One of the things that makes my current my writing group work is that we are not afraid to be critical. Another equally useful thing is that we accept each others’ critique pretty well. This combination didn’t just happen in a vacuum, of course. It’s based on a couple of things:
1) All of us are friends outside of the writing group. This helps us have a pretty high tolerance for each others’ critique. We can assume that we have each others’ best interests at heart. So, even if I’m telling someone that their story is confusing, oppressive or boring, they hopefully still understand that I want them to be successful almost as much as I want myself to be successful. 
2) We aren’t shy about telling each other what we like about each other’s work. Even if we don’t always start our feedback with: “I really loved this story.” At some point, we usually have positive things to say, shining a light on what we liked, what amused us, what kept us interested, what made us want to keep reading, etc…
3) Our criticism is usually constructive. We try not to say things like: “That sucked” or “I hated that” or “That was boring/confusing/slow.” We try not to say these things, that is, without also saying something to help solve the issue. For example, last week some of the feedback I got on “ROPE” was that the voice/prose felt “oppressive” and there wasn’t enough character-development for one reader to care about what happened in the plot. This was followed by ideas around character development (which I admit I was not thorough with) and a much longer conversation around what kind of voice I want to develop as a writer. This second part was huge for me. In the end, I felt much more secure in my vision for my narrative voice, even as I realized how far I am from achieving that vision.
4) We all have a background in group process. Two of us are actual bona fides licensed clinical psychotherapists. So, yeah, we should know to participate in a group honestly and respectfully. Also, three of us participate in an egalitarian spiritual community where honest feedback is a integral part of our process. These practices go a long way in keeping us aware of budding conflict and underground/unspoken issues. And, I believe, they foster in us a kind of detachment, where we are able to not take things too personally or at least to slow down the inevitable taking-things-too-personally.
 I do want myself to be successful much more than I hope for anyone else to be successful. But, I would be genuinely happy for my writing buddies’ successes. And I would still be happy for them if they were successful while I still toiled in obscurity. I even think I’d be happy for them if they were successful at my expense. BUT I’d still he happi-er if I was the one succeeding. Just being honest.