AI Cannot Replace Human Stakeholder Relations
The world’s leading researchers agree!
If 2024 was The Year of AI and The Resurgence of Trump, 2025 needs to be the year in which the world finally recognises the importance of humaneness and HUMAN relations.
Market studies estimated the global AI market size grew from $24.9 billion in 2019 to $214.6 billion in 2024. It is expected to grow to $1,339 billion by 2030 (MarketsandMarkets, 2024). This dramatic advent of AI was accompanied by a deep-seated dread, that AI will eliminate jobs across various industries and professions, including stakeholder relations.
However, leading professors at Harvard, MIT, Stanford and New York University agree: AI will never replace human engagement.
Stakeholder Relations is one of the people-facing white collar jobs, which can be enhanced but never effectively replaced by AI. AI cannot replace the human touch that is essential in successfully engaging with stakeholders. Many scholars have written extensively about the impact of AI on business, governance, and interpersonal relationships.
What leading Harvard, MIT, NYU and Stanford Professors have to say
Dr. Julian De Freitas - Director of the Ethical Intelligence Lab at Harvard Business School, demonstrates that unlike humans, AI can’t flexibly navigate changing environments yet because it does not have a notion of its “self”. “Algorithms can be very good at specialized tasks”, with “almost superhuman capabilities when confined to specific domains,” says De Freitas, who studies automation in marketing. “But what makes humans so effective is that we can do many things. We're pretty flexible.” His research shows how humans are superior to AI and how this relates to commercial value.
Dr. Melissa Schilling - Professor of Management and Organizations at New York University, studies the intersection of technology and management. In her research, she discusses how technology can augment but not fully replace human interaction, especially in stakeholder relations.
Dr. Sandy Pentland – Director of MIT’s Media Lab and Fellow at Stanford’s Institute for Human-Centered Artificial Intelligence (HAI) studies social physics and human interaction. He emphasizes the importance of human communication and networks in organisational behaviour and argues that while AI can process information, it lacks the nuances of human interaction.
Dr. Sherry Turkle – Professor of Social Studies of Science and Technology at MIT, explores the impact of technology on human relationships. She warns against the over-reliance on technology for communication and stakeholder engagement, as she strongly believes that human empathy and understanding cannot be replicated by AI.
Dr. Andrew Ng – Founder of DeepLearning.AI, Coursera and Adjunct Professor at Stanford University is a global leader in AI and machine learning. He believes in the complementary role of AI and human workers. Dr Ng writes that while AI can enhance efficiency, human relationship management is irreplaceable, especially for engaging stakeholders.
The Irreplaceable Human Element in Stakeholder Engagement
These Professors, amongst many other leading scholars, have highlighted the following key human capabilities, which are irreplaceable in Stakeholder Engagement:
Emotional Intelligence and Empathy
AI systems, while being technologically advanced, lack emotional intelligence. They struggle to understand complex human emotions, which are vital in building and maintaining business relationships. Research surveys show that over 90% of executives view emotional intelligence as a key factor in successful stakeholder engagement. This ability to empathize cannot be replicated by machines.
Nuance and Contextual Understanding
Social communication relies heavily on subtle cues and context. AI lacks the ability to interpret these nuances leading to misunderstandings, arising from misinterpreted emails or texts. Tech firms, such as Wells Fargo, Facebook (now Meta), Twitter and Google, all faced a significant backlash when its automated responses to stakeholder inquiries were deemed cold and unhelpful, highlighting the pitfalls of contextual blindness.
The public outrage was particularly intense against Facebook in 2017/18, when small business accounts were mistakenly suspended, and again over the Cambridge Analytica scandal over the abuse of private data. Customers complained about Facebook's lack of human customer support, frustrated by generic, automated responses that failed to address their specific concerns. Who has not experienced the pain of the automated response call centre and having to listen to a list of 10 options and none are relevant to your need (high blood pressure trigger warning!).
