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Susumu Satani, CEO of Tokyo-based consulting firm Prored Partners Co., is somewhat of an outlier in his field; he is convinced performance-based consultation is the best approach to tackling client needs.

Through his firm, Satani hopes to help as many companies as possible while satisfying his own curiosity to achieve results that lead to greater client satisfaction.

Companies with potential to improve their profitability and productivity are sometimes hesitant to hire consulting companies because of reservations about high consulting fees and whether their goals are achievable. Prored Partners caters to these companies and many others that vary in both size and industry.

Satani himself is no stranger to the field. He began his career at PwC (then Booz & Company) 20 years ago and previously worked for Japan REIT Advisors Co., a real estate investment trust, for the last five years before establishing Prored Partners. This experience helped realize his idea to create a performance-based consulting firm since real estate investment also follows a business model based on a result-reward system.

Currently, Prored Partners is the only listed domestic consulting firm that charges clients solely performance-based fees without any fixed rates. Satani shared his thoughts on why he believes it is still difficult for other companies to do the same.

“I assume there are several reasons. One of them is that it is hard to stabilize sales,” he said, explaining that performance-based systems make it challenging to forecast sales and that some of the projects do not have a clear end date.

“Right after we launched our company, we simply worked twice as much,” Satani said with a laugh. Now, the company has more than 100 clients and a large enough number of ongoing projects of various sizes and lasting durations for sales to stabilize. “We also managed to raise funds from the initial public offering, so we don’t have to depend on short-term profit,” he added.

Another factor that differentiates Prored Partners from other firms is its organizational structure. Satani explained that most consulting companies structure their organizations based on industry — think manufacturing, health care or finance — prioritizing efficiency in closing new deals. In this sense, it’s easier for a single consultant to cover one specific industry that they are familiar with and have built a network of connections within.

Conversely, Prored Partners divides its teams according to service categories “because we focus on our quality of service,” said Satani. Marketing, logistics, energy-related costs and facility costs are some of these categories. That way, if a client wants to reduce a certain cost, Prored Partners can send in an expert regardless of which industry the client belongs to.

“Each of our consultants have particular skills, knowledge and experience in an expense item that they are good at reducing,” said Satani. For example, Prored Partners can work to effectively reduce the cost of direct materials — the raw materials needed to construct finished goods, excess or damaged materials and overhead factory fees, among other things.

The firm is also confident in its ability to lower utility costs, financial fees and other expenses such as advertising and promotional costs that require a high level of expertise, not to mention the cost of indirect materials; this refers to selling, general and administrative expenses that include everything from personnel expenses to office supplies and communication costs.

Most consulting companies target only the more general cost of indirect materials rather than other expenditures because their consultants’ expertise lies in industry workings as opposed to cost items.

Additionally, Prored Partners’ unconventional approach extends beyond how its teams are divided. “Since we charge consulting fees based on performance, not just planning, we not only propose our plans, but also execute them,” said Satani, explaining that consulting companies generally propose plans for the client to execute, or charge clients for the execution separately.

“In our case, if one of our clients wants to reduce the cost of logistics, we negotiate with the client’s logistics company. If the logistics company is already charging the minimum fees and is unable to offer a further discount, we even go as far as consulting the logistics company at practically no charge, so we can lower the costs of the supplier,” Satani said.

In addition to tapping into its potential to assist organizations across a broad range of industries, Prored Partners’ business style may assuage skeptical companies’ fears — even more so if they are constrained by tighter budgets but still desperately need third-party expertise. Those working through internal challenges or confronting a stagnant economy may find this approach appealing compared to standard consultation services.

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