It seems like the reporter from The Atlantic came up with a hypothesis and set out to write an article to "prove" it. I don't see any reporting, as in speaking to current or former Zappos employees, learning what Holocracy is, or investigating its long-term effects. In other words, this is just an opinion piece.

Extrapolating a general condemnation of an entire business system like Holocracy from a single data point is bad journalism, to say the least. Casually lumping all "flat" structures together and cherry-picking research to support a hypothesis (hierarchies work!) is lazy, and does the reader a disservice.

I'd be very interested in some actual reporting to see how things are going at Zappos. It's possible that Holocracy is not turning out well. It's also possible that the turnover was exactly what they needed, and a positive new model of work is emerging. Unfortunately, this article didn't do any reporting, so it's unable to serve as anything more than a traffic-generating question mark.