Last week I was reflecting with my good friend, Prof. Craig Fleisher, on the evolution of competitive intelligence having been driven, in its first generation, by the need to create competitive advantage based on asymmetries of information.

Knowledge gaps that could produce an actionable advantage for a firm have traditionally been created when information was proprietary and available only to the one who proved to be the ultimate winner of whatever contest was being played.

This led to the ethics and espionage debate around the very nomenclature "competitive intelligence" that has been raging for far longer than I've been a part of the field. Consequentially, having taken its lead largely from the Cold War era U.S. national security intelligence apparatus, so-called "known knowns" and "known unknowns" have remained the traditional landscape of CI work.

This worked very well when competitors were used to going head-to-head with straightforwardly understood and motivated rivals whose primary goal was maximizing return on their shareholder equity. But it tends to fall apart when companies must decide on their own which direction to turn independent of the emergent direction of ones zero-sum peers.

Echoing the "failure of imagination" rhetoric of the 9/11 Commission, this issue has become a much hotter topic in recent years as the discussion of strategic decision-making has turned away from questions of competition (supposedly "exogenetic" indicators of industry change) and toward questions of innovation (with correspondingly "endogenetic" indicators of change). History has taught us, however, that pendulum often swings too high an arc; and, as we rush headlong into global economic uncertainty ahead, competitive issues (and competitive intelligence with it) is poised for quite a comeback.

The trouble with this is, this shift in perspective will undoubtedly overcorrect and we'll be back here again in a few years wondering why in the world companies are caught so flat-footed by competitive challenges (and CI with it). The problem lies in the "either/or" extremism of looking at the problem as a continuum of perspective when in fact, what is required is a Hagelian notion of "both/and" in dealing with top-down, as well as, bottom-up issues of relevance in anticipating changes in the market environment.

Recent events on Wall Street highlight some of these problems. Inherent the basis of decisions driven by comparative metrics of performance alone, companies are indeed caught unawares when they compare themselves to rivals and only see their relative performance, rather than absolute risk-reward ratio as a way to drive the comany forward.

There has been a rousing discussion on the CI network at Ning about whether the financial meltdown was a failure of intelligence, warning and decision support or whether it was a failure of decision makers to act rationally with the information they were given about their leverage environment, despite the impossibility of being "right" in their intelligence estimates.

I believe the generation of CI dawning now is being driven by these asymmetries of interpretation; that is, in an open source world where knowledge gaps are almost impossible to achieve, looking at the same information and seeing things differently from the rest of one’s industry is the only reliable way to win in the open source era awash in information.

What do you think?