> One of my past managers said i shouldn't have to be "friends" with any of my reports and only look for their output qualities.

There are many reasons for this, but at least consider this: when team will grow, you will not be able to be friends with everyone, and those not included will feel that they are treated differently.

Then the trust will start to erode, because the only way to be included is to be "friends" with you - it will create all sorts of things in the working environment you don't want.

Working with friends is awesome, but only when they are on your level. Having friends as your reports is completely different beast.