemy was born where we're an internal agency that delivers whatever digital excellence the company's looking for whether it's these app experiences or just ... We do a lot of IoT connected device stuff where we have internal hardware people that will take, let's say, a smart whatever, a smart toothbrush, and we'll work on it, work on the software, work on making connections and all that stuff. It's really fun.
Carl: A smart toothbrush.
Paul: It's already out there. That's what Oral-B ... Oral-B has a smart toothbrush.
Carl: That's amazing. Okay, so does Alchemy only work with clients inside of Procter & Gamble or do they also have clients outside?
Paul: No, internal means we are funded by P&G. Though like an agency we have to have budgets for stuff, but it's budgets that P&G has to figure out. So they have to decide whether they would go with us or go with someone external. Which is a fun challenge.
Carl: So you pitch against external shops.
Paul: Yeah, we do. And we're not cheap, either. I mean. That's kind of frustrating-
Carl: Well, I imagine not.
Paul: Yeah, that's sort of the frustration that I'm getting into more and more is like being internal doesn't mean automatic. We still have to kind of pitch ourselves to him, but ... This is why we have spaces where we can win and I think spaces we can't win. A company that big and that old, maybe not even just a company that big and that old but just any company believes they have the knowledge about certain things. I think they really think they understand e-commerce. I challenge them on that. I think they understand e-commerce from 15 years ago, but they still try to create [crosstalk 00:14:58] based on, "Well, we've done it forever so we know," but they kind of haven't grown up past it because it's a company that has almost 100% relied on external agencies to do stuff for them.
And where like, "We don't really give a shit. If you make money, we make money, so we're going to really push you to be better," and they kind of don't like that, but that's just because-
Carl: No, but it's great though. It's great because if you truly have the product, the work matters more than the relationship, not that you're going to be a jerk, but if you can push for the better thing to do that's going to be better for everyone and better for the bottom line, that's the challenge most external shops have because they're worried about the lights and payroll.
Paul: Yeah, yeah. And we were worried about lights and payroll. I didn't know ... I don't think I really realized that when I got hired how much that would be still a part of it. So it was a weird mix of an agency but with the nuance of you're only working with one client, but Procter & Gamble's so huge. There's so many brands and so many things. It's very diverse.
Carl: Oh yeah.
Paul: But yeah, it's a big challenge because within an agency you have the autonomy to manage people how you want, but when you're an internal agency you still have people who are sort of footing the bill for you or sort of the ones you answer to. So while you try to have autonomy, there's always a little bit of pushback of, "Well that's not the way we do things." So that's been a big challenge.
Carl: And you're fit into this mold of what employees are, not what a digital agency is. We had someone who ... I won't be able to say who it was, but they worked for a large government lab. They were struggling because it could take them up to two years to hire somebody.
Carl: And it could take them up to three years to fire them.
Carl: So when they were excited about somebody, it was a minimum five year engagement. Two years trying to get them in the door and then hoping to high heaven that they were good people.
So you've got the same thing at Procter & Gamble. Not at that level, but you've got a hardcore HR, I'm sure. You've got these, I'm sure they're great benefits, and all these other things that come with it but a process that another shop might not have to deal with.
Paul: So here's another caveat. We are owned ... So we operate under a different company that Procter & Gamble. It's called API, who cares. It's really what they ... We're basically [Tide 00:17:56] laundromats so that they could hire anyone because they couldn't have the same process for hiring for these laundromats because [crosstalk 00:18:04].
Carl: Oh, okay.
Paul: So we're under that. So our hiring is completely different. So there isn't the personality tests and the FIT tests and the drug tests, and this, and that for how we hire, but like I said, we are internal so there is a lot ... We still have HR people to answer to. So we have to do still apply the same kind of hiring firing procedures in terms of ... If someone's not performing they have to be put on a certain performance watch list, or you know, you have 30 days to show improvement.
So like you said with the government stuff. So we still have that kind of stuff we have to implement, but our hiring we kind of ... that was another reason it existed. It's almost impossible to hire young talent ...
Paul: ... into P&G just because they're looking for specific people who have specific personalities and have it from a specific school. We're like we don't even care if you graduated from college. We care about your skillset, how you fit in with our culture, and so ... And we pay differently. Our benefits actually suck just because we're in the separate thing.
Carl: If you're listening, they are hiring, and their benefits suck.
Paul: Our benefits aren't great, but we pay a lot more than P&G to make up for it.
Carl: There you go.
