By PETER S. GOODMAN

Whoever suggested that all publicity is good publicity never envisioned the wave of catastrophe engulfing three high-profile corporations over the last year.

The carmaker Toyota, the energy giant BP and the Wall Street icon Goldman Sachs have laid waste to some of the most meticulous reputations on earth.

“These were real reputational implosions,” says Howard Rubinstein, the public relations luminary who represents the New York Yankees and the News Corporation. “In all three cases, the companies found themselves under attack over the very traits that were central to their strong global brands and corporate identities.”

For the crisis management industry, the calamities have served up a lifetime supply of case studies in pitfalls to avoid when disaster arrives.

As conventional wisdom has it, the companies worsened their problems by failing to heed protocol: when the story is bad, disclose it immediately, lest you slide into the death spiral of lost credibility.

In the view of many who are paid to extract corporations from terrible situations , Toyota, BP and Goldman exacerbated their woes by declining to confess promptly, casting blame elsewhere or striking adversarial postures with the public, the government and the news media.

“Companies that typically handle crises well, you never hear about them,” says James Donnelly, senior vice president for crisis management at the public relations colossus Ketchum.

But Eric Dezenhall, a communications strategist in Washington who worked in the White House for President Ronald Reagan, argues that the standard strategies are useless when the facts are sufficiently distasteful. ( He once represented Michael Jackson after allegations of child molestation.)

When the facts are horrible, he argues, the best P.R. fix may simply be to absorb the pounding and get back to business. “The two things that are very hard to survive are hypocrisy and ridicule,” Mr. Dezenhall says. “The goal is not to get people not to hate them. It’s to get people to hate them less.”


Deflect and Deny

Those in crisis management generally agree that the three companies committed grievous errors. At the top of the list is BP .

“It was one of the worst P.R. approaches that I’ve seen in my 56 years of business,” says Mr. Rubinstein. “They tried to be opaque. They had every excuse in the book. Right away they should have accepted responsibility and recognized what a disaster they faced. They basically thought they could spin their way out of catastrophe.”

Not so, protests the energy company. “From the beginning of the crisis, BP stepped forward and accepted responsibility,” says Andrew Gowers, who oversees BP’s communications. “We mounted a massive maritime response. It was the largest response there’s ever been.”

Among BP’s missteps, strategists cite its effort to deflect blame to contractors. That made BP appear as if it were focused on legal liability rather than on the families of the 11 rig workers who died in the explosion, and communities that draw their livelihoods from the gulf. (BP declined to comment on such assertions.)

Many analysts fault BP’s British-accented chief executive, Tony Hayward. When he apologized to those harmed , he added, “I’d like my life back.” Eventually, he was forced to step down.

The company was receiving contradictory advice. In times of crisis, c ommunications strategists mollify public anger with expressions of concern, while lawyers warn that contrition can be construed as admissions of guilt in potentially expensive lawsuits.

Yet, in the end, “Until the oil stopped, there was nothing that could be done to make it better, but there was plenty that could be said to make it worse,” says Keith Michael Hearit, a communications professor at Western Michigan University in Kalamazoo.


Squandered Good Will

Toyota was in a stronger position, strategists say. It enjoyed immense good will. It was the world’s largest automaker, with reasonably priced cars that delivered excellent fuel efficiency and performance. It also had the cultural stereotype of the disciplined Japanese corporation with uncompromising standards.

Strategists are amazed that a company with Toyota’s reputation repeatedly dismissed reports of problems with its accelerators that led to fatal accidents. The automaker then begrudgingly confirmed bits of evidence, ensuring that the story would play out in damaging increments.

“Toyota blew it,” says Brad Burns, who ran communications at WorldCom, the telecom giant leveled by a 2001 accounting scandal. “Rather than put public safety over profits, they appear to have listened to the product liability lawyers and they totally lost it. ”

Toyota’s communications coordinators say the company never ducked problems .

Like BP, Toyota had a non- American C.E.O. As he apologized to Congress, Akio Toyoda spoke heavily accented English and read haltingly from his notes. “I said at the time, ‘Oh my God, he’s not communicating with us,’ ” recalls Mr. Rubinstein.

But Mr. Toyoda’s Congressional performance may have also reinforced another Japanese stereotype: an aversion to shame.

One strength of humans is the ability to learn from mistakes . But corporate bureaucracies tune out sentiment in the pursuit of profit. “They have no soul to kick,” says Mr. Hearit . “You can’t put a corporation in jail.”

Crisis management is conducted with stress and sleeplessness layered atop the usual factionalism and politics afflicting any big organization. “The reality is absolute chaos,” Mr. Dezenhall says. “A corporation in crisis is not a corporation. It is a collection of panicked individuals motivated by self-preservation.”


Stonewall on Wall Street

If there was panic and chaos inside Goldman Sachs, the company kept it hidden.

Yet in opting to yield little and mount an aggressive defense, the company appears to have turned itself into a symbol of Wall Street deceit. In July, Goldman agreed to pay $550 million to settle federal securities fraud charges.

Given the loss of jobs, homes and savings , Wall Street was bound to face sharp questioning about its role in the financial collapse. And Goldman faced an added complication in that its business was arcane . Goldman saw its troubles aggravated by its C.E.O., Lloyd C. Blankfein, who told a reporter that he considered banking as “God’s work.”

Analysts say Goldman’s P.R. woes are compounded by a reality bigger than any one institution. “It’s a problem of making obscene amounts of money in ways that no one understands in the middle of an economic meltdown,” suggests Mr. Dezenhall.

“I don’t think there is a way to make people love a bank that earns money in the middle of a recession.”


Back to Basics

“These companies made the same mistakes,” says Mr. Rubinstein. “They broke the cardinal rule of crisis management: They didn’t seem to have a crisis plan in hand. They sought to minimize the extent of their problems, and they never seemed to display an understanding for the situation they were in.”

But maybe they did understand, and there was nothing they could do short of returning to the fundamental s : making petroleum products, making cars, making money.

“You have to have a realistic expectation of what communications can accomplish,” says Mr. Dezenhall. “Nobody ever says: ‘Oh, that’s wonderful communications. We feel good now.’ ”






CHIP SOMODEVILLA/GETTY IMAGES, TOP; SEAN GARDNER/REUTERS, CENTER;
EVERETT KENNEDY BROWN/EPA
Three stellar companies suffered tarnished reputations in their
handling of crises. C.E.O.’s Lloyd Blankfein, top, of Goldman
Sachs; Tony Hayward of BP; and Akio Toyoda of Toyota.