Jen, that is a tough situation.. Especially since she was a friend..it become shard to maintain lines between the two when you have a good team... I always recommend trying to keep a professional separation between the two. Having said that, sometimes it is hard... but I think your point about leading by example, being honest and not reacting at every discussion is a great approach.

Thanks for the article, it brings a good perspective. I had an employee once that I got along with very well, even considered her a friend. However I did not trust anything she said to me. Not that I thought she was lying, but I learned the hard way that she based decisions on emotion, rarely well rounded facts. It was a balance of trusting her ethics & her intentions, but not her decision making ability. For me, leading by example and being honest with her each time she came to me with a crisis was the only way I could see to manage her. I would listen, but never react. I would fact check before commenting with any opnionr. It was tiring. Although I trusted her as a individual...I had trouble trusting her judgement as an employee.