Chapter 40 Exercises: Leading in the AI Era

Section A: Self-Assessment and Reflection

Exercise 40.1: The AI-Ready Leader Self-Assessment Rate yourself on each of the five AI-ready leader capabilities discussed in this chapter, using a scale of 1 (novice) to 5 (advanced). For each capability, provide a specific example from your professional or academic experience that justifies your rating.

• (a) Which capability is your greatest strength? How did it develop?
• (b) Which capability represents your greatest gap? What specific actions could you take in the next six months to address it?
• (c) How does your profile compare to NK's profile at the start of her MBA? At the end?
• (d) How does your profile compare to Tom's profile at the start of his MBA? At the end?

Exercise 40.2: Your AI Leadership Journey Reflect on your own journey through this textbook (or through your engagement with AI in your career). Write a narrative of approximately 500 words addressing:

• (a) What was your understanding of AI when you began? What assumptions did you hold?
• (b) Which chapter, concept, or exercise most significantly changed your thinking? Why?
• (c) What is your understanding of AI now? How has it changed from your starting point?
• (d) What is the single most important lesson you have learned about AI leadership — not AI technology, but AI leadership?

Exercise 40.3: The Fluency Threshold Assessment Review the "fluency threshold for business leaders" outlined in this chapter. For each item on the list:

• (a) Rate your current fluency (1 = cannot explain; 3 = can explain clearly to a colleague; 5 = can apply in a business context).
• (b) Identify the chapter(s) in this textbook that address each item.
• (c) For any item rated below 3, create a specific study plan with timeline.

Section B: Application

Exercise 40.4: The Strategic Judgment Test You are a VP of Product at a mid-sized SaaS company ($150M ARR). Your CEO forwards you a pitch from an AI startup that claims its product can increase your customer retention rate by 25 percent using "proprietary deep learning." The demo is impressive. The CEO is enthusiastic.

Using the five principles of strategic judgment from this chapter:

• (a) Write five specific questions you would ask the startup before proceeding.
• (b) What data would you need from your own organization to evaluate the claim?
• (c) What organizational requirements would need to be in place before deployment?
• (d) Draft a one-page recommendation to the CEO that demonstrates strategic judgment — neither dismissing the opportunity nor accepting it uncritically.

Exercise 40.5: The Ethical Courage Scenario Select one of the three ethical courage scenarios from this chapter (The Profitable Bias, The Competitive Disadvantage, or The Inconvenient Audit). Write a detailed analysis of approximately 600 words:

• (a) What would you do? Be specific and honest.
• (b) What stakeholders would you consult before making the decision?
• (c) How would you communicate your decision to your board, your team, and (if applicable) your customers?
• (d) What organizational structures could you put in place to make this type of decision easier in the future?
• (e) What would NK do? What would Tom do? Would their answers differ? Why?

Exercise 40.6: Building Your Information Diet Design your personal AI learning system using the four-layer framework from this chapter. Be specific:

• (a) How much total time per week will you dedicate to AI learning? Where will that time come from?
• (b) What is your biggest risk: under-learning (falling behind) or over-learning (chasing trends)? How will you mitigate it?
• (c) Identify three people you could add to your AI learning network. What would each relationship provide?

Exercise 40.7: The Community of Practice Design You have been asked to design an internal AI community of practice for your organization (or a hypothetical organization of your choice). Create a proposal that addresses:

• (a) Purpose and scope: What is the community's mission? Who should participate?
• (b) Structure: How often will the community meet? In what format? Who leads?
• (c) Knowledge sharing: How will members share tools, techniques, lessons learned, and best practices?
• (d) Success metrics: How will you measure whether the community is creating value?
• (e) Sustainability: What will keep the community active and relevant after the initial enthusiasm fades?

Exercise 40.8: Athena's Next Chapter NK has been Director of AI Strategy at Athena for one year. Write a strategic memo (1,000-1,500 words) from NK to Grace Chen outlining:

• (a) Three AI initiatives she recommends for the next fiscal year, with business cases
• (b) One AI initiative she recommends killing and why
• (c) An update on the AI Customer Advisory Board — what has it revealed?
• (d) An emerging risk she has identified and her proposed mitigation
• (e) Her assessment of Athena's AI maturity using the five-stage model from Chapter 1 — where is Athena now, and what would it take to reach the next stage?

Section C: Synthesis Across the Textbook

Exercise 40.9: The Five Themes Retrospective For each of the five recurring themes, write a paragraph that synthesizes what you have learned across the entire textbook:

1. The Hype-Reality Gap — How has your ability to distinguish hype from reality evolved? Provide a specific example.
2. Human-in-the-Loop — Where should humans stay in the loop, and where is full automation appropriate? What principles guide this boundary?
3. Data as a Strategic Asset — What does it mean, practically, to treat data as a strategic asset? What organizational behaviors change?
4. The Build-vs-Buy Decision — What factors determine when to build and when to buy? How does this decision change as an organization matures?
5. Responsible Innovation — Is responsible AI a competitive advantage, a moral obligation, or both? Support your argument with evidence from the textbook.

