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The temper tantrum: The key to smart management?

November 22, 2013, 2:18 PM UTC
Amazon’s Jeff Bezos

FORTUNE — As unhappy as McKenzie Bezos appeared to be with author Brad Stone’s unflattering portrait of her husband in the new book The Everything Store — immediately after its publication, she wrote a stinging review (on, of course) calling the book “lopsided and misleading” for focusing too much on “moments of tension” between staff members — she might not want to push back too hard. By highlighting the Amazon (AMZN) CEO’s propensity to berate his staff, Stone may actually be doing him and his company a favor.

The temper tantrum has not only become a fixture in corporate America, but it has been central to the management style of many of technology’s most successful CEOs — namely Steve Jobs, Bill Gates and Larry Ellison — and management experts say when handled appropriately, this style can even be beneficial to employees and the company as a whole.

As Stone reveals, Amazon employees have coined a term to capture the boss’ outbursts — “nutters.” Among Bezos’s favorites are: “Why are you ruining my life?” “If I hear that idea again, I’m doing to have to kill myself,” and “We are going to have to supply some human intelligence to this problem.” But while such verbal volleys do have their downside — namely alienated employees who may jump ship — they also can help spark spectacular achievements

This has not always been the case. For most of the second half of the 20th century, a kinder, gentler ethos reigned in America’s boardrooms. For example, in the 1980s, both Ford (F) and AT&T (T) hired the late W. Edwards Deming, the father of the quality management movement. His credo was that to increase efficiency, companies needed to “drive out fear” in workers. In an era when big companies could count on a given market share year after year, so-called caretaker CEOs, who created congenial workplaces, largely ruled.

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With technological change now constantly upending business models, however, visionary leaders are calling the shots instead. These CEOs are remarkably adept at devising ways to change the world, but along with this creativity often comes a host of personality tics. “Many of today’s most successful business leaders have a full-blown personality disorder, particularly those in high-tech firms,” says Michael Maccoby, president of Washington, D.C.-based consulting firm the Maccoby Group and author of Narcissistic Leaders. Research conducted by students at Stanford University’s business school using a questionnaire developed by Maccoby suggests that as many as nine out of 10 tech CEOs suffer from narcissistic personality disorder, whose defining symptoms are an inflated sense of self, a lack of empathy, and occasional “rage attacks.” These leaders, Macoby says, simply don’t know how to cope with frustration without losing their cool. But while narcissists often have problems in intimate relationships, they are well suited to running companies.

The volatile leader, of course, is not an entirely new breed. Bezos and his fellow tech titans are all throwbacks to the robber barons of the late 19th century — the men who first brought America into the industrial age. One key and often overlooked member of that generation was Henry J. Heinz.

Born in 1844, Heinz was the founder of the eponymous company now synonymous with ketchup, America’s slow-moving national sauce (recently purchased by Warren Buffett for $28 billion). But when it was founded in 1876, the H.J. Heinz Company constituted the latest in high-tech. And like Bezos and Jobs, Heinz — often called “the pickle king” — was as prickly and creative as they come.

Heinz worshipped the consumer for whom he created a whole new class of goods, mass-produced food products. Though his post-secondary education consisted of just a few accounting courses, the ingenious workaholic understood that the best way to get a leg up on his competitors was through technological innovation. His state-of-the-art-Pittsburgh plant, which featured an array of the newest gadgets and gizmos — think mechanized pickle counters — was a model for industrialists throughout the land. An advertising pioneer, who plowed a then-unheard-of 20% of sales into trumpeting his wares, he relied heavily on the new media of the day such as the billboard and the consumer magazine. Heinz was also one of the first American entrepreneurs to go international. In 1905, over the fierce objections of his own board, he set up his first manufacturing site outside of America, and within a few years, the Brits were gobbling up many of his products; baked beans soon became a national staple. Long before Starbucks (SBUX), McDonald’s (MCD), or even Coca-Cola (KO), Heinz achieved brand recognition all over the world. (For more about Heinz, see “Squeezing Heinz.”)

But just like his contemporary tech superstars, he could also terrorize his staff. As Heinz’s secretary observed, “He could and did, become stirred to great angers; and no man with one experience of these willingly incurred another.” Employees would be reluctant to challenge anything that Heinz said or did, even when he was way off base. Heinz once promised a homeless man that he could have a free meal in the company’s cafeteria. Rushing up to an employee, Oscar Smith, Heinz pointed to someone he thought was the panhandler and told Smith to let the guy in. Though the man Heinz indicated was actually the company’s sales manager, Smith felt compelled to follow his boss’ directive. “Don’t make any difference,” Smith told the startled Heinz executive who had already eaten. “Mr. Heinz told me to see that you got a good lunch and he’s watching.”

