A NEW WORLD AT SONY

The invitation said casual, although the occasion was anything but: dinner at the media moguls' summit, an annual gathering at which financier Herb Allen played host at his Sun Valley digs. Nobuyuki Idei was late and tired, and since he was still wearing a suit, he looked like the carbon-copy Japanese manager that Hollywood had taken to the cleaners in recent years. So the Sony Corp. president doffed his jacket and donned a Men in Black T shirt for his big entrance. "Just a little marketing gimmick," jokes Idei. "But the guests congratulated us." Idei got hoots of approval for Sony Pictures Entertainment's biggest film of the year from the likes of Disney CEO Michael Eisner, Intel boss Andy Grove, Seagram's Edgar Bronfman Jr., Time Warner's Jerry Levin and DreamWorks' Jeffrey Katzenberg, to name a few.

Idei, 59, is the first Japanese to crack this exclusive club, a symbolism not lost on Howard Stringer, president of Sony's U.S. subsidiary. "He is a player," exults Stringer, the former CBS network boss brought in by Sony to clean up the mess at its U.S. operation. "He is young, dynamic, and he is taken seriously by this crowd. It's in the ether now."

Idei's stature in America's "New Establishment" mirrors Sony's performance these days. Men in Black is just one of a string of hits this year that has enabled Sony Pictures (Columbia, TriStar) to fly past $1 billion in U.S. box-office sales in record time. In music, Sony's record division continues to churn out profits, even though the industry is downbeat. Sony's PlayStation game player has blown away Nintendo. And Sony still sells $23.28 billion worth of audio-video equipment. Its second quarter was a monster, with sales rising 20.6% to $13.6 billion and income rising 60% to $464 million, from the same quarters in 1996.

Those results, while only for one quarter, underline what is becoming a remarkable strategic and cultural overhaul of this $45.67 billion company, which by the way is America's most respected brand, according to a Harris poll. Strategically, Sony is taking the plunge into the digital, wired world. It had little choice. Sony got rich and famous by building a series of great gadgets--the transistor radio, the Walkman, Trinitrons--that took advantage of unique technical advances, like those in miniaturization. Although Sony still makes a ton of money on Walkmans, its competitive edge in such stand-alone products is fading in a world where music and video are increasingly being rendered in the digital language of computers. So Sony is making personal computers with Intel, Net-surfing hardware for Microsoft's WebTV and cell phones and pagers with San-Diego-based Qualcomm Inc. Sony factories are churning out a wave of digital-based products, from high-resolution videodiscs and video-game machines to passport-size video and still cameras that plug into a PC.

A far more radical change is taking place within the company's culture. Japan's corporations, for all their technical prowess, tend to be slow-footed giants whose conservative, consensus-driven managers can choke creativity and make a bad situation worse. In Japan, loyalty and longevity are still the paths to advancement. To compete in the digital world, marked as it is by furious speed in product development and dealmaking, Sony will have to be more agile, more aggressive and more--American.