(FORTUNE Magazine) – IF YOU DOUBT that bad press can wound a company, consider what is happening to Exxon. Since the Exxon Valdez dumped 260,000 barrels of crude oil into Alaska's Prince William Sound, TV and print reporters have portrayed the world's third-largest industrial company as an uncaring, incompetent, penny- pinching despoiler. Almost everything Exxon says and does -- from criticizing the Coast Guard to running stiffly worded apologies in the press -- seems to make matters worse. Shareholders, including some heavy-hitting institutional ones, have attacked the company and even demanded CEO Lawrence Rawl's resignation. Rawl's conclusion: ''Our public image was a disaster once that ship went on the rocks.'' True enough -- but inept public relations has made it worse. Had Exxon followed the guidelines listed on page 72, it surely would be better off. So would any corporation that finds itself in the public eye, as nearly every major company inevitably does. Those guidelines tell how to implement the basic truth of handling the press: You must realistically appraise your own situation as well as that of the journalists who have to describe it. Sounds easy. It isn't. Avoiding Exxon's fate requires adopting attitudes that will lead you to the right behavior. Says Roger Ailes, former media adviser to George Bush: ''Many executives don't see PR as part of their job description. They should.'' Step one is to acknowledge the public's legitimate interest in your affairs. Not just the general public, which may prefer to ignore you much of the time, but also employees, investors, bankers, legislators, regulators, neighbors, friends, and family. They read newspapers and magazines. They watch TV. Next, try to understand the press, just as you would a competitor. News & organizations earn their keep by producing stories that attract audiences, and thus advertisers. Deadlines are tight because news is most valuable when it's fresh. A journalist who calls you might have no more than an hour to finish his or her reporting; you might have to interrupt an important meeting to respond. Inconvenient that may be, but it sure beats being dragged through the mud. To the extent that time allows, think before you talk -- but do talk if you possibly can. Even when you can't answer questions, as when SEC rules prohibit disclosure, return the reporter's call. Saying little is better than saying nothing, and explaining why you can't talk is better than stonewalling. Remember that the reporter is human too. He or she will form an impression of you based on how you behave, and first impressions are hard to change. If you treat reporters courteously -- who knows? -- they may return the favor. To win positive press, you can't just wait for the phone to ring. If you think you have a good story, sell it. But treat journalists as you would customers: Try to understand their needs. Forget about press releases. Restrain yourself -- and the people you pay to praise you -- until you have a story likely to interest others. Decide whom to share it with: News organizations compete for a living, and they value most what no one else has. Give your story to the reporter you judge most likely to get it right. If a number of able people cover your company, try to parcel out the goodies in roughly equal measure. At all times, advises Gerald Meyers, former chairman of American Motors and now a consultant on crisis management, ''kill them with kindness.'' DON'T THINK of the press as a monolith. When irate businessmen complain about ''the media,'' they are often thinking of television. But even TV is far from monolithic: You can expect different treatment on CBS's 60 Minutes from what you'll get on ABC's Nightline -- and your local TV news shows are something else again. The CBS program is put together in the editing room, where your influence may be nil. Audi's U.S. sales have slid 69% since 1986, when 60 Minutes aired a blistering story on unintended acceleration in the Audi 5000. Today Audi of America CEO Richard Mugg complains, ''Our people talked to 60 Minutes, but their intelligent comments were edited out.'' Nightline, on the other hand, is carried live. Most local TV stations and the networks' evening news shows use a format so condensed that you may get no more than one sentence on the air: the renowned ten-second sound bite. Ridiculous, perhaps, but a fact of life. One reason so many executives fear television is that in its haste to communicate, it often treats them roughly. Says Nightline anchor Ted Koppel: ''There are lots of people who clearly are brilliant leaders in the corporate world who don't communicate very well with people they can't order around. They are right to be afraid of television, because TV sees right through that. If they come on a program, they should expect to be worked over.'' A CEO may not find that prospect enticing. Don Hewitt, executive producer of 60 Minutes, characteristically goes much further than Koppel: ''If you have anything to hide and are the least bit unsure of yourself, don't go near the press. If I went into PR, my business would center on telling