2009 was in many ways a watershed year for Indian entrepreneurs and investors. Pre 2009, growth was overwhelming – the challenge was to swim with the rising tide – making sure you were ready with the capital and people to grab the opportunity. Talent was scarce but we knew how to compete against the MNC’s and grab our share with the right mix of cash, stock and lure of an adventure trip. But the first big blip was a true eye opener.

Suddenly the blue chip recruits did not feel motivated to stay on and take the tough decisions of firing and cutting costs – now that the paper upside looked very remote. Not only was the appetite for tough times missing but also there was very little learning that could be leveraged for down times – most had seen only ups with very few having tasted and survived such an unpredictable global downturn. Soon enough the runway which the professional thought that they had negotiated for themselves, disappeared. Owner promoters and founders were anxious to conserve value and were quickly reneging on their committed support. The time looked right for sabbatical as more executives decided to take off rather than plunge themselves into messy waters. The NRI’s and the expats did not like the look and feel of the new biz model which could not pay for international schools and gated communities.

Very soon investors too realized that the real returns were only available when they could up the ante to the next level: create companies with new business models not “me toos” copying successful western ones both in the venture and PE world. Is the real return in “building Amazon” for India or changing the way books are written, published and distributed? Is the Indian PE investor going to gain by building yet another auto company or should he be betting on building a new way for transporting people from point to point? 2009 proved to be a wake-up call. It removed the easy options and pitted investors in the more unknown, risky but higher rewards path of building businesses which will redefine rather than recreate traditional western business models. I believe we are at the very early stage of this great journey which will reshape our view of the business world.

So what kind of leadership will this demand?? It calls for leaders who understand the big shifts that are happening in the world intrinsically not at a superficial level. Who are able to then distill these changes to paint a vision for what businesses need to do differently – redefine their landscape in some ways. Like the good guys who saw mobile payment as a means to redefine conventional banking not just a “mode of payment”. Who then have the passion for proving their vision and therefore are willing to commit themselves to executing through ups and downs. These are people who are driven by the impact that they can see themselves making and not by business cards and cars they drive. Such transformational leaders are required at the helm of businesses today whether it is a VC funded start-up growing wings or a PE funded company redefining its path. This is not more of the same and therefore executives who have perfected the art of “doing more of the same” better and better will be found misfits for such roles.

Most of these leaders are hidden till we search, probe and unearth them for unless we have the right message they are not interested in reaching out. Often enough these are executives who have experimented & failed not the traditional, always successful, born with a silver spoon stereotypes that we paint for our leadership talent. They are often not in visible jobs as they have been very busy making change happen wherever they are. They are not the “stars” hailed by media and feted by every new MNC which sets shop in India. They have been entrenched in execution perhaps in some unfashionable businesses in the dusty town and cities of India or Indonesia. The challenge lies not only in finding them but also in giving them the runway they need to succeed. More often than not, transformation is a slow process in the beginning and gathers speed only later – Rome was not built in a day!

As investors you need to prepare that runway by making sure that there is full backing and support from founders/ family owners etc. to make the change happen. Transformational leaders need empowerment and a free hand to recruit and build teams which will help them execute. In fact this is the magnet that attracts such folks.

The good news is that we have in our midst today people who can rise up to this challenge and in fact potential leaders who are waiting for the right opportunity to prove themselves. For today more than at any other time ambitious executives are hitting the glass ceiling faster and the frustration levels are high – right time for all the investors here to wear the recruiting hat!

My message for 2010 – let us build a cadre of transformational leaders who can redefine the business landscape from India. Whose values, ethos and outlook are quintessentially Indian even as they perceive the world as their arena.