Despite the significant consequences of poor managerial decision making, it is astounding to see the high weighting of intuition in decision making processes for many organisations. In fact, a study by Accenture in 2013 found that 70% of surveyed Australian small-to-medium sized managers say they trusted their gut instinct over any professional advice when making decisions.

Although gut instinct will creep its way into decisions from time to time, there are ways to prevent it from clouding effective decision making. One way is through the utilisation of the Ladder of Inference. The Ladder of Inference provides a method for looking at holes in your logic, setting aside personal influence as much as possible and preventing your judgement from being clouded by emotions. This method has seven topics that each form a separate step on the ladder. These are: reality and facts, selected reality, interpreted reality, assumptions, conclusions, beliefs and actions. According to this model, instinct will cause your mind to naturally skip some steps of the ladder when initially forming decisions. Consequently, effective decision making requires individuals to step up and down the ladder as much as they need to in order to develop holistic decisions. Below we will take a look at each of the ladder steps.

1. Reality and Facts

This step of the ladder requires individuals to consider what has happened and all of the facts surrounding the situation. In organisational settings, this step may involve research and SWOT analysis. Individuals commonly skip this step of the ladder; however, it is an important step to reduce bias and provide perspective for the remainder of the decision-making process.

2. Selected Reality

The second step of the ladder considers the information that individuals decide to filter informing their decision. The information that individuals decide to select is usually based on prior experiences.

3. Interpreted Reality

This stage of the ladder translates the selected facts into a personal meaning. By developing a personal meaning based on the facts developed in step one and two, a decision is likely to be more justifiable.

4. Assumptions

At this level, assumptions are made based on the interpreted reality that has been developed. The assumptions made will vary for every individual and instinct may play a role in shaping these.

5. Conclusions

Once assumptions are clear, conclusions can be formed. In order to make more responsible conclusions at this stage of the ladder, it is recommended that individuals ask for feedback from their peers.

6. Beliefs

Beliefs assist in solidifying the conclusions made in step 5 of the ladder. If beliefs aren’t strong at this stage, it is possible that further situational analysis needs to be undertaken before making a decision. As such, it is recommended that individuals step back down the ladder to form more concrete conclusions.

7. Actions

Once concrete beliefs are formed, reasonable actions can be undertaken. The consequences of these actions can then be utilised in the initial ladder stages of future decision-making processes.

Overall, the ladder of inference displays how instinct will naturally creep its way into any decision making process. However, being aware of the likeliness of instinct and following a systematic decision-making process can assist individuals in making more responsible decisions.