It needs to be so out of focus, in fact, that it's completely undefined. This is best done with a telephoto lens and a large lens aperture. Unless you are going for a very different look (such as using a wide angle for an exaggerated perspective), I would suggest using a 200mm telephoto or longer for pictures of people outside.
In addition, shoot them in the shade. Don't have any direct sunlight on them at all, and the background needs to be shaded as well. This means that their eyes will be open fully and you won't have any harsh contrast to deal with.
These two simple ideas will make a world of difference in your outdoor portraiture.
More on Jim Zuckerman...Be sure to check out Jim Z's Bio.
Also, Jim teaches many excellent online courses here at BetterPhoto, including:
About Author / Instructor / Photographer, Jim Zuckerman
In 1970, I decided to abort my intended career as a doctor in favor of photography and have never regretted it. Photography has enriched my life more than I can tell you. My career has taken me to over 60 countries, and I've seen and photographed wondrous things.
For 25 years, I shot a medium format camera, specifically the Mamiya RZ 67, for its superior quality. When I would lecture, I’d project the large, glass mounted transparencies, and it was really an incredible experience to see the brilliant color saturation and resolution of these slides. However, I went digital in 2004 because the technology finally equaled or surpassed medium format. I now shoot the Canon 1Ds Mark II digital camera with a variety of lenses.
I am the author of 12 books on photography. My work is sold in 30 countries around the world, and my images have appeared on scores of magazine and book covers, calendars, posters, national ads, trade ads, brochures, and corporate promotions.
For many years I've led photography tours to exotic places. These include Papua New Guinea, Thailand, Burma, Greece, The Czech Republic and Slovakia, Spain, Morocco, and Peru.