people to say no.'' Hewitt goes too far. There are sound reasons to appear on TV. When a company urgently needs to communicate with a mass audience, TV can be a godsend -- as it was for Johnson & Johnson during the Tylenol scare. Recently retired CEO James Burke helped save the brand with his frequent appearances. Says he: ''If you've got nothing to hide, I don't see it as risky at all.'' Often TV appearances simply can't be declined without giving the impression of stonewalling. Video press releases -- the canned statements that Drexel Burnham Lambert and other companies sometimes distribute -- are easy to control, but TV stations sometimes try to avoid or discredit them. Better to train one of your senior officers in the ways of video and make him or her available. The print media, while less fearsome, are harder to avoid. Most major corporations routinely deal with trade publications, newspaper beat reporters, and the national magazines. Repeated contact with the companies they cover can make print journalists more knowledgeable and their reporting more balanced. Executives who deal regularly with the business press generally agree that it has become more professional and sophisticated in the past decade. Still, journalism as a whole suffers from what one PR man dryly terms ''low barriers to entry,'' as well as a tradition of on-the-job training. To be sure, standards are high and competition fierce at the major publications and broadcast outlets, and some business journalists have MBAs. But one of a reporter's main qualifications remains the ability to persuade an editor to hire him or her, and even the best publications occasionally field reporters whom businessmen justly regard as scarcely competent. Complains a veteran newshound who became an airline PR man: ''It's surprising how few reporters know anything about what they are talking about.'' To the degree his charge is valid, it highlights the need for executives to educate the reporters who cover them. The task ranges from holding meetings with editors to sitting down with a reporter for an hour or so and patiently explaining why you used pooling-of-interest accounting in your latest acquisition. Such efforts are time-consuming and sometimes boring, but in the long run they pay off in better stories. An executive is wise to approach new relationships with reporters cautiously. At the touch of a button, anyone with access to a database such as Nexis can call up stories from hundreds of publications, making it easy to research a journalist's work. If doubt remains, pick up the phone and talk to someone whom the reporter has already interviewed. Nothing, however, beats a personal relationship. Never assume that a reporter's interests are aligned with yours. Journalists are peculiar in some ways; for example, many a reporter is not highly motivated by money. According to TJFR (The Journalist & Financial Reporting), a business-press newsletter, print journalists start out earning roughly $29,000 a year and average $48,000. Talented journalists top out at levels well below what they might hope to earn in other fields. The disparity may not itself be important, but it suggests the breadth of the gulf that distances reporters from their subjects. Remember -- and this often isn't easy -- that that humbly paid reporter is the one in control. Present your case and respond to questions with all the charm and conviction you can muster, but don't relax completely. It's hard to know what the reporter thinks, so ask. Usually you'll get a straight answer. It's particularly useful to ask a reporter what he or she feels the negative points of the article will be, so you get a chance to respond. Any PR consultant will tell you to start worrying when the reporter closes the notebook on the way to the elevator: That's when countless interviewees let down their guard and utter terribly damaging statements. When Truman Capote, a reporter of consummate skill, profiled Marlon Brando for the New Yorker, Capote softened him up by recounting intimate, even lurid, details about his ; own life -- and Brando responded in kind. Capote of course printed mainly Brando's side of the conversation, and the remarkably revealing story horrified the actor. In this strange relationship you are not the only vulnerable one. Dean Rotbart, 32, a former Wall Street Journal reporter who publishes the TJFR newsletter, says, ''Reporters can be bought,'' and cynically suggests that executives start shopping. Money, he notes, is rarely the medium of exchange. Most often the currency is information, which executives possess and reporters need. In return for sharing what they know, executives expect fair treatment in print. Some get more. Rotbart points out that inside trader Ivan Boesky and his accomplice Martin Siegel routinely shared information with many reporters on the Wall Street beat, while Michael Milken, the dethroned king of junk bonds, remained aloof. For years, argues Rotbart, the press seized every available shred of damning information about Milken, yet ignored signs that Boesky and Siegel might be crooks. The rules of dealing with the