Exercise 40.10: The AI Transformation Case Comparison Compare Athena Retail Group's AI transformation to one of the case studies from earlier chapters (Netflix from Chapter 1, any case from Part 6, or the Satya Nadella Microsoft case from this chapter's Case Study 1).

• (a) What did both organizations do well?
• (b) What did each organization do differently, and why?
• (c) What lessons from the comparison are generalizable to other organizations?
• (d) What role did leadership play in each transformation?

Exercise 40.11: Teaching AI to a Non-Technical Audience The chapter states that "the most effective learning technique is teaching." Test this principle:

• (a) Select one concept from this textbook that you now understand well (e.g., supervised learning, bias in AI, prompt engineering, AI ROI).
• (b) Write a five-minute explanation of that concept for a non-technical audience — such as a board of directors, a group of frontline employees, or a community organization.
• (c) Deliver the explanation to at least one person. Record their questions.
• (d) Reflect: What did you learn from teaching that you did not learn from studying?

Exercise 40.12: The Portfolio Review Using the AI portfolio framework from Chapter 31, create a hypothetical portfolio of eight AI initiatives for an organization of your choice. Classify each initiative as:

• Quick Win (high feasibility, moderate impact)
• Strategic Bet (high impact, lower feasibility)
• Moonshot (transformative potential, high uncertainty)
• Efficiency Play (incremental improvement, high certainty)

For each initiative, provide: (a) a one-sentence description, (b) the portfolio classification, (c) estimated timeline, (d) key risk, and (e) the governance review requirements (drawing on Chapter 27).

Section D: Personal Development and Forward-Looking

Exercise 40.13: Letter to Your Future Self Write a letter to yourself, to be opened in three years. The letter should address:

• (a) Your current understanding of AI and its role in business
• (b) Your current career goals and how AI fits into them
• (c) Three predictions about how AI will evolve in the next three years
• (d) Three commitments you are making to your own AI leadership development
• (e) The single most important thing you want your future self to remember from this course

Seal the letter (physically or digitally). Set a calendar reminder for three years from today. Do not open it before then.

Exercise 40.14: Your AI Leadership Development Plan Create a structured 12-month development plan for your AI leadership capabilities. Use the following template:

The plan should include: - (a) At least one action for each of the five AI-ready leader capabilities - (b) At least two actions involving learning from others (mentorship, peer learning, community participation) - (c) At least one "stretch" action that takes you outside your comfort zone - (d) A mechanism for tracking progress and adjusting the plan

Exercise 40.15: The Graduation Speech You have been asked to give a five-minute speech at a business school graduation on the topic "Leading in the AI Era." Draft the speech. It should:

• (a) Be appropriate for a mixed audience (technical and non-technical graduates)
• (b) Draw on at least three concepts from this textbook
• (c) Include at least one concrete example or story
• (d) End with a call to action
• (e) Be something you would actually be willing to deliver

Section E: Integrative Capstone Exercises

Exercise 40.16: The Board Presentation You are the Chief AI Officer of a Fortune 500 company. The board has asked you to present a 20-minute overview of the company's AI strategy. Create the presentation outline (not the slides, but the narrative structure), addressing:

• (a) The current state of AI in your industry (drawing on Chapter 1's landscape analysis)
• (b) Your company's AI maturity and capabilities (drawing on the maturity model)
• (c) Your AI portfolio and its expected business impact (drawing on Chapter 31)
• (d) Your governance and responsible AI framework (drawing on Chapters 27 and 30)
• (e) Your talent strategy (drawing on Chapter 32)
• (f) The risks you are monitoring and your mitigation strategies
• (g) What you need from the board (budget, support, patience, or policy decisions)

Exercise 40.17: NK vs. Tom — The Debate NK and Tom disagree about a strategic decision. NK believes Athena should build a proprietary customer insight platform using its first-party data. Tom, advising from his VC perspective, believes Athena should partner with a startup that specializes in retail AI analytics.

Write both sides of the argument (approximately 400 words each), drawing on concepts from across the textbook. Then write a 200-word synthesis that identifies the strongest points from each side and recommends a path forward.

Exercise 40.18: The One-Page AI Strategy Distill everything you have learned in this textbook into a one-page AI strategy for an organization of your choice. The page must include:

• (a) A statement of strategic intent (one paragraph)
• (b) Three priority use cases with brief business cases
• (c) A governance principle (one sentence)
• (d) A talent strategy (two sentences)
• (e) A data strategy (two sentences)
• (f) A metric for success
• (g) A timeline

The constraint is the point: strategy is the art of deciding what matters most. One page forces clarity.

These exercises are designed to be completed individually, in small groups, or as part of a facilitated course. Exercises 40.1-40.3 are best completed individually. Exercises 40.4-40.8 benefit from small-group discussion. Exercises 40.9-40.12 can serve as exam preparation. Exercises 40.13-40.15 are personal development exercises. Exercises 40.16-40.18 are integrative capstone exercises suitable for final course assessments.