Similarly, stakeholders criticised the Wells Fargo bank in 2020, for using generic and unempathetic automated replies to inquiries regarding the Paycheck Protection Program (PPP) during the COVID-19 pandemic.
The public outrage expressed in the media, and the resulting reputational damage to these companies, highlights the importance of human customer interaction and contextual awareness, especially during sensitive situations.
Building Trust and Rapport
Human interaction is critical for developing trust and rapport. Stakeholder relations professionals EXCEL (among so many other things!) at personal connections and in building genuine relationships. This is the core philosophy of stakeholder management, as advocated by the father of Stakeholder Theory, Dr Edward Freeman, way back in 1984.
This stakeholder-centric approach is a core value of ethical (and more highly evolved!) business leaders. These forward-thinking leaders understand that a sustainable and ethical company strives to create value for all stakeholders, not just maximum profits for shareholders. In engaging stakeholders, nothing says WE CARE, like the warmth of a face-to-face meeting or a heartfelt phone call.
AI's Role as a Tool, not a Replacement
While AI cannot replace the Stakeholder Relations professional, it can certainly be used to make stakeholder engagement more effective in the following ways:
By streamlining repetitive administrative tasks, such as data entry and report generation, allowing the humans more time for face-to-face engagement.
Enhancing data analysis and insights, by quickly analysing large datasets and identifying stakeholder trends and sentiments more quickly than humans can.
Improving communication efficiency, using automated replies and chatbots. Companies need to be aware that while AI can handle basic inquiries, human professionals are required to tackle more complex issues. Can we please put the SERVICE back into customer service?
The Unique Skills of Stakeholder Relations Professionals
Stakeholder Relations professionals are pretty special people generally (author’s opinion!). Even the illustrious Professors agree that we have a unique set of skills, which cannot be replaced by AI. These include:
Strategic Thinking and Problem-Solving
Stakeholder engagement involves complex problem-solving that requires strategic thinking. AI lacks the capacity to navigate these intricate challenges. In 2018, Forbes estimated that companies lose an estimated $75 billion a year due to unresolved stakeholder conflicts.
When the proverbial “s - -t” hits the fan, who does the EXCO turn to, to address the issue? Stakeholder Relations to the rescue… with creativity, empathy and insight!
Proactive Relationship Building
Building long-term relationships is crucial in stakeholder relations. Who likes the friend who only appears when s/he needs something? No one! Proactively identifying and building strategic relationships is a source of competitive advantage. The human element is irreplaceable to achieve this goal.
Adaptability and Crisis Management
The ability to adapt quickly during crises is essential. AI cannot match the quick thinking and emotional responses of a human professional. During any corporate crisis, it is the stakeholder-facing teams that successfully navigate stakeholder concerns, turning potentially damaging situations into a positive outcome.
Social facilitation and community engagement
Companies involved in mining and infrastructure rollout will understand the importance of having good community-level relations, especially in rural areas and developing countries.
Ms Nombasa Kumalo, a social facilitation consultant, says there are very diverse and complex social interactions that require adaptability and cultural sensitivity in these contexts. “In rural development, understanding and navigating cultural sensitivities has a huge impact on outcomes for stakeholder relations. This can only be learned through human contact”.
Ms Kumalo says that such indigenous knowledge and protocols are often not documented for the public and require an ethnographic approach of being immersed in the community by the stakeholder engagement practitioner.
In conclusion, while AI offers useful tools for efficiency and analysis, it cannot replace the human touch and emotional intelligence needed for stakeholder engagement.
The world’s leading scholars agree that the unique skills of Stakeholder Relations professionals are irreplaceable and cannot be automated or simulated.
Author:
Ms Cassandra C Gabriel is the Executive Director and Co-Founder of the ISR - The Institute of Stakeholder Relations and Managing Director of Gabriel & Associates (Pty) Ltd.
She can be contacted at cassandra@stakeholderinstitute.org / cassandra@gabrielweb.co.za .
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