Friendships are built on mutual interests and mutual standing
You are not on equal footing with your direct reports, because you have the authority to direct their work, and they have none to direct yours.
In other words, there’s a power differential between you and your subordinates that hinders the creation of a sound foundation for true friendship. Also, your agenda and that of your direct reports aren’t necessarily in sync. And while there’s nothing particularly surprising or wrong about that, these differences do present opportunity for conflict that, when combined with the power differential, make the possibility of a mutually beneficial friendship unlikely.
A good friend is a confidant and unwavering advocate …
…but not so much a boss. In fact, the hallmark of an immature boss is one who confides in his or her subordinates inappropriately—whether it’s about the boss’ private life (I once had a boss complain out loud about how long it’d been since she’d had … ahem ... sexual relations—I don’t care lady, move on) or matters concerning other employees (another manager once casually let slip to me how a peer of mine had just received a big raise—nope, not interested in that either).
And then there’s the question of advocacy. Managers, who represent the interests of the company, after all, can’t also promise to always act in the best interests of their employees. So while it’s perfectly acceptable and even good for a manager to consider his employee needs before making a decision, at some point that manager will be tasked with recommending something that benefits the organization but not so much the employee. That’s just the way it goes.
When you’re a friend to your direct reports, it’s hard to be impartial and even harder to give the appearance of impartiality
Or, to put it another way, being too friendly with your staff makes it too easy to play favorites.
While it’s only natural for a boss to “like” some employees better than he or she likes some others, when you cross that boundary from friendly to friend, you’ve created fertile ground from which some ugly office weeds are bound to sprout. Truth is, it takes an extraordinarily mature individual to manage fairly when personal affections and interests are part of the equation, and it takes an extraordinarily mature employee to not take advantage of being the boss’ friend.
There’s a reason people say it's lonely at the top—it kinda is. And it’s kinda necessary, because when you get too familiar with your employees, stuff gets unnecessarily complicated, and low morale and low productivity are often the result.