Universally praised by critics, so far, the split-scheme appears to revolve around a belief that value will be unlocked in business units which will remain at the core of BHP Billiton, while also unlocking value in the business units consigned to a new company.

If such a trick can be performed with a simple splitting of one company into two it must be causing a few BHP Billiton shareholders to wonder why the same value cannot be created just as easily by keeping the company as a single entity.

There is no easy answer to that question which is why management at BHP Billiton avoids giving a direct response because if anyone did it would have to acknowledge two critical and embarrassing points.

• Firstly, the plan to split was almost certainly not generated internally at BHP Billiton, and
• Secondly, the people really driving the agenda are not the BHP Billiton management team.

Blower has been around long enough to know that the split-scheme has its roots in an external management consultancy called in by BHP Billiton management to provide “a plan for the future”

Whether it’s a good plan is another question because all that’s required is a plan sufficiently different to what the previous management did to be described as a good plan.

Doing something (anything?) different to previous management is from Management 101, as taught in business schools around the world.

The first step from a chapter headed “new broom sweeps clean” is for a new management team to quickly bring to account all the bad news, including losses and project deferrals, and blame the mess on the previous mob.

The second step is to call in management consultants with their brief being to recommended doing something different, while also providing 10 bullet points suitable for a power-point presentation which seeks to justify whatever has been recommended.

So far, the plan to split BHP Billiton has been text-book perfect, including a softening up period before the formal announcement which will include a claim that attempts had been made to sell surplus operations without getting any reasonable offers.

Politicians behave in exactly the same way as management when it comes to a “bad news, good news” announcement which will include a claim that “this is the only way forward”

The problem with what’s happening at BHP Billiton is it is so awfully predictable – all the way to predicting that in another decade or so someone new at the company will say the business should never have been split because some of the bits dumped are performing better than the bits kept.

The test of that claim is that 13 years ago a previous management team at BHP followed a fashionable management theory which said big was better, and that the only way forward was to acquire Billiton.

Apparently it wasn’t the only way forward because most of the assets being hived off into a new business, which has been dubbed by a clever headline writer “the unfashionable metals company”, are Billiton assets.

Probably without appreciating the accuracy of that headline the reality of the BHP Billiton split is exposed as the nonsense it really is because of the key point in Blower’ argument that what’s fashionable today might not be fashionable tomorrow – before returning as a fashion!

Totally overhauling a big business because of a management theory is not something that should happen every decade. It’s too costly, and fails to recognise how cyclical the commodity business can be.

Unfortunately for the majority of shareholders in BHP Billiton who are paying for the second dramatic makeover of their company in 13 years the agenda is being set by people who do not necessarily have the best interests of the majority in mind.

They are the institutional fund managers who work to a set of annual returns and who must achieve short-term gains to justify their jobs, and the fees they charge for managing other people’s money.

It is the institutions, and the management consultants, perhaps acting with a common aim, who are telling BHP Billiton management that it’s time to split because it’s also time to make a short-term profit.

How amusing it will be in a few years to check the performance of the old BHP Billiton with its fashionable four pillars of iron ore, petroleum, copper and metallurgical coal to see whether it has outperformed the spin off with its currently unfashionable nickel, aluminium, manganese and thermal coal.

If the result is not what’s expected today perhaps there will be a new management theory in vogue which calls for the acquisition of nickel, aluminium, manganese and thermal coal companies – and guess where you can find one?