Understanding the Ladder of Inference: Navigating Cognitive Pitfalls

Prof. Richard Peterson • November 28, 2023
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Dispute resolution education provides many tools for students to use in diagnosing and facilitating resolution of conflict. One such tool that I have used in my teaching for many years is known as the ladder of inference. In our daily lives, we often make decisions based on our perceptions and interpretations of events. However, these interpretations are not always accurate and can lead to misunderstandings and conflicts. The ladder of inference, a concept introduced by organizational psychologist Chris Argyris, sheds light on how our thoughts and beliefs can shape our actions and influence the outcomes of our interactions.

The ladder of inference illustrates the mental process we go through when making sense of the world around us. It consists of seven steps, each building upon the previous one, leading to a potentially biased conclusion. These steps are:

  1. Observation: We start by observing a situation or event. However, we cannot observe everything, so we select and focus on certain aspects based on our personal biases, experiences, and beliefs.
  2. Selecting Data: From the information we observe, we filter and select certain data points that seem relevant to us. This filtering process is influenced by our personal preferences and existing mental models.
  3. Adding Meaning: Once we have selected the data, we ascribe meaning to it based on our beliefs and assumptions. We interpret the data through the lens of our existing knowledge and past experiences.
  4. Making Assumptions: Next, we make assumptions based on the meaning we have assigned to the selected data. These assumptions may be unconscious and are often influenced by our biases and preconceived notions.
  5. Drawing Conclusions: Based on our assumptions, we draw conclusions about the situation. These conclusions may be incomplete or distorted due to the limited data we have considered, as well as the biases and assumptions we hold.
  6. Forming Beliefs: We adopt beliefs based upon the conclusions we have drawn from our current situation, which may be stronger if also based on conclusions drawn from past experience. Our beliefs are further reinforced and applied in similar future situations.
  7. Taking Action: Lastly, we take action based on our conclusions. Our actions are driven by our beliefs and assumptions, which may not accurately match the reality of the situation. This can lead to misunderstandings, conflicts, and ineffective decision-making.

Application of the ladder of influence is illustrated in the following example I frequently use when introducing this framework to students.

A corporate president, Alex, contacted a dispute resolution professional, Megan, for consultation regarding the president’s plan to fire a high-level sales employee who had been with the company for many years. When asked about the reason for the firing decision, Alex said, “Ed is just not committed to the company. He’s got to go.” Megan then asked, “Can you tell me what Ed has done, or not done, that leads you to conclude he is not committed to the company?” Alex responded, “He is constantly late in submitting his monthly and quarterly sales reports. I have spoken to him about this before, but the reports are still late. I can’t stand it when people are late! It’s just a sign of laziness, and a clear indication that he is not committed to his work, or to this company. I know he loves golf. He should be spending less time on the golf course and more time doing his work. He’s got to go.”

Megan then spoke with Ed. “Tell me how things are going with your work.” Ed responded, “Couldn’t be better! Things are great! In fact, I think I’m getting a promotion next week.” Megan then asked, “What makes you think you are going to be promoted?” Ed replied, “Well, the president wants to meet with me next week and I just have a feeling that I am going to be promoted. My sales have exceeded all expectations, and our customers love me. I have been the top salesperson nine of the past twelve months, and my customer satisfaction ratings are the highest in the company.” Megan asked about his work schedule, to which Ed replied, “My family accuses me of being a workaholic. I probably work 14-15 hours a day. I know it’s not fair to them, but I need to keep my customers happy. I do wish I had more time to myself; I love golf but haven’t had time to play in over a year. But that’s ok; I love my job, and whatever free time I do have, I spend with my family.”

Megan used the ladder of inference to help Alex and Ed see the circumstances more objectively and to help Alex avoid acting in a way that would have been extremely detrimental to the company and to Ed. First, Megan walked Ed down the ladder of inference in order to look more carefully at the data pool. Previously, Alex only selected data that supported his preconceived ideas (Ed was habitually late submitting his monthly and quarterly reports) and that also were consistent with his own personal preferences and preexisting mental models or biases (people who submit their work late are lazy, unreliable, and not committed to the company.) Alex attached meaning and made assumptions based on the limited data selected (Ed was purposefully ignoring his repeated instructions to submit his reports on time; and intentionally doing so because he was lazy, unreliable, distracted, and not committed to the company.) Alex further assumed that Ed’s late submission of reports was caused by his spending excessive time playing golf instead of completing his reports, because Alex had noticed several golf trophies, golf themed pictures and other golf paraphernalia in Ed’s office.

