Zappos is experiencing problems implementing holacracy in their organization due to the unforseen rise of favoritism and management issues. This has lead to a significant percentage of employees actually leaving the company for more traditionally structured ones. Also, Zappos has fallen off of Forbe's list of best companies to work for, after consistently being on the list for years.
The major step Zappos can take to implement the new structure more effectively is to listen to the concerns of it's current and former employees and take quick action, before it's too late.
