"Good people"--it's a phrase we hear all the time, both in the office and out of it. What do we really mean when we say those words? When we say that someone is good? We recognize that quality when we're around it, and we can feel goodness when we experience it, but to really describe it, specially and fully, is challenging to say the least. Certainly we don't understand goodness to the degree it deserves.

"Good" and "goodness" are words so embedded in our everyday colloquies they've almost lost their meaning. They've become what my late neighbor, the illustrious intellect and MIT professor Marvin Minsky, termed "suitcase words": overused, overstretched phrases or expressions that have next to no practical meaning. Even formal definitions fall short. Merriam-Webster's Online Dictionary's definition of "good," for example, is "something virtuous, right, commendable." This is not incorrect, but we must build upon it and make it more concrete and understandable so that we may practice it in our daily lives.

If we take on the burden of creating a practical, actionable definition of goodness and putting that goodness into practice, we need to acknowledge that the topic has been a core question and source of inquiry for the world's greatest philosophers, psychologists, and spiritual leaders for millennia. As we can see from Aristotle's relentless quest to better understand the human condition and human spirit, from twentieth-century psychosocial explorations of different stages of desire and development by the likes of Abraham Maslow or Erik Erikson, and from many faiths' common principles of kindness, it is a near universal assumption that we should all live our lives striving to be good people.

But how can we think of goodness and good people as concepts that can be practically applied in the business world and understand their far-reaching benefits?

Defining what "good" means.

First, we need to confront the ambiguities in the way businesses use the term "good." There are two sides of the word. When hiring employees and managing teams, we often use "good" as a synonym for "competent." But "goodness" is far more than a person's competencies; goodness is about people's humanity, their values, the qualities inherent in their character, and other intangible traits. We therefore need to distinguish goodness as competency from goodness as values, and we need to understand that the latter ought to take greater priority.

Many people still believe that there's no place in the business world for "soft" concepts like good, goodness, and good people. Business is business after all, right? These people assume that leading a good business means focusing solely on getting results. But the truth is, now that prolonged competition, greater availability of information, and technological advancements have created a more level playing eld, people matter more than anything else. They add value at every point in the organization.

The best companies aren't just machines to maximize projects; they create widespread, positive change in their employees, their communities, and their industries. When good people imprint good values and qualities onto others, and they in turn do the same, they create enduring value and forward progress in businesses.

And even if you only care about maximizing profits and returns, goodness and good people benefit the bottom line as well.

By putting the meaning back into the "suitcase term" of "good people," we can elevate ourselves and the people around us--and change the face of business, perhaps even whole societies and the entire world. After working in and advising organizations both good and not so good, starting a few companies of my own, and investing in about fty others, I've come to believe that pursuing goodness in yourself while surrounding yourself with good people is the only leadership decision that really, truly matters.

When we ask ourselves why we admire leaders (or for that matter, people in general), the answer is predictable: they put people first and understand and practice the values that underpin goodness. These leaders are committed to improving everyone around them just as much as they are committed to improving themselves. They feel a duty to serve others by inspiring and shaping them to become the best, fullest version of themselves. The leaders and people who do this, as management guru Tom Peters says, "don't create followers." Instead, "they create more leaders."

I have come to believe this, and I see people and their values as the most critical competitive advantage that exists--period.