Quotes of the Day

If you thought things couldn't get any worse for BP, think again. Three months after the Deepwater Horizon explosion caused up to 184 million gal. of oil to spill into the Gulf of Mexico, BP thought it had finally managed to stop the flow on July 15 — until company and U.S. officials cautioned on Sunday, July 18, that while the cap is holding, there are signs of possible leakage on the sea floor. And BP is already facing cleanup and legal bills to the tune of $60 billion. But a company worth $350 billion can survive a hefty financial hit. The damage to BP's image, however, is far more costly — and will take much longer to fix.

A lot of the blame, say public-relations experts, falls on BP's executives. "It's astonishing in today's media-savvy world that such a colossal and ongoing p.r. mess can be made," says James Herring, co-founder of the London public-relations firm Taylor Herring. "It's left people in the p.r. industry scratching their heads." BP had a public nightmare on its hands the moment the rig blew up on April 20. Since then, say experts, the company has exacerbated its situation with critical missteps that could affect it for years to come. "The brand-image costs will be there for a long, long time," says Nirmalya Kumar, professor of marketing at the London Business School. "For years, the first thing people will think about when you say 'BP' is the spill."

Among BP's blunders, says Kumar, was its ignoring what he calls "the four c's" crucial to crisis management: candor, compassion, commitment and contrition. Here, according to Kumar and Herring, are BP's biggest p.r. mistakes so far — and how the company can fix them:

Downplaying the news: Until the disaster became too big to ignore, BP downplayed it so much that some people might have missed the news altogether. On April 27, a week after the Deepwater Horizon exploded, BP released its earnings statement for the first quarter of 2010, with news of the disaster stuffed into three sentences at the bottom of page 4, underneath several paragraphs about acquisitions and a rocketing 135% profit increase over the previous quarter. It failed to mention that 11 workers had been killed in the explosion. One of the three sentences about the accident read, "BP is committed to doing everything in its power to contain the environmental consequences of the incident." But the statement offered no information about how serious the incident was. So much for candor.

Being tone-deaf: Even after the scale of the disaster became clear, BP seemed unaware of the depth of anguish about the explosion. "There was a complete misjudgment of public sentiment," Herring says. As an example, he points to the moment on May 30 when BP CEO Tony Hayward told reporters in Louisiana, "I would like my life back." Despite the furor that remark caused, a month later — with the well still spewing oil into the Gulf's waters — Hayward was photographed vacationing on his yacht during a race off England's Isle of Wight. A BP spokesman said Hayward was "spending a few hours with his family ... I'm sure everyone would understand that." They did not. Herring believes the yacht image "derailed" BP's attempts to get its public relations back on track. In comparison, Kumar and other public-relations experts cite Johnson & Johnson as a model for companies to follow: in 1982, when Tylenol Extra Strength tablets were discovered to be tainted with cyanide, Johnson & Johnson executives attended the funerals of the seven victims and were filmed weeping at the gravesides. That's the type of compassion BP has been seen to lack.

Hiding behind green: The branding company Landor redesigned BP's logo in 2000, creating a green-and-yellow sunflower whose purpose, says Landor on its website, was to cast BP as "an environmental leader [with] a goal of moving beyond the petroleum sector." Oops. The fact that BP has for years presented itself as an environmentally friendly company "has made the oil spill even worse," says Kumar. "You talk green, green, green, but you are still a big oil company," he says. "It is almost as if they wished they were in a different business." The chasm between image and reality makes people question BP's sincerity, he adds. Strike three on commitment.

Blaming others: During a televised congressional hearing on June 17, Hayward said he was not to blame for the safety failings of the Deepwater Horizon since, as chief executive, "I was not part of the decision-making process." He won over few lawmakers on Capitol Hill that day. Republican Representative Phil Gingrey of Georgia accused him of "copping out," while Democratic Representative Henry Waxman of California told him he was "kicking the can down the road." What Hayward should have done, says Kumar, was "to right away admit and assume responsibility," which would have shown the contrition Kumar thinks is vital to restoring BP's image.

Hayward's failure to make friends among U.S. politicians could present new problems for BP on an entirely different front — Libya. BP admitted last week that while negotiating a $900 million energy deal with Libya, its executives had expressed their concerns to British officials about Abdel Basset Ali al-Megrahi, the Libyan convicted of the 1988 Lockerbie bombing, whose imprisonment in a Scottish jail threatened to complicate the deal.

The Scottish government freed al-Megrahi last August on compassionate grounds after he had spent eight years in jail for his role in blowing up a Pan Am jet, killing 270 people. At the time, doctors had given al-Megrahi, who suffered from prostate cancer, no more than three months to live — nearly a year later, he is still alive, living in a sprawling new house in a Tripoli suburb. With BP's image now in tatters, the company's role in the affair has surfaced as a source of fresh anger. The Senate Foreign Relations Committee said Thursday that it would call BP officials to testify at a hearing on al-Megrahi's release on July 29.

To begin repairing BP's reputation, both Kumar and Herring suggest flooding journalists with constantly updated information about the Deepwater Horizon — a step the company has already taken by placing footage of the cleanup efforts on its site.

Once the oil spill has been contained, BP "needs a total brand overhaul," Herring says, including even a name change "in order to hit the delete button on the bad history." And both Kumar and Herring predict BP will get a new CEO once the oil spill is over — most likely someone unconnected to the current management. As for Hayward, "I don't think [he] will have a second career in p.r.," says Kumar.

• Vivienne Walt
• The oil spill in the Gulf of Mexico has BP living a p.r. nightmare. One day, the cleanup will be done and the compensation paid -- but will that be enough to save the company's reputation?