Half a century after his death, the company stopped trying to conceal this character flaw. As the author of the official corporate history published in 1994 noted, “Reading between the lines of his diary, one detects a formidable temper. It suggests he [Henry] may have been a bit of a bully.” Even some family members were scared of him. After Heinz’s wife of 25 years died, an unmarried younger sister, Mary, moved into his Pittsburgh mansion to serve as his housekeeper. According to a family friend, Mary complained that her explosive brother could “never understand the strain upon her” of living with him — and ended up having two nervous breakdowns.

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Exactly a century after Heinz opened up shop, Harvard dropout Bill Gates teamed up with Paul Allen, his high school buddy from Washington State, to start Microsoft (MSFT). As Allen observed in his memoir, Idea Man, working with Gates was often like “being in hell.” Gates’s put-down of choice was “That’s the stupidest f…ing thing I’ve ever heard.” A tough taskmaster, Gates couldn’t understand why all his employees weren’t as obsessed with work as he was. After one programmer put in four straight 20-hour days to finish a project, Gates was outraged that he then asked for a day off. Allen stepped down from his role as a co-principal after only six years. In resigning, Gates’s friend of 15 years explained that he could “no longer tolerate the brow-beating or ‘tirades,’” noting that “the verbal attacks you use have cost many hundreds of hours of lost productivity in my case.”

Workers with a different constitution from Allen sometimes thrive in the face of similar stresses. In his biography Steve Jobs, Walter Isaacson pointed out that the late Apple (AAPL) co-founder’s legendary rage attacks often had an upside. “People who were not crushed ended up being stronger,” he wrote. “They did better work, out of both fear and an eagerness to please.” Like Gates, Jobs didn’t necessarily mind employees who fought back, as long as their opinions were thoughtfully formulated. (Gates and his longtime deputy and future successor, Steve Ballmer, often went toe-to-toe in vicious debates; many insiders say this sparring was critical to the company’s success.)

And for his part, while Larry Ellison may well be prone to yelling longer than the other tech luminaries — according to co-workers, some of the Oracle’s (ORCL) CEO tirades have clocked in at nearly an hour — his invective is astonishingly similar in nature. Hyperbole is the trope of choice. When Ellison does not like how an Oracle executive is conducting a sales meeting, he tends to interject, “This is the worst display of sales organization in the U.S. — no, correct me, in the world.”

Management experts say that this harsh management style is actually not as terrible as it seems — if handled correctly. They warn that an excessive reliance on the temper-tantrum can create a toxic workplace. Employees also rarely respond positively when they sense that the boss’ outbursts are staged purely for effect. But that’s not something the super-successful contemporary techies have ever done. It’s always been clear that their intense reactions have been directly related to their emotional wiring. (According to Isaacson’s book, Steve Jobs would also fly off the handle when he did not like the way a clerk at Whole Foods (WFM) was preparing his smoothie.)

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Likewise, employees also need to see other sides of the CEO’s personality. If they begin to associate him or her solely with rages, they are likely to become either overly passive or rebellious. “Unless the tantrums are balanced with something else, the CEO loses all moral authority,” says Kerry Sulkowicz, head of the workplace consulting firm the Boswell Group. “Showing some vulnerability often helps.” This is an insight that Larry Ellison has taken to heart. In explaining his love of Japanese art, Ellison, who recently hired the former director of San Francisco’s Asian Art Museum to curate his massive personal collection, has described the Japanese as both “the most aggressive culture on Earth and the most polite. There is this incredible arrogance combined with unbelievable humility; a magnificent balance.” While Ellison might be alone in believing that he has created that same 50/50 balance in the corridors of Oracle, he is capable of humility. After Ray Lane helped turn around the company in the early 1990s, Ellison wrote a heartfelt letter, effusively praising his new hire for putting “the eagerness back into the eyes of a team turned miserable by cynicism and exhaustion.” But by all indications, Ellison doesn’t give voice to such tender sentiments all that often.

Joshua Kendall is the author of America’s Obsessives: The Compulsive Energy That Built a Nation.