Navyblue Feature Scotland

Navy Blue restructure

By The Drum | Administrator

March 27, 2008 | 8 min read

The wide navy blue yonder

“And frankly this has stayed with me, and my therapist says the fear of just not doing enough always will. And that explains my relentlessly driven lunacy.”

But there is no doubt he has managed to harness this energy to build one of Scotland most successful design businesses, alongside co-founder Geoff Nicol; who is currently in charge of the company’s London office. Navy Blue, which also has an office in Budapest, now employs 69 people and boasts a turnover of around £7.2m

Global Player

It has worked for major brands and products such as the London Olympics, Glasgow’s Commonwealth Games bid, Reebok, Tottenham Hotspur and Orange to name just a few. Its stated ambition is now to become a global player.

But not all is rosy in the Navy Blue garden. Despite growing turnover, its profit and loss account also shows it is getting deeper into the red. This performance has been the catalyst for a reorganisation which included closing a loss-making office in Leeds and making nine jobs redundant in London; which will save over £450,000 a year.

However, there is no sense of panic. In fact one genuinely gets the feeling, for once, that the term ‘restructure’ in this instance is more than a euphemism for cost-cutting.

“These changes are not about saving money,” said Alexander, “It is about becoming more efficient and deciding who we really are.

“Up until now our model was to replicate the whole of Navy Blue in each of our offices. This restructure is about simply becoming one company – at the moment we have six profit and loss accounts for example, from now on we will have just one.”

It will also mean a consolidation of the various departments – the company will have one creative team for example, and one research and planning structure. The headline catching consequence of this is the loss of nine design jobs in London, as the work is transferred to Edinburgh under the creative stewardship of Jonathan Evans.

“London will effectively become our shop window,” said Alexander, “senior creatives and strategic thinkers will be based there, and the design team in Edinburgh will then be used to create the final product.

“To service this we will be recruiting two senior designers and a design director to work out of Edinburgh. That will give us a team of 12 designers, plus five design directors.

“It is a far better structure. Trying to duplicate everything across our offices put tremendous pressure on our board.

“And you can see that from the fact that we have not been particularly efficient. Our turnover is up slightly, but our profits are down. But interestingly if you chart a graph downwards to reflect our profits, you can also chart a graph upwards that shows our profile. Our reputation is wonderful, worldwide, at the moment.

“If you ask any football club, for example, they will have heard of Navy Blue, or any city that is considering a major sports bid will have heard of us too.

“So we believe we have a window of opportunity at the moment. Clients are buying Navy Blue – not Douglas Alexander in Edinburgh or Geoff Nicol in London. This re-positioning will allow us to take advantage of that.”

The new strategy is based on two core beliefs; the fundamentals of design are changing, and so too are the fundamentals of the economy. Navy Blue wants to reduce its exposure to the UK domestic economy by positioning itself as an international player.

Says Alexander: “Geoff and I are graphic designers and assumed we would always have graphic designers around us. In many ways we were a boutique. But now we believe clients are not looking to buy design – what they want is effective solutions.

“In fact at the top level there is very little to differentiate the top players in terms of their design output. What really differentiates them now is the quality of their thinking.

“That is why from the 1 May we will reposition ourselves as an international brand communications company. We are more Wolfs Ollins and less Graphic Partners.”

Over the course of the next 12 months Alexander aims to boost Navy Blue’s proportion of overseas turnover, which currently stands at 9 percent of the whole, to over 50 Percent.

He plans to achieve that by building on the company’s international reputation which has grown through projects like the London Olympics bid.

“All the research shows that international clients want to buy the best creative thinking, and they believe that thinking is in the UK; or more specifically London. But the international market is where we believe the opportunity is, where the money is.

“For example we have 19 proposals going into Bulgaria and Kazakhstan worth around £1.65m in fee income – thanks to our joint venture in Budapest. But we also have proposals in Africa which are worth £2.5m, and if they come off it would lead to setting up Navy Blue Africa.

Business Pipeline

“The new business pipeline is great. However, there is a risk. And that risk is how to validate the opportunities, basically assess if you are going to get paid. That is why we have set up an Ignition Team in London.

“Their role is to look at the opportunities, decide what requires done and whether or not we need to work with a partner. A key part of the strategy will be setting up a network of international partners.

“However, if they believe our chances of success are less than 50 percent, we will not even send in a proposal.”

You can understand their determination to look at the international market for the Scottish scene continues to shrink. One of their largest clients S&N was recently acquired spelling an instant end to the business, including a brief to produce the company’s annual report.

“However, Scotland will remain important,” says Alexander. “For example, Navy Blue in common with every other design company in the market has just completed the Scottish Government tender.”

Alexander was speaking from Navy Blue’s impressive offices in the former Corn Exchange in Leith. The grand, stark white interior, complete with a series of mezzanine levels, designer furniture and even a functioning art gallery, does make such talk of global domination seem more credible.

Of course Alexander himself is as forceful as ever. To many who have known him through the years he has changed little. Still restless, unable to sit still, he gives the impression of being a young boy trapped in the body of a middle-aged man.

Arrogant little shit

As well as bad school report cards, he also got off to a bad start in the business, which might also add to his restlessness. “One of my first jobs was at Tayburn,” he remembers. “But Andrew Hunter and Erick Davidson took me aside one day to say it was not working out. They fired me, and to be honest I probably would have fired myself, as I was an arrogant little shit.

“But I found myself out in the market and I went down to see Vic Covey at Covey Advertising. He looked at my book and said, and I remember this, ‘I’m sorry son, but perhaps you should think about giving up getting a job in this business. Your work is really not very good’. I was distraught.”

From this unpromising start he got himself a job in an advertising business before finally returning to design working in such places at Graphic Partners, Pointsize and Davis before launching Navy Blue in 1994.

“We started with six people,” he said, “Now we have 69. And over the next few months that will grow. In the next few weeks we will be able to announce a major appointment in London – somebody coming in on the strategic creative front.”

He will join Ron Cregan, who joined Navy Blue as business strategy director from Identica last year. It is the sort of investment he believes others in the Scottish design industry should consider making.

“People really have to stop bleating about accounts such as Royal Bank of Scotland moving to London and start asking themselves why. The answer? It’s because they simply feel they have to.

“That is not the client’s fault. It is the industry’s fault for not presenting itself in a consistent and coherent way.

“At the moment if I was a client I could buy an annual report from Teviot for say £4,000, from Third Eye for £12,000 or from Navy Blue for £35-£100,000.

“So why would you buy from us, when at the end of the day their might not be that much difference between the various layouts? It is because what you are buying is our understanding of what the client really requires and needs.

“Agencies have to start investing in this sort of research and thinking. If they don’t what we will end up with is an art club as opposed to a design industry.”

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