How to use the ladder of inference for 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 mental model that explains how we move from observing facts to taking action. Developed by business theorist Chris Argyris, it shows how each step in our thinking, represented by a rung on the ladder, builds on the previous one, often influenced by cognitive bias and personal assumptions.

The ladder isn't a process to follow; it's a reflection tool. Understanding it helps you:

• Recognise your assumptions: See how past experiences shape your conclusions

• Avoid cognitive bias: Catch thinking errors before they affect your decisions

• Make evidence-based choices: Base actions on facts rather than beliefs

What is cognitive bias?

Cognitive bias is a type of thinking error that affects our choices. It describes our tendency to misinterpret information and make objectively irrational decisions, like continuing to watch a bad movie just because we've paid for it. Cognitive bias usually happens when we ignore relevant information, emphasize irrelevant information, or frame a situation in a certain way.

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, shaping how we see and understand the world, and 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."

Climbing the ladder: A breakdown of each rung

There are seven rungs on the ladder of inference. Here's a quick overview before we dive into each step:

Now let's look at each step in detail:

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 we don't consider all available data when making a decision. 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 published 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 making assumptions, often without considering whether they're valid. We apply the context from step three to our particular situation. We only consider the assumptions we've made and disregard any alternative explanations.

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 a minimum of 2 weeks, 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. This phenomenon is called the "reflexive loop," a vicious circle in which our beliefs influence how we make decisions, which in turn solidify those beliefs.

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

Reality check: This belief doesn't account for 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 on our own assumptions rather than 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 account for all relevant information in your timeline estimate, your project will fall behind schedule. In addition, last-minute requests may affect your future relationship with the design team.

The impact of jumping up the ladder

When we climb the ladder of inference too quickly, we risk making decisions based on incomplete or biased information. This can lead to misguided actions, strained team relationships, and missed opportunities.

In the workplace, jumping up the ladder might look like:

• Underestimating project timelines: Assuming past performance will repeat without checking current capacity

• Misjudging a colleague's intentions: Interpreting silence as disagreement without asking questions

• Pursuing the wrong strategy: Acting on assumptions about customer needs instead of actual data

The reflexive loop compounds this problem over time. Each decision based on faulty assumptions makes those assumptions more ingrained in your thinking, making it harder to recognise when you've jumped to conclusions.

The ladder of inference vs. unconscious bias

The ladder of inference is often confused with unconscious bias, but they're different concepts. Here's how they compare:

The ladder of inference shows how our decision-making process can reinforce biases over time. Understanding both concepts helps you catch flawed thinking before it affects your choices.

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How to use the ladder of inference

The ladder of inference isn't an ideal series of steps you should follow to make good decisions. But it's still a useful tool to check your thinking process and actively reject unconscious bias.

As you go through this process, remember that it's totally normal to make assumptions about a situation. If you discover you've jumped to a conclusion, that doesn't mean you're a bad person; it just means you're human.

1. Identify where you are on the ladder

You can use the ladder of inference at any stage of the decision-making process, not just after you've made a choice. Start by identifying where you are on the ladder using 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 those experiences?

5. Have you drawn a conclusion? What is it?

6. Which beliefs does this situation reinforce?

7. What action did you take (or plan to take)?

When you reach a question you haven't considered yet, that's likely your current rung on the ladder.

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.

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."

1. Why did I choose this action? Are there alternatives?

2. What belief led to that action? Is it backed by evidence?

3. Why did I draw that conclusion? Is it supported by facts?

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

5. What past experiences am I associating with this situation? Are they relevant?

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

7. What are the real facts? Is anything missing?

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.

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. The ladder of inference can help in a variety of situations:

• Individual reflection: Investigate your own thought process

• Team alignment: Help teams reach consensus on complex decisions

• Perspective-taking: Explore different viewpoints before acting

• Avoiding assumptions: Catch yourself before 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. 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

Using the ladder of inference in teams

The ladder of inference isn't just for individual reflection. It can be a powerful tool for bringing clarity to group decision-making.

To use the ladder of inference in a team setting, encourage each person to share the data they're focusing on and the assumptions they've made. This opens a dialogue in which team members can respectfully challenge each other's reasoning and explore alternative interpretations together.

You might say something like: "I noticed we're reaching different conclusions here. Can we walk through the ladder together to see where our thinking diverges?" This approach helps teams align on the facts before moving to action, improving overall team effectiveness.

Make better decisions with these tools

The ladder of inference is a powerful tool for understanding your decision-making process, reevaluating your thinking, and making evidence-based choices for yourself and your team.

Remember: The ladder of inference 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. Ready to improve how your team makes decisions? Get started with Asana today.

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

Frequently asked questions about the ladder of inference