The ladder of inference: How to avoid assumptions and make better decisions

As a human being, you probably make assumptions. Our brains process truckloads of information on a daily basis, so we sometimes take shortcuts—and that’s totally normal. For example, we assume frost on our windshield means it’s cold outside, rush hour means lots of traffic, and the milk we just bought is safe to drink. 

While these assumptions are pretty harmless, taking mental shortcuts can get us into trouble when we’re faced with more important choices—like who to hire for a new role, which business investment to pursue, or how to budget resources for a project. 

But just because your brain takes shortcuts doesn’t mean you’re doomed to make bad decisions. When you understand how your brain processes information, you can double-check your thinking and base your decisions on solid data instead of assumptions. And that’s where the ladder of inference comes in.

What is the ladder of inference? 

The ladder of inference is a tool that explains how we make decisions. Each step in the decision-making process is represented by a rung on the ladder—so you start at the bottom, then climb each rung before making a decision and taking action.

The ladder of inference isn’t a series of steps you should follow to make good decisions. Instead, it outlines the way we naturally make judgements about situations and how we’re influenced by cognitive bias—thinking errors that make us misinterpret information. When you understand how the ladder of inference works, you become aware of how your assumptions lead to specific conclusions. That awareness can ultimately help you avoid cognitive bias, stop treating your beliefs as truth, and make better decisions for you and your team. 

Where does the ladder of inference come from? 

The idea of the ladder of inference has been around for over half a century. Business theorist Chris Argyris first proposed the concept in 1970 to explain how people make and sustain their assumptions about the world. He called these assumptions mental models. According to Argyris, mental models act like eyeglasses to influence how we see and understand the world—then, we decide how to act based on that understanding. Later, MIT professor Peter Senge popularized this idea in his 1994 book “The Fifth Discipline: The Art & Practice of the Learning Organization.” According to Senge, companies can improve how employees learn by helping them understand the ladder of inference and how assumptions influence their thinking. 

Climbing the ladder: A breakdown of each rung

There are seven rungs on the ladder of inference. Here’s a breakdown of each step in the decision-making process, from observation to action:   

1: Observe reality

At the bottom of the ladder, we observe the facts of a situation. We haven’t made any interpretation yet—rather, we’re just taking in the reality of what’s happening.

Example observation: Imagine you’re estimating the timeline for a new project. You’re working on a ten-article blog campaign, and each article will be 1,000 words long. One of your key stakeholders is the design team, who will help you publish each article.  

2. Select data

Next up, we selectively pay attention to specific facts based on our personal beliefs and prior experiences. This usually means that we don’t consider all available data when we make a decision. Instead, we zero in on certain details based on our own preferences or agenda. This is where bias starts to creep in—often to the point of undermining our eventual decision.

Example data selection: You’ll be writing ten articles, and each of them will be 1,000 words long. 

Reality check: In this example, you’re hyper-focused on what your own team can produce within a certain time period, and you overlook the fact that you’re working with the design team to publish each article. 

3. Add context to data

After we select data, we consider it in the context of our own past experiences and beliefs. Instead of analyzing data objectively on its own, we look at it subjectively through the lens of our experience. 

Example context: You worked on a similar project last year—but instead of ten 1,000-word blog posts, you wrote five. It took you a week to write and publish each article, so five weeks from start to finish. 

Reality check: You worked with the design team last year too, and they were able to publish articles quickly (within a day or so). However, you don’t know that they’ll have the same bandwidth this year. 

4. Make assumptions

At this point, we start to make assumptions—often without considering whether they’re valid or not. When we make an assumption, we start to apply the context from step three to our particular situation. We only consider the assumptions we’ve made and disregard any alternative explanations or viewpoints for our situation.

Example assumption: This project is almost exactly like the one you did last year, so it will take you a similar amount of time to write and publish each blog post. 

Reality check: The design team is handling a growing number of requests from other teams, so they won’t be able to prioritize publishing your blog articles like they did last year. 

5. Draw conclusions

Now take our assumptions a step further by drawing conclusions about what the situation means and how we should act. 

Example conclusion: It will take you ten weeks to write and publish ten 1,000-word blog posts. 

Reality check: The design team has low bandwidth this year and will need at least a full week to publish each blog post. That means the turnaround time for each article is two weeks minimum, putting you at 20 weeks for the whole campaign. 

6. Adopt beliefs based on conclusions

Next up, we transform those conclusions into personal beliefs that we carry with us into future situations. That means we continually reinforce our beliefs every time we draw conclusions, regardless of whether those conclusions are valid or not. This phenomenon is called the “reflexive loop”—a type of vicious circle in which our beliefs influence how we make decisions, then those decisions solidify our beliefs.  

Example belief: We can use this one-week per article time estimate for all future blog campaigns. 

Reality check: This belief doesn’t take into account the changing circumstances of your key stakeholders. If you continue to follow this belief, you’ll likely run into problems with timeline estimations for all future projects. 

7. Take action

Finally, we take actions that seem right because they’re based on what we believe. But in reality, we’re operating based on our own assumptions instead of considering all the facts. 

Example action: You finalize your project plan with a ten-week timeline for the entire campaign. 

Reality check: Since you didn’t take into account all relevant information for your timeline estimate, your project will fall behind schedule. In addition, last-minute requests may impact your future relationship with the design team.   

