a) With low appetite to fail or make a mistake, the workforce may become defensive
b) Loyal employees might slowly moving to neutral zone and then some may ultimately move to the dangerous don’t care zone if they are punished despite true intent and fantastic efforts
c) New employees would find it very difficult to survive initially because their initial mistakes or failures may amplified.
In an ecosystem where failures cause discomfort, likely major casualty is innovation. What business leaders may want to focus hard on is a risk appetite backed by strong risk management. If the talented team members and managers/leaders have thought through the risks and the plan includes contingency/mitigation/acceptance related actions which are well assigned and actioned, then we can avoid the following: