there's definitely a migration period where the people who originally held power continue to hold it. One of their tasks is delineate those powers and delegate as appropriate. Certainly a founder or formerly c-level executive will continue to hold lots of power. Holacracy asks/empowers participants to admit that there are informal groups, cliques, cabals, who hold lots of cachet and at least document their existence.

I worked in a partially "holacratic" organization for about six months, and had a lot of good experiences, but remain something of a skeptic. Certainly it's problematic that the companies most likely to adopt it are already in the bad state that necessitates a major shake-up. I think a lot of the criticism of Zappos by outsiders and message-board nerds is misguided or ignorant, but they seem to be in a bad spot no matter what.