press become doubly important in time of crisis. Audi said little after 60 Minutes' devastating report, then seemed to blame its customers for their injuries by citing driver error as the culprit. ''We were rolled over till we looked like a toad on a highway,'' says Mugg, the car company's fourth U.S. chief executive in less than two years. He has changed course dramatically, castigating the press and planning to advertise the results of a recent study by the National Highway Traffic Safety Administration that buttresses Audi's case. He may be too late. The biggest mistake a company can make is to recoil from the truth. It is a normal human reaction and, according to a former journalist who runs public relations at a major Wall Street investment firm, a common problem for executives. ''I never see lies and deception,'' he says. ''Most people in the corporate world believe in what they do. But there's a lot of self-hypnosis.'' DECLARING WAR on the press, tempting as it may sometimes be, is a game you can't win. Says crisis consultant Meyers: ''You can't fight the press -- it's foolish even to think about it. It is bigger than you no matter how big you are.'' Forbidding future contact with an organization you feel has mistreated you usually accomplishes nothing. Even married people can get divorced, but you and the media have no choice but to go on living with each other. Much better to try to talk things out. Textbook case on how not to deal with the press: Exxon's unfortunate handling of the Alaska oil spill. The crisis merits study, for its lessons apply broadly to press relations. When Rawl argues that he faced a PR disaster as soon as his ship hit the reef, he has a point. But Exxon's blackened image also stems from an apparent inability to accept full responsibility for its mistakes, an attitude that fostered a deadly series of PR blunders. Exxon's reputation might have survived the spill if Rawl, a forceful and hitherto highly regarded manager, had only grasped the problem he faced. The essence of Exxon's wrongheadedness shows up in the well-intentioned full-page ads the company ran ten days after the accident. Rawl, who signed the ads, preceded his apology with an assertion that Exxon had acted ''swiftly and competently'' to clean up the spill. Perhaps -- pending investigations will determine the answer -- but that claim seemed to be contradicted by overwhelming evidence of Exxon's incompetence, from the unqualified third mate steering the ship to the inadequate cleanup plan. The journalist who visits Exxon finds earnest, chastened executives -- but no one willing to admit how badly the company's operations people screwed up. Elliot Cattarulla, VP for corporate and public affairs, eloquently misses the point: ''We have always prided ourselves on being quietly competent. We depended on our competence and performance shining through. Maybe we should have been more vociferous.'' On the contrary -- the company should have acknowledged its mistakes and put the problem behind it. In context, the apology had no heft. Rawl's inability to consider his situation from the public's point of view led to much folly. At first he seemed to be hiding from the press. The only way to seize control of a situation like this is to step right into the spotlight and fess up. Instead, for six days, as reporters around the world spread the news of wheezing waterfowl and oil slicks the size of states, the most visible Exxon spokesman was Frank Iarossi, the head of the company's obscure shipping division.

Then, when Rawl entered public view, speaking to PBS's MacNeil-Lehrer Newshour, FORTUNE, and others, he sometimes made matters worse with heedless remarks. On CBS This Morning, for example, he said it was not his job to know details of the highly technical cleanup plan. His point was valid, but he would have done better to emit a nine-second sound bite about what he did know. On the defensive, Rawl attacked bureaucrats in the Coast Guard and the government, accusing them of delaying the cleanup. The tactic backfired: The bureaucrats, enraged that Exxon was shifting the blame, have taken every opportunity to castigate the company. An Exxon PR staffer summed it up, ''In the first few days we dealt with the problem, not the perception.'' The bottom line, which is not exactly news, is that dealing with the press means dealing with perception. That may be uncomfortable for executives used to communicating hard facts. Certainly trying to convey perceptions through the filters of reporters, editors, and producers is risky. But it is less risky, on balance, than not trying. Just as signed contracts cannot always prevent disputes, so relationships with journalists sometimes lead to unsatisfactory outcomes. That's life. When the story turns out bad, firing the PR person is no solution. Neither is holding a grudge or pulling your ads from the offending publication. This is a game for grownups. If a reporter wrongs you, complain forcefully to the perpetrator and, if necessary, a higher-up. But take a peek out the window first, and make sure the oil slick spreading out there isn't yours.

