The oil companies have not had an easy year of it. Between constant bashing at the hands of the Democrats and the media, the record gas prices coupled with record profits, and
the BP pipeline fiasco, it was hard to find a reputation left untarnished.
But when the dust had settled, BP was a relative winner and Exxon was in the tank, so to speak. According to the Wall Street Journal's annual ranking of corporate
reputations, Exxon ranked second to last, while Royal Dutch Shell saw the biggest improvement and BP was 52nd (out of 60). Not a huge difference, but a significant one considering
that one could argue that BP's coverage was drastically more negative, at least in the past few months.
The reason is consistency. For nearly a decade, ever since the merger of BP and Amoco in 1998, BP has consistently sounded the alarm about global warming and bolstered its
position as an environmentally friendly company. Its CEO Lord John Browne has enjoyed a high profile as an environmentalist, and overall the decades-long campaign has worked.
So, when the pipeline broke and several investigations into a deadline oil refinery explosion painted the company as negligent, its reputation certainly suffered. Lord Browne
announced that he was opting for early retirement shortly thereafter, which compounded the crisis atmosphere, even though he claimed his stepping down was unrelated to either the
pipeline problems or the findings of the explosion investigation.
Nonetheless, almost every article continued to cite the company's reputation for environmentalism and corporate social responsibility, and it was the second highest-ranking oil
company in the Wall Street Journal survey, consistently outscoring Exxon on issues of trust and ethics.
In contrast, Exxon has for years funded think tanks and research project that deny the reality of climate change, and it has thumbed its corporate nose at environmentalists and
others who boycotted its products in the wake of the Exxon Valdez spill.
As a result, its reputation has clearly suffered, and recent attempts to improve it, including full page ads in The New York Times, have been greeted with
skepticism and deemed nothing more than "green washing."
The lesson is clear: In any industry where the risks to the environment are enormous, crisis is a common occurrence, but critics are more likely to forgive you if you are able
to demonstrate consistent concern for the environment and society.
Contact:
Katie Paine,
603.868.1550,
| BP | |||
|---|---|---|---|
| Criteria | Grade | Comments | Advice |
| Extent of coverage | F | The pipeline disaster was followed closely
by the findings of a federal investigation into the 2005 Texas refinery explosion that charged the company with negligence, so the negative news lasted for months. |
When crisis follows crisis, the media tends
to see patterns and blames management. No matter how good your image is, two crises in a row will be seen as a sign of bad management. |
| Effectiveness of spokespeople | A | Lord Browne accepted responsibility and
was appropriately contrite; in addition, he effectively communicated the company's environmental and socially responsible positioning. |
Media training can work (if you have any
doubts, just watch the video of Bill Gates on the Daily Show; he was downright almost normal). However, there is no substitution for a great spokesperson that understands the importance of one's reputation and the media's impact on it. |
| Communication of key messages | B | Many of the articles cited BP's strong environmental
efforts and concern for employees. |
If you have good relationships with the
media and a proven track record, you can get your messages out amongst the bad news. |
| Management of negative messages | C | Much of the good reputation news was wiped
out when a special report found that the company's cost-cutting had created a culture of cutting corners and not making needed repairs. |
It's hard to avoid negative messages when
you actually deserve them, so don't try to "spin" the story. Just accept the facts and show contrition. |
| Impact on customers | B | Can't tell. Demand for gasoline is driven
in part by the price at the tanks; given the price fluctuations, you'd be hard-pressed to draw any conclusions. |
If you're selling at retail value, it would
be wise to poll the customers to determine what short- and long-term impact the news is having on them. |
| Impact on shareholders | D | The combination of disasters and the stepping
down of Lord Browne have resulted in shareholders' losing faith in the company. The share price is at its lowest point of the year. |
Shareholders don't necessarily get nervous
at a crisis, but they always get nervous when a popular CEO goes away or steps down. |
| Impact on employees | D | The impact of the investigations probably
had the highest impact on the employees, since it backed up what many of them knew to be true. |
It's one thing to say you're committed to
worker safety, but if the workers themselves see otherwise, your words are all "sound and fury, signifying nothing," as Shakespeare would say. |
| Overall score | C | Protecting the environment and addressing
global warming wins over a lot of hearts and minds. Even though their reputation suffered, it probably didn't suffer as much as it might have without the decades-long emphasis on good deeds. |
Nothing will protect your reputation entirely
in a crisis, but good deeds, corporate social responsibility and environmentalism can cushion the fall so you don't break when you hit the bottom. |
|
Exxon |
|||
|---|---|---|---|
| Criteria | Grade | Comments | Advice |
| Extent of coverage | D | The biggest crisis Exxon faced this year
was soaring profits, which many would not consider a crisis at all. |
You know you have a reputation issue when
the media considers soaring profits to be a problem for your image. |
| Effectiveness of spokespeople | D | Spokesperson Ken Cohen and CEO Rex Tillerson
are trying hard, but they are being met with skepticism. Most critics see the move as a calculated response to the new climate in Washington and the growing threat from protesters. |
A tiger doesn't change its stripes overnight.
If you are trying to change course and take appropriate actions to back up that change in culture, it may still take years before your image actually improves. |
| Communication of key messages | D | The message is that the shift in position
is "nuanced" - not exactly a strong message, but the company is definitely being seen as softening its image. |
Exxon's is actually a smart strategy. To
suddenly appear as green would be totally unbelievable, but a gradual shift in policy is clearly something the media is willing to swallow. |
| Management of negative messages | F | Stopping funding to controversial groups
and the softening of its stand on climate change is widely seen as a calculated move, and reporters are consistently bringing up its bad environmental tactics of the past. |
You can't escape a long track record. |
| Impact on customers | D | There are signs that with the growing concern
for climate change impacting consumer opinion, ultimately political opinion is going against Exxon. |
Consumers don't just buy your products;
they also vote, protest and file lawsuits, so you do need to pay attention to them. |
| Impact on shareholders | B | The stock price has been steadily increasing
all year, thanks in part to high profits and high gas prices. |
Profits always make Wall Street happy. |
| Impact on employees | C | It's hard to tell what employees think,
but any time the CEO shows him or herself more willing to listen to the outside rather than "thumbing the corporate nose" is probably an improvement. |
It all starts at the top; if a CEO shows
him/herself as compassionate and willing to listen, employees will be more likely to support his/her decisions. |
| Overall score | D | Exxon has clearly made an effort; whether
the media or the public or Washington will buy it remains to be seen. |
Public relationship-building is a long term
process. It only takes a few minutes to destroy a reputation; it takes years to change one. |