Megan helped Alex see, and consider, additional data that he previously ignored. In that regard, she asked Alex questions about the quality of Ed’s work, including comparative sales data, thoroughness, and detail of reports submitted, as well as customer satisfaction feedback. She also reviewed with Alex Ed’s past employee evaluations, which were always excellent. Not only had Alex initially ignored this information, but he had never even considered that it could be relevant to his analysis and decision. He was surprised to learn that Ed was top salesperson nine of the past twelve months. He was astonished by the glowing customer feedback the company consistently received about Ed. He was embarrassed by his erroneous assumption that Ed was slacking off in his work by spending excessive time playing golf. In short, Alex had been so focused on Ed’s late submission of reports that he failed to consider additional relevant information necessary for good judgment and sound decision making.

With this additional data selected and considered, Megan then walked Alex back up the ladder of inference resulting in a more objective analysis of the situation. It allowed Alex to consider the late submission of reports in the broader context of Ed’s overall performance. This did not cause Alex to set aside his need for Ed to submit his reports in a timely fashion, but it did prompt Alex to consider Ed’s shortcoming in the context of Ed’s overall performance, and thus provided a more effective framework for analyzing the situation.

Megan next met with Ed, and was able to walk him down the ladder of inference, helping him recognize additional data relevant to his late submission of reports. With this additional information now in mind, Megan walked Ed back up the ladder of inference, helping him see the importance of timely submission of reports in the broader context of the needs and attitudes of the corporate president. Not surprisingly, Ed was unaware of the critical importance of the information he had ignored, as well as questions he should have asked in order to understand the impact his late submission of reports had on the president’s evaluation of his employment. He had failed to grasp the urgency and importance of the president’s repeated reminders and, by focusing only on data supporting the positive side of his employment record, Ed made biased assumptions and reached erroneous conclusions that almost cost him his job. Walking him back up the ladder of inference, Ed gained more objective insight into his status with the company and his relationship with its president.

In the end, Ed was not fired; nor did he get a promotion at that time. In a joint meeting facilitated by Megan, Alex acknowledged the tremendous contribution Ed had made to the success of the company. He also was able to discuss with Ed, in a collaborative manner, the reasons why timely submission of his reports was so important. In that regard he learned that it was not only Alex’s personal preferences for punctuality, but also the fact that, when Ed submitted his reports late, Alex was often unable complete and submit his own reports to the Board of Directors, and sometimes lacked the full information he needed to discuss sales data at board meetings.

As seen in this example, the ladder of inference highlights the cognitive pitfalls we encounter in our decision-making processes. It emphasizes the importance of being aware of our own mental filters, biases, and assumptions. By understanding how our thought process influences our actions, we can improve our ability to make more objective and informed decisions.

Awareness of the ladder of inference allows us to challenge our assumptions and seek out additional information before drawing conclusions. It encourages open-mindedness, empathy, and the ability to consider multiple perspectives. By consciously climbing down the ladder, we can reduce misunderstandings, enhance communication, and build stronger relationships.

The ladder of inference serves as a valuable tool in understanding the complexities of human cognition and decision-making. By recognizing our tendency to ascend the ladder quickly, we can take steps to slow down, question our assumptions, and seek out additional information. This will lead to more accurate interpretations, effective decision-making, and improved relationships with others.

In a world where misunderstandings and conflicts are common, the ladder of inference provides a framework for developing self-awareness and critical thinking skills. By actively engaging with this concept, we can navigate the cognitive pitfalls that hinder our understanding and work towards building more harmonious relationships in a more productive society.

Learn more about dispute resolution programs at USC Gould.


  • Argyris, C., & Schön, D. A. (1978). Organizational learning: A theory of action perspective. Reading, MA: Addison-Wesley. Argyris, C. (1991). Teaching smart people how to learn. Harvard Business Review, 69(3), 99-109.
  • Senge, P. M. (1990). The fifth discipline: The art and practice of the learning organization. Doubleday/Currency.

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