Paul: And it's a better culture. We have an open office space, and you can bring your dog, and we don't have vacation limits, [crosstalk 00:19:34]-
Carl: You get all the trappings. You've got them all.
Paul: So right we do, we do the back and forth of ... So have that kind of autonomy, but again we are kind of seen as the other within the company. Because we're so different, people are like ... don't know what to do with us. Which isn't a bad thing, but it's a learning curve.
Carl: So big? How many full-time employees?
Paul: Around like 53, 54.
Paul: Somewhere around there. Yeah.
Carl: And you said that-
Paul: Runs the gamut.
Carl: You said it's about two and a half years old, three years old.
Carl: And a lot of the people that were there when it started have moved on. Is it a high turnover type job? Because I can imagine early on in somebody's career seeing those brands and knowing you're going to get to work on them, that's really intoxicating, right? You're like, "Oh, wow. I'm going to get to work on Swiffer," but then is it something where just because there's not newness or ... I'm just curious, what do you think led to that turnover, and is it an ongoing issue?
Paul: Well, the turnover I think was basically the ones that originally started it were frustrated with the constraints being trying to force on them in terms of, "Hey, you are still P&G. You have to represent P&G."
Carl: That's fair.
Paul: Play nice to some degree, and they're like, "I don't really want to," and then they moved on and other people went with them.
Paul: The turnover has mostly stopped. It is a hard job, though. I mean that's why I would tell anyone it's a great job, but you are working with some of the biggest brands in the world, and that is a lot of pressure. We're talking revenue in the tens of millions, sometimes billions for certain things. There is a high expectation for what you have to deliver which is very, very stressful if you think about it too much. I don't recommend thinking about it that much, but we're also working on really small things too where it's within a huge brand, but they're working on an experiment or thought about a new product in a new market and all that stuff, but it's hard because they are a big company, and they will, as much as you give they will take. Which-
Carl: And there's going to be a lot of pressure for launches because you're probably rushing with research and development doing new things, getting new features out. You have to make sure you're ready. But I can just imagine how cool it would be to actually be able to show somebody you know your work and they've seen it before.
Paul: Yeah, yeah.
Paul: It is nice. I mean, with that is you're working with ... P&G is mostly a marketing company, and they really know their stuff in marketing, but in my field and the design field, we want to know the user, and they tend to think that they do know the user.
So we always have this challenge as internal designers of how to fight for the value of our work over the marketing work in terms of they just think like, "Well we know our user." Like, you know what your user wants to buy. We want to know what your user wants to do once they've bought it. And that distinction is sometimes really hard for them to understand. Like, I-
Carl: It's such a classic trap.
Paul: It is a trap.
Carl: It's a classic trap for clients.
Paul: It is because it seems logical to think they're the same people. Because they are. But they have very different intentions.
Carl: And I mean, a perfect example of that is you look at Netflix, and my kids use my Netflix account, but they don't use it like I use it, right? It's like totally different. But Netflix is smart enough to realize that as long as they give us the flexibility individually to do what we want, my kids will want to take it with them. So my oldest daughter's going off to college now, she's going to have to set up her own Netflix account. Netflix wins. It's a long play.
Paul: They do win. That's a whole ... The passing on of brand loyalty kind of stuff. That's an interesting ... That's a P&G thing big time, actually. It's like, I've always used [crosstalk 00:23:35].
Carl: That's the ongoing wind. Yeah exactly, right?
Paul: It is. But for how long? That's another thing that P&G's dealing with is how long can you coast on your parents' or grandparents' pushing of a brand? Like, I've used Tide always, but maybe there's something more ecofriendly or [inaudible 00:23:55]. P&G is dealing with that changing tide and trying to be very smart about it, but I mean they're a huge company so an analogy I always tell them ... because they're always trying to compete with the Harry's and the Dollar Shave Clubs of the world, and they don't probably understand like, well you're ...
All right, so the analogy I've given them, and they've really liked, I literally just thought of it in one meeting. I always try to [inaudible 00:24:20] an analogy because if we could go at each other with terms, we get nowhere.
Carl: You can connect though, yeah.
Paul: So I'm like, let's just think of P&G as a giant cruise ship, and in the hull there's a lot of little leaks just all over the hull, but it's not anything to be alarmed of. It's not going down like the Titanic, and next to them is a little rowboat. And if they get a leak the same size as P&G gets, they're going down. So they do everything they can to protect themselves from against any of those little leaks so that they don't sink, and that's how they keep moving on and keep going, and they eventually bypass you because they've cared about every little thing that's going on, and then they keep growing from there.
