When I was at NeXT Software in the mid-1990s, Steve Jobs used to say, to the point we all got sick of hearing it: "A players attract A players. B players attract C players." This was in the context of making each new hire count, from the most junior to the most senior, regardless of role.
A couple of years ago, I ran into one of our former IT desktop support people who had worked with me at NeXT. After Apple, this guy had subsequently became the founder and CMO of a successful startup, cashed out, and is now wealthy and working as a high-powered marketing consultant in Silicon Valley. This is the guy who, fresh out of school, used to fix the network connections on our desktops.
Every new hire in every department at NeXT was required to be an "A" player. Given the impact the NeXT technology and team subsequently had on Apple, I think we've all seen what happens when that's true.
An "A" player is one who excels at his or her current job and is always hungry to learn and do more. They are highly intelligent self-starters, never make excuses, and always find a way to get the job done. They never quit. When they make mistakes, they might kick themselves briefly, but mostly they learn and don't make the same mistake ever again. As I like to tell my teams: "It's OK to make mistakes; if you don't make mistakes, you aren't learning. Just don't make the same mistake repeatedly. I want you to go out and make some new mistakes."
You can be an "A" player right out of school, or as a veteran engineer or VP. It's not a question of years of experience or current knowledge — it's a question of attitude and focus.
As a general rule, I've found that you are better off hiring "A" players who can learn, than "B" or "C" people who already know. Sometimes you have no choice but to hire for knowledge. However in those cases, when building a team, you are better off using these people as "consultants" or educators rather than as team members. Your go-forward team should consist of "A" players.
I'm not talking about firing people for failure. In my experience, 9 times out of 10, this is a mistake. Being an "A" player is not about constant success — it's about how you respond to setbacks and even failure. An "A" player learns, adjusts, and tries again until they do succeed. That being said, you can be an "A" player in the wrong role. That doesn't make you any less of an "A" player. It means that you or your manager (who you've hopefully picked to be an "A" player yourself) has some work to do to get you in the right place.
A surprising fact: "A" players don't necessarily cost any more to hire than "B" players. As Steve Jobs implied, an "A" player will be attracted to working with other "A" players. Learning and growing by doing interesting work and being on the best possible team is their principle motivation. They certainly don't want to be unfairly paid, but once the money is taken care of, the quality of the work and their ability to learn from the other "A" players around them is what matters.
What it does cost you to assemble an "A" team is time, energy, and the willingness (you could call it ruthlessness) to do so. Being so selective is hard work. However, as the world has seen from the NeXT people and technology that contributed to the success of Apple — including Steve Jobs himself — the payoff can be almost beyond belief.