We studied employees who were promoted into a leadership role from within their workgroup and explored how they dealt, psychologically, with being both a leader and a friend of their subordinates. In an inductive, qualitative study of 33 individuals from across three organizations (two mining companies and one childcare organization) we found that these people experienced psychological conflict that resulted in them feeling vulnerable to being exploited or being afraid to use their power over subordinate-friends. We identified five strategies that were used, namely abdicating responsibility, ending the friendship, establishing the divide, overlapping the roles, and using friendship to lead. We developed a model whereby the type of psychological conflict and the person's leader identity (either “the boss”, just a role, or a weak or non-existent leader identity) leads to the choice of resolution strategy. This exploration into understanding pre-existing friendships demonstrates the ongoing need to consider those in a leadership role as “people” and not just “leaders”.