We investigate the manner in which lenticular galaxies are formed by studying their stellar kinematics: an S0 formed from a fading spiral galaxy should display similar cold outer disc kinematics to its progenitor, while an S0 formed in a minor merger should be more dominated by random motions. In a pilot study to attempt to distinguish between these scenarios, we have measured the planetary nebula (PN) kinematics of the nearby S0 system NGC 1023. Using the Planetary Nebula Spectrograph, we have detected and measured the line-of-sight velocities of 204 candidate PNe in the field of this galaxy. Out to intermediate radii, the system displays the kinematics of a normal rotationally-supported disc system. After correction of its rotational velocities for asymmetric drift, the galaxy lies just below the spiral galaxy Tully-Fisher relation, as one would expect for a fading system. However, at larger radii the kinematics undergo a gradual but major transition to random motion with little rotation. This transition does not seem to reflect a change in the viewing geometry or the presence of a distinct halo component, since the number counts of PNe follow the same simple exponential decline as the stellar continuum with the same projected disc ellipticity out to large radii. The galaxy's small companion, NGC 1023A, does not seem to be large enough to have caused the observed modification either. This combination of properties would seem to indicate a complex evolutionary history in either the transition to form an S0 or in the past life of the spiral galaxy from which the S0 formed. More data sets of this type from both spirals and S0s are needed in order to definitively determine the relationship between these types of system.