P&G is just up there partying because they've been cruising for so long, but they're paying no attention to the leaks, and like ... I, like I said, Alchemy is there to help you pay attention to those leaks. It's not always received the way I want, but it's the best analogy I came up with at the time.
Carl: Nobody makes sense, and you also have a vantage point of what the other products and divisions are doing.
Carl: So you probably have a much better vantage over the whole realm of the digital side, and I doubt you have the entire because P&G is huge, but that's probably got to be a real resource for them to have somebody who has that knowledge.
Paul: It's also shocking to them. I would tell them, "Go to any medium sized product, and they have a team of 25-50 people focused on search within their product," and they have a team of five people building an entire brand. Like, "Hey, you five people. Build our website, and our app, and all of this." Like, they don't have the same viewpoint on how products in the digital world get made, and that's going to take a long evolution to get them to ... I mean, I don't actually expect them to go fully like another monoproduct, one that's just focused on their one thing, but it's interesting because they have just so many people who are all just thought leaders and marketing and all of this stuff that take a budget that when it comes to making, it's very small. Very, very small. Which that's always what I challenge them on. Like, you're not going to be able to be it if you're always going to put one hand behind your back.
Carl: Yeah, and you're right. It's like the loyalty only lasts so long. There's a resort in Orlando now. I can't remember if it's a Lowe's resort or what it is, but it's kind of a retro, and so you go in, and they've got like Zest and Prell, and so all these brands that the names have been sold on and on again, right, and so I sat there with my kids, and we looked at old commercials for these things like Zest Fully Clean and all that kind of stuff, and my kids just thought it was hilarious.
But I remember I used that Zest soap, and that smell hit me, and I was like, "Oh my god, I totally remember this."
Paul: Prell, I remember Prell.
Carl: Like where did it go? I mean.
Paul: Wasn't there a toothpaste that was really bright green gel toothpaste of some sort?
Carl: It wasn't Aquagel was it?
Paul: Something like that, but I remember from a long ... 70s probably, but yeah all those brands. Well P&G probably bought half of them, or Johnson & Johnson or one of the like five big CPG companies out there.
Carl: And those names are up on a shelf somewhere if they're not doing anything with them, right?
Carl: They're just holding onto them for later kind of like Atari or whatever. So you can roll it out later.
Paul: Is it all that different than what Facebook might do with a company and just buy it out and kind of be like, "yeah, we're just putting you over here."
Carl: Exactly, right? That's the thing I think in digital. We always think that what we're doing is the first time it's ever been done when it's been done in business since the beginning of time.
Carl: Right? Like, when the very first market opened, somebody was buying somebody else's product and putting it in the trash.
Paul: It's not ... Time isn't a circle. It's a corkscrew. It's repetitive but changing and moving forward, yeah, but there is like ... We repeat patterns. Things just move forward and change, but it's the same pattern.
Carl: It is the same pattern, yeah.
Paul: We just, we're like, "What's different?" Like if you get down to the root of it, it's not all that different.
Carl: So you're happy? You're challenged, obviously, and you're getting to work on some great stuff. Are you feeling like you've got the empowerment that you need and you're getting better at what you're doing?
Paul: Yes. Sorry, the pause sounded like I was-
Carl: Thank god you said yes because I was like ... What have I done?
Paul: So I'm announcing right now that I am ... No, I'm just kidding. I'm not [inaudible 00:29:09]. The challenge is tiring. Just because ... I don't expect it not to be challenging. I don't expect it not to be tiring because that's the position I'm in. I wouldn't have taken this job if I didn't know that it was going to push me. Like everything I've done has pushed me to a new level of what I am interested in, or where I can go, or how I can help. I'm at the stage now, I'm sure you're probably in this part of your life too where like ... I know I want to empower other people. Now I want to help other people. Now I want to ... Whatever shard of wisdom I might have, I would like to impart it and help people. So that's kind of what I've taken on. It's tiring, but it's totally worth it. 100% worth it.
Carl: That's awesome, Paul. I'm so happy for you, man, and I know we haven't seen each other in a long time. You're coming to Design Leadership Day so I'm excited to see you in September.
Paul: [inaudible 00:30:04].
Carl: And catch up, but thank you so much for coming on the show today and sharing this with everybody.
Paul: Absolutely. Thanks for having me.
Carl: You're welcome. And everybody listening, thank you so much, and we'll be back next week. We'll talk to you then. All the best.
Image via Alchemy