There's been a lot of talk about values in the wake of the corporate scandals that dominated the first three quarters of the year, much of it highly skeptical. Enron, for example, was a member of Business for Social Responsibility, and posted its values - respect, integrity, communication, and excellence - prominently on its website. You have to be irony-deficient not to get a laugh out of that.The November issue of Harvard Business Review adds another dimension to the values issues by featuring research by HBS associate professor Amy Edmondson showing how a values-driven culture can backfire. She tells the story of a boutique ad agency built on its founder's belief in the importance of values such as diversity, egalitarianism, and work-life balance. That approach was successful in attracting a highly motivated workforce, and employees cited the company's commitment to values as one of the reasons they loved working there. But when employees were asked to describe the worst things about the company, values came to the fore again, in unexpected ways. When the founder chose to grow the company in order to provide more opportunities for staff and deliver greater rewards to profit-sharing participants, employees thought the plan was motivated by greed. And when the founder gave long-standing employees shares in the company, others saw it as a violation of the company's commitment to equality. But those concerns were never voiced, leaving the agency founder unaware of any discontent. It's easy to conclude from recent coverage that values are either meaningless, as in the case of Enron, or potentially dangerous, as in the case of the ad agency studied by Edmondson. But values are critical. They are the key to sound decision making at every level of the company, and to protecting the company's reputation. (Readers of this column may remember the formalistic response of Target, after a customer complained it was selling Nazi-related clothing items. If the customer-service rep who responded truly understood Target's values and felt empowered to act on them, it's hard to believe he or she would have sent back such an inadequate response.) Like other management tools, however, values are effective only if they are applied effectively, and only if they are measured. Companies that take their values seriously need to constantly gather feedback - particularly from employees, but also from customers, investors, and communities - to learn whether stakeholders believe they are living up to those values. Values are not just words on a piece of paper; they're the starting point for a continuous, never-ending dialogue.