People Management Theories Explained: The Ladder of Inference

As business leaders and people managers, we often judge on our ability to make decisions. Our decisions can have significant consequences for the organisations we run and manage. It makes sense to assess our decision-making processes.

One tool that allows you to reflect on your previous decisions is the ladder of inference. The ladder of inference also aids future decision-making by identifying your common traits and actions in certain situations. If you’ve ever been told, “you’ve got the wrong end of the stick”, “you’re jumping to conclusions”, or “you’ve put 2+2 together and got 5”, then the ladder of inference might be a handy model to utilise.

Let’s take a look at how to use the ladder of inference!

Utilising The Ladder of Inference

Firstly, don't feel bad if any of the above applies to you!

The modern business world is jampacked with various pressures and demands, many of which can leave you feeling like a quick decision is required. After all, good leaders are assertive and can act with conviction, right?

It’s easy to see how business leaders can sometimes inadvertently stroll blindly into an “act now, worry later” mindset when making decisions, with little to no regard for the decision-making process.

The reflective model of the ladder of inference (who doesn’t love reflecting?!) will help add structure and clarity to the pitfalls of hasty, impulse-driven decisions.

To begin, think back to a scenario (the more recent, the better) where you made a significant decision. Then apply the below steps. You might be surprised at how analysing a past scenario through a different lens can aid future decision-making:

Step 1: Experience and Observe

You collect data on a given scenario by hearing words and seeing actions. Your brain captures this information like a camera filming the scenario. In your selected scenario, what experiences and observations did you capture?

Step 2: Select Data

Focus on the data you feel is relevant to this situation and discard the data you think is unimportant. Then, in your chosen scenario, reflect and try to identify which data you focused on and which you discarded.

Step 3: Add Meaning

Now you’ve identified the data you chose to focus on, it’s time to add meaning. What does the data mean to you in your chosen reflective scenario?

Step 4: Make an Assumption

At this stage, you assume that the data you have selected and the meaning you have assigned to that data accurately reflects the situation’s reality. Challenge your assumptions on your chosen scenario as part of the reflection process. For example, could there have been an alternative “reality” that was previously not considered?

Step 5: Draw a Conclusion

Based on your assumption, it’s time to draw a conclusion. Here’s where you need to consider what is best for you and those in your team. Reflecting on your scenario, try to make clear the conclusion you to. This may not initially be clear, so writing your thoughts down throughout the process is beneficial.

Step 6: Adopting Beliefs

You then adopt a belief to confirm your conclusion to be true and accurate. This means that everybody else has interpreted the scenario the same way as you. If this is the case, you have the confidence to act based on your conclusion.

Consider the conviction with which you made this particular decision. How vehement were you in your belief, and were you aware of the belief you adopted at the time? How do you feel about your current adopted belief now you are removed from the scenario?

Step 7: You Act

You act based on these beliefs as if they are proven facts. At this point, any new data is often adjusted, exaggerated or played down to fit your belief. When reflecting, consider how your actions influenced the belief(s) you held at the time.

Reflecting on The Ladder of Inference

Breaking down the decision-making process into these small steps can be a valuable way of challenging your behaviour to consider how you can alter future scenarios. Doing this allows you to reflect on what did or didn’t work and adapt to achieve better results in future decision-making.

Senior leaders, I encourage you to share this method with your management teams. I found this exercise to be particularly engaging with managers who operate in a high-pressure sales environment, where they often are not afforded the luxury of time to make commercial decisions.

This exercise is best utilised for past scenarios because implementing each stage of this process into every decision-making situation would be impractical and inefficient. Instead, using this exercise to reflect and become more conscious of your preconceived beliefs and biases may be enough to avoid any future rash decisions.

And let’s face it, what’s the worst that could happen from reflecting? The managers and leaders I have worked with rarely regret taking time to reflect on previous scenarios. Whether it’s to change behaviour or clarify the events that took place, the learnings are all around us. Every day’s a school day!

If you decide to give the ladder of inference a go, I’d love to hear from you!

How did you find the process?

Could it be improved?

Please share any other pearls of wisdom that could benefit those looking to make better decisions!

Conversations are an excellent tool for improving and gaining experience.

And who knows, we might learn something along the way!

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