The ladder of inference vs. unconscious bias 

Often, the ladder of inference is related to unconscious biases—learned assumptions, beliefs, or attitudes we aren’t necessarily aware of. Also known as implicit bias, unconscious bias develops over time as we experience life and encounter different stereotypes. Unconscious bias isn’t a decision-making process like the ladder of inference. Rather, it’s a factor that influences our thinking on each rung of the decision-making ladder. 

On the other hand, the ladder of inference illustrates each step we take before making a decision and taking action. Different cognitive biases—including unconscious bias—contribute to that process. Furthermore, the ladder of inference illustrations how our decision-making process can actually reinforce our beliefs and biases, regardless of whether they’re valid or not. 

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How to use the ladder of inference

Like we mentioned earlier, the ladder of inference isn’t an ideal series of steps you should follow to make good decisions. But that said, it’s still a useful tool to check your thinking process and actively reject unconscious bias. In fact, you can use the ladder of inference to evaluate whether your choices are based on reality or assumptions. 

As you go through this process, remember that it’s totally normal to make assumptions about a situation. So if you discover you’ve jumped to a conclusion, that doesn’t mean you’re a bad person—it just means you’re human. Better yet, just by reading this article and evaluating your thinking process, you’re already on your way to making evidence-backed choices you can be proud of. 

1. Identify where you are on the ladder

You can use the ladder of inference during any stage of the decision-making process, not just when you’ve already made a choice. First, think about how far you’ve come in your thought process to identify where you are on the ladder. This takes some introspection—but if you’re stuck, try working your way up the ladder with these questions: 

1. What are the facts of your situation? 

2. What evidence are you focusing on? 

3. What past experiences or beliefs do you associate with this situation? 

4. What assumptions have you made based on your past experiences or beliefs? 

5. Have you drawn a conclusion about the situation? What is it? 

6. Which of your beliefs does this situation reinforce? Have you adopted a new belief based on what happened here? 

7. What action did you take? 

When you get to a question you haven’t thought of yet, that probably means it’s the next rung up on the ladder. For example, if you can easily answer questions one through four but you’re stumped by five, that means you’re probably on rung four—the ”make assumptions” stage.  

2. Work your way back down the ladder

Now that you know which rung you’re on, you can work your way back down the rungs of the ladder. Instead of asking yourself what you're thinking for each step, consider why you’re thinking it. This provides additional context to help you adjust your reasoning, make different conclusions, or consider additional data.

To guide yourself through this process, ask yourself the following questions—starting with the rung you identified in step one and working backwards to “observe reality.” 

7. Why did I choose this course of action? Are there other actions I could have taken? 

6. What belief led to that action? Was that belief backed by evidence? 

5. Why did I draw that conclusion? Is that conclusion backed by evidence? 

4. What am I assuming? Are my assumptions realistic?

3. What past experiences or beliefs and I associating with this situation, and why? Do those really have anything to do with what’s going on now? 

2. What data have I chosen to consider, and why? 

1. What are the real facts that I should be using? Is there anything missing that I haven’t considered? 

3. Work your way up the ladder again

Now that you’ve worked your way backwards down the ladder, you’re probably much more aware of your reasoning process and any assumptions you may have made. At this point, you can try climbing the ladder again with a fresh perspective. Be sure to go through each step slowly to make sure you aren’t letting new assumptions creep back into the picture.

As you progress through each rung, imagine you’re explaining your reasoning to a colleague or friend. That way, you’re mentally holding yourself accountable and making sure your argument is sound. Better yet, enlist a trusted coworker to help! 

When to use the ladder of inference

We’re constantly making decisions, both in business and in daily life. That means the ladder of inference can come in handy for a variety of situations—and not just for your own benefit. Aside from investigating your own thought process, the ladder can also help teams reach consensus, explore different perspectives, and avoid jumping to conclusions. 

For example, if members of your team disagree on how to organize a new project, you can use the ladder of inference to help your team members (and yourself) explore why they’ve come to a certain conclusion and what evidence they may not have considered. That way, your team can consider all the available evidence and make the most logical choice possible. 

You and your team can use the ladder of inference any time you’re making a decision or taking an important action. For example, you can use it when you’re: 

• Interviewing candidates for a job

• Deciding to invest time and resources in a new project

• Making recommendations to guide business strategy

• Deciding how to structure a new project

• Choosing project management software (or any new tool) for your team 

• Giving feedback or writing performance reviews

Make better decisions with these tools

The ladder of inference is a great way to understand your decision-making process, reevaluate your thinking, and make evidence-based choices for yourself and your team. 

Remember: The ladder of influence isn’t a series of steps you should follow to make better decisions. If you’re looking for a way to structure your decision-making process (as opposed to evaluating it), check out these tools: 

• Follow a seven-step decision-making process.

• Use data-driven decision-making to transform data into actionable insights. 

• Create a decision tree analysis to outline the potential outcomes, costs, and consequences of a complex decision. 

• Create a decision matrix to select the best option between different choices. 

When it comes to making great decisions, data is key. Make sure you have plenty of evidence to consider by choosing a robust reporting tool for your team. These tools can help you visualize data in an easy-to-read way, so you can utilize solid evidence without lots of technical know-how. 

Decision-making tools for agile businesses

In this ebook, learn how to equip employees to make better decisions—so your business can pivot, adapt, and tackle challenges more effectively than your competition.

Get the insights