Nietschze exaggerated when he said [Stronger]:
What does not destroy me, makes me stronger.
Your greatest responsibility is to your team. You should know each of them well. You should stretch your team, but not overburden them. You should usually talk to them about the way they are being stretched. If they buy in to it, they will be well motivated. On each project, or every other project, try to stretch them in both a way that they suggest and a way that you think will be good for them. Stretch them not by giving them more work, but by giving them a new skill or better yet a new role to play on the team.
You should allow people (including yourself) to fail occasionally and should plan for some failure in your schedule. If there is never any failure, there can be no sense of adventure. If there are not occasional failures, you are not trying hard enough. When someone fails, you should be as gentle as you can with them while not treating them as though they had succeeded.
Try to get each team member to buy in and be well motivated. Ask each of them explicitly what they need to be well-motivated if they are not. You may have to leave them dissatisfied, but you should know what everybody desires.
You can't give up on someone who is intentionally not carrying their share of the load because of low morale or dissatisfaction and just let them be slack. You must try to get them well-motivated and productive. As long as you have the patience, keep this up. When your patience is exhausted, fire them. You cannot allow someone who is intentionally working below their level to remain on the team, since it is not fair to the team.
Make it clear to the strong members of your team that you think they are strong by saying so in public. Praise should be public and criticism private.
The strong members of the team will naturally have more difficult tasks than the weak members of the team. This is perfectly natural and nobody will be bothered by it as long as everyone works hard.
It is an odd fact that is not reflected in salaries that a good programmer is more productive than 10 bad programmers. This creates a strange situation. It will often be true that you could move faster if your weak programmers would just get out of the way. If you did this you would in fact make more progress in the short term. However, your tribe would lose some important benefits, namely the training of the weaker members, the spreading of tribal knowledge, and the ability to recover from the loss of the strong members. The strong must be gentle in this regard and consider the issue from all angles.
You can often give the stronger team members challenging, but carefully delineated, tasks.