Is it more important to be their leader or their friend?

As the leader, it is your responsibility to act on behaviors that are not in line with what you know are "normal" for your key people.

As business changes, so do the traits needed to survive, let alone excel. All these transitions put increased value on emotional intelligence. Competitive pressures put a new value on people who are self-motivated, show initiative, have the inner drive for outdoing themselves, and are optimistic enough to take reversals and setbacks in their stride.