BOX: FOURTEEN WAYS TO DEAL WITH THE PRESS

-- Make the CEO responsible for press relations. That means he must often speak for the corporation, routinely and in times of crisis, and delegate enough authority to make the PR spokesman a credible source. -- Face the facts. If you screw up, admit it candidly. Avoid hedging or excuses. Apologize, promise not to do it again, and explain how you're going to make things right. -- Consider the public interest in every operating decision. Your reputation depends far more on what you do than on what you say. Act accordingly. Try giving your senior PR expert a seat at the table when decisions are made. -- Be a source before you are a subject. The time to make friends with reporters is long before trouble hits. Get to know the people who cover your company, educate them, help them with their stories, and give them reason to respect you. Determine which journalists deserve your respect and trust. -- If you want your views represented, you have to talk. Reporters are paid to get stories, whether you help or not. When you clam up, they must depend on other sources -- often people like that marketing VP you fired last month. -- Respond fast. You can't influence a story once its deadline has passed. Nor ! will you appear credible if you seem to be stalling. In a crisis, figure you have a day to get your story out. -- Cage your lawyers. They will always tell you to keep your mouth shut. But in many crisis situations your potential legal liability may be trivial compared with the risk of alienating your customers, employees, or regulators. -- Tell the truth -- or nothing. Nobody likes a liar. -- Don't expect to bat 1.000. PR is a game of averages, so be content if you win most of the time. Even the most flattering story will likely have a zinger or two, and even the best companies get creamed now and then. -- Don't take it personally. The reporter is neither your enemy nor your friend: He or she is an intermediary between you and the people you need to reach. And forget about your ego -- nobody cares about it but you. -- Control what you can. Release the bad news yourself -- before some reporter digs it up. Use your selective availability to reporters as a tool. Set ground rules every time you talk. If the public isn't buying your message, change it. -- Know whom you're dealing with. The press is not monolithic. TV is different from print, magazines are different from newspapers, and the Austin American- Statesman is different from the Wall Street Journal. Within a news organization will be a normal mix of individuals, some honorable and competent, some not. Do your homework on journalists before you talk to them, reviewing their past work and talking to other executives they have covered. -- Avoid TV unless you feel free to speak candidly. Even then, learn to present your views in the ten-second sound bites that are the building blocks of TV stories. Use simple declarative sentences and ignore subtleties. Whenever possible favor live TV shows over those that can edit your remarks. -- Be human. Reporters -- and the public -- usually will be more sympathetic to a person than to a corporation. If you can do it without lying or making an ass of yourself, reveal yourself as a person with feelings: Your mistakes will as likely be forgiven as criticized. Insist on being judged on a human scale, with normal human fallibility taken into account. Remember that people love to root for underdogs.

BOX: TALKING TO REPORTERS: A GLOSSARY

-- Negotiate ground rules with reporters before you volunteer information. Knowing these definitions will help. -- Off the record material may not be published or broadcast, period. Don't go off the record casually or with anyone you don't have reason to trust. -- Not for attribution information may be published, but without revealing the identity of the source. Always specify whether that applies to your company as well as to you. Nail down the attribution the reporter will use -- ''a member of Acme Corp.'s two-man executive committee'' vs. ''an industry expert''-- before you open your mouth.

-- Background usually means not for attribution, but don't take that for granted. Discuss it with the reporter. -- Deep background usually means off the record. Again, make sure. -- Just between us and other ambiguous phrases mean little to reporters. Don't use them. -- Check it with me before you use it means just what it says. Specify whether the restriction applies to quotations as well as facts. When the reporter checks back, you have the right to correct errors and misunderstandings, but not to withdraw statements you now regret. -- Read it to me before you use it gives you no right even to correct errors. All you get is advance warning of what the reporter will use. -- No means that you have decided not to answer a reporter's question. Used judiciously, this is a lifesaver.