Two ways to hire (and a wrong way)
The wrong way first: interview someone for an hour. If you like them, have them interview three or four other people in your organization for an hour each.
You've invested five hours of your team's time, but really you only were looking for approval, because you'd already decided you liked the person enough to work with them for years.
All the evidence we've seen shows that this is a lousy predictor of future performance. And, let's tell the truth... if the first three people love the guy, are you really going to let the fourth, junior person veto him? Or is it just an annoying courtesy?
There are two approaches you can use as an alternative.
First, you can work with someone for months before you offer them a job. Your pool is smaller (freelancers, joint venture partners, interns) but the exposure to how they work is spectacularly different. You don't get the thrill of finding a pearl in the oyster, the "wow, I found the most incredible hire!" bragging rights. Instead, you get exactly what you expect. Organizing for this sort of hiring isn't particularly difficult, particularly in a down economy. Not surprisingly, I've had 100% success doing this.
Second, and with some controversy, you can admit that an hour interview is actually a five minute sniff test followed by 55 minutes of wasted time, multiplied by four colleagues. Tell the truth and switch to five minute interviews.
If you do five minute initial interviews, you can interview 12 times as many people for each job opening. This initial filtering takes precisely as much time as your wasted one-hour approach, but dramatically increases the chance you'll find someone you actually have good pheromone and body language connection with. After the screening, I can only encourage you to do the projects, reference checks and other serious diligence you're probably too exhausted to do after spending all those hours with one person...
This process takes a lot of work, but it definitely works. If you can interview 60 people in a day or two and then have the three best fits do projects, presentations and freelance work for you, you're way ahead of a company that interviewed only three people and fell in love with one.