Driving past Canterbury Park race track in Shakopee recently, I was struck by the thought of all the owners who take their horses there, believing that they have a winner. Yet every race has only one winner.

Owners improve their odds with selective breeding, superior training, and qualified jockeys, but nobody knows what’s going to happen until the starting gate opens and the hooves thunder around the track.

Consider the story of Seabiscuit, a small, crooked-legged racehorse that beat Triple Crown winner War Admiral in 1938. It was a match race that is still considered the greatest horse race ever run. Seabiscuit’s success wasn’t just due to luck, though. It was a product of his hidden talent. His owner, Charles Howard, trainer, Tom Smith, and jockey, Red Pollard, recognized Seabiscuit’s talent when nobody else did. They saw his inner drive to win and respected his intelligence, then provided the best training to develop him into one of the finest horses ever to race.

Now, you’re probably wondering how the heck I’m going to make a connection between horse racing and hiring. Well, don’t get your undies in a bundle, and I’ll tell you. I have observed over the years that most managers go through a hiring process that is not unlike the one owners use to pick their horses – selective screening, multiple layers of interviews, personality testing, reference checking. But managers still fight significant odds when the starting gate opens. It seems that few can effectively predict how well a new hire will perform until the pressure is on. And by then, if it isn’t a good fit, it’s too late – they’ve already lost the race.

A good book that crossed my desk a few months ago told how to improve the odds. In Topgrading: How Leading Companies Win by Hiring, Coaching and Keeping the Best People, by Bradford D. Smart says that the cost of mis-hiring can be as high as 24 times the salary of the position. He didn’t just pull this number out of his nose; rather, he tracked thousands of new hires over a 10-year period. If that cost statistic isn’t enough to put your hair on end, then consider that according to Smart’s research, mis-hirings occur 50 percent of the time. If I were a betting man, I’d say those were lousy odds. Yet most companies accept them every day and gamble with hiring.

High-performing companies recognize the significant burden of mis-hiring and do their best to improve their chances of hiring a winner. Time and time again, I’ve observed that successful companies don’t necessarily know how to put together the best strategies or build the best product. What sets them apart is that they attract and retain the best people.

In his book, Smart calls the best people “A players”, those who are the most talented and highest performing. He says that, “the A players contribute more, innovate more, work smarter, earn more trust, display more resourcefulness, take more initiative, develop better business strategies, articulate their vision more passionately, implement change more effectively, deliver higher quality work, demonstrate greater teamwork, and find ways to get the job done in less time with less cost.”

He recommends a hiring and a performance measuring process that he has termed “topgrading”, which means filling every position with A players at the appropriate compensation level and evaluating on an ongoing basis whether there are A players in every position. It doesn’t matter whether you are hiring a janitor, a manager, or a member of the board of directors, you set your sights on hiring the best person available for the job.

Smart sorts employees into three grades: A players are among the top 10 percent of those available for the position, B players are in the 65 percent to 90 percent, and C players fall into the bottom 64 percent. His idea is to rank all employees into A, B, and C categories, then fire the Cs and either coach the Bs into higher performance or fire them, and fill the available positions with A players.

As tough as it is to do, in the long run it’s better to part ways with a poor-performing employee who drags everyone else down with mistakes, poor productivity, and bad attitude. In other words, the old cliché that people are known by the company they keep can be turned around: Companies are known by the people they keep.

Now, I can already hear the ruckus being raised by all you chief financial officers out there, who are putting up roadblocks because you think this will be too expensive. Well, listen up, my little CFO buddies: It doesn’t necessarily cost more to hire an A player, but if it does, hiring someone to get more done in less time with fewer resources still provides a better return on investment. Remember, A players provide better results. And if you could measure the resources that are wasted and the customers who are turned off by poor-performing C employees, it would more than justify paying a higher price for the best talent available.

Likewise, to small-company managers who believe they can’t afford the best: Consider the greater cost of not having the most talented people and cough up the dough. And get creative with what you offer: money isn’t the only thing that motivates people.

Smart offers a detailed process for choosing those with the most vision, intelligence, leadership, and drive which he calls the Chronological In-Depth Structured (CIDS) interview. If you’re interested in the interviewing details and the ongoing evaluation process, pop for the book. He includes examples from many high-performing companies including General Electric, Goldman Sachs, and McKinsey & Company, which all use variations of his process.

Whether you use Smart’s ideas or have your own process, the important thing is to hire and retain talented, self-motivated people. I saw the movie Miracle the other night, about the late Herb Brooks, the Minnesota-grown coach who led the U.S. hockey team to an upset victory over the Soviets in the 1980 Winter Olympics. It’s been called one of the greatest moments in sports history, yet Brooks said that if his team had to play the Soviets 10 times, the U.S. would lose nine out of 10 times. The Soviets were far more talented than the U.S. team, and in the prior Olympics had beaten the National Hockey League All-Stars. Brooks could push B and C players to perform beyond their abilities.

In business, though, you can’t just win once. You need sustainable, consistent, high performance in order to win in the marketplace, and that requires the best available talent.