The Turning Point

Definition

Borrowing Carlota Perez's model of technological revolutions, Kersten frames every major shift in the means of production (steam, steel, mass production, software) as a two-phase cycle: an Installation Period where new technology and financial capital combine to spawn a "Cambrian explosion" of disruptive startups, followed by a Deployment Period where the production capital of new industrial giants takes over. Between them sits the Turning Point, historically marked by financial crashes and recoveries — the moment when existing businesses either master the new means of production or become relics of the last age.

In the Book

Kersten opens the book by placing today's enterprises at the Turning Point of the Age of Software: fifty years after the 1968 NATO software engineering conference, "the pace of change feels relentless because we are passing through the Turning Point," and at the current rate of disruption, half of S&P 500 companies will be replaced within ten years. The book's diagnosis is that established organizations are trying to survive this transition using managerial frameworks — Taylorist project management, managerial accounting, organizational hierarchies — imported from the previous technological revolution (the Age of Mass Production), the same way canals, railways, and assembly lines were the infrastructure of past cycles. Kersten's own field evidence for being mid-Turning-Point is Nokia (a hardware-era master that never built software-era infrastructure) and a $1 billion "LargeBank" transformation that was project-managed to cost reduction rather than business outcome. The entire Flow Framework is positioned as the new managerial infrastructure — analogous to the electrical grid for the Age of Mass Production — needed to get organizations through this Turning Point rather than be swept away at it.

Why It Matters

This concept reframes "digital transformation" from a vague mandate into a dated, survivable event with historical precedent: every technological revolution has had losers who kept using the last era's management tools and winners who built the new era's infrastructure in time. It gives a domain-neutral lens for any moment when an organization's dominant means of production changes underneath it — the diagnostic question becomes "are we still running Deployment-Period playbooks in an Installation Period," which applies as readily to AI adoption, energy transitions, or any sector facing a step-change in its core production technology.