Navyblue staff agree to pay cut as agency 'evolves'

"We have been working with the bank to make sure that cash flow is continuing and that the business, as a whole, maintains its long-term future," said Douglas Alexander, one of Navyblue's Joint Group MD's.

"We have been working with the bank to determine the shape of the business since May. We are in control, but the bank has access to the accounts."

A 20 percent pay cut has been implemented across the agency, and Alexander revealed to The Drum that first the directors took two reductions in salary before asking the staff to follow suit.

"The cuts hurt, of course they do, but we are bridging a short period of time for the long term good of the business," added Alexander.

"We have a responsibility not only to to our clients and staff but to the industry as a whole. We are one of the top five independent branding agencies in the UK. We need to supply a future for up coming designers, we need to do great work for our clients and we need to provide an income to those that work for us and supply us. These have been challenging decisions to make, but we cannot put our head in the sand and ignore them.

"We spoke to all the staff about what was happening and why, about the pressures and the opportunities. Our discussions had a surprisingly galvanising effect. A vast majority of the staff responded positively - or as positively as you would expect - to the measures."

The agency is also looking to make cuts and is currently in a process of consultation. However, the number of jobs to go is uncertain, although it is thought that they will not be wide-reaching.

Navyblue now employs 58 staff internationally. Two years ago it employed 70 staff.

However, despite the cuts in the UK, the agency's international outlook continues, with offices in South Africa now joined by a presence in Oman, which will soon be looking to recruit. Navyblue also continues to persue opportunities in the Balkans, having recently been appointed by a large Ukrainian retail centre.

"We are a responsible company. And we behave responsibly. We need to support our international aspirations. And we have been focussing on this for two years now. We are being proactive. We are determined not to just survive, but to thrive," said Alexander, having just returned from five-days in the agency's Oman office.

"But we need to react to the marketplace to help us decide what we need to do, and when we need to do it.

"You can evolve or you can do nothing. We plan to evolve, using our networks - especially in the sport and leisure fields - to look for bigger challenges. And the company has to be structured best to handle these challenges. That is why we have been strengthening our board and senior team both here (with the additions of Ron Cregan and Patrick Baglee) and abroad.

"We, as a company and as directors of a company, need to re-set our own 'graphic equalisers'. We need to remember our responsibilities and our reputation. Yet we also need to manage our ambitions for growth.

"For that reason we have been looking at territories where the market dynamics are different and where our core specialisms are in high demand. The export market looks at the UK as a centre of excellence for brand and strategic communications, and London is the centre for that. We are moving into new and improved premises in London. We are adapting our group structure and practices, and there are now complimentary skill sets between London and Edinburgh, because we don't want these to overlap. We now have a well considered business structureto help service our growing international client base."

Navyblue has recently appointed a new chairman and MD for South Africa and aims to build on its previous two years of investment in the area.

"The events strategy of the South African government is working to our advantage," said Alexander. "We have a huge pipeline of prospective clients in both Africa and Oman born out of two full years of investment. The pipeline is ready to burst and we are already chasing over £3m of opportunities from these new territories. Now is the time to focus firmly on conversion and producing world class work."

"We need to seize our opportunities in an entrepreneurial way. We are learning and we learn from mistakes. International work can take longer to convert, but we have started early enough. We are committed to the long term future of the business."