Be too selective and you won't hire anyone good either. Great people are often eccentric, with weird personality kinks that can make them harder to work with. In my experience, smart, creative, brilliant people are pretty much always harder to work with, opinionated, pushy, and demanding. But I'll take that over "average but does what he's told" any day.
Something that your comment reminded me of is that your team is only as strong as the worst employee. If you are hiring bad apples as managers then it has the very likely potential of being bad apples all the way down.