Because it was BP, the Reputation Damage to the Rest of the Oil Industry is Even Worse

I have said before that reputation is the expectations that stakeholders have of a company vis-a-vis its peers and competitors. There is no better example of that than BP and the rest of the oil industry. BP spent a decade or more trying to convince us that they were "Beyond Petroleum". They redid their logo to make it look like a green flower--a symbol of its environmental commitment--and they invested in alternative energy sources. We all thought that they were the best of an otherwise bad industry. In fact, in an industry in reputation last year stood at about a -57%, according to Ipsos, (more people disliked the industry than liked the industry), BP had a positive reputation (about 11%). In other words, people thought that BP was vastly different from the rest of the industry. BP differentiated itself with a brand promise that enhanced expectations. Over the years, they seemed like the good actor. All along, they actually were like the nice neighbor who turns out to be a serial killer in waiting. BP lived one way publicly while having a very different culture internally.

So, is it any wonder that members of Congress were not impressed when the executives of the other oil companies came before them arguing that they would never have drilled the area the way BP had done. "You can trust us", they said. We would have done it better. The problem is that no one believed them. Why would they? As I noted before, they collectively are the -57% reputation of the oil industry. If the perceived best of the group did what BP did, then what would one expect of the others?

I know that there are many in the Gulf who make their living in the oil industry and that the moratorium on drilling that the President put into effect is of concern to them. There are those who claim that it is illogical to penalize an entire industry because one company made a mistake; or that others are following the rules and regulations in drilling. I can understand the angst of these folks who are connected with the oil industry. But, there is no trust. There was no trust before for anyone other than BP. That trust has been totally eroded and with that it has put the rest of the industry in even worse shape. If this had been another oil company other than BP with this accident, the impact on the others would not have been so severe. But, expectations were set by one major player. For better or worse, the rest of the industry is now living with that situation.