This study examines the direct and indirect effects of strategic flexibility and innovation on job satisfaction and employee performance. The sample of this research is 120 employees of the Small and Medium Industry of Clothing in East Java Province using cluster random sampling technique. The data analysis model uses the analysis technique PLS (Partial Least Squares regression) with the Smart PLS version 3.0 program. The results of hypothesis testing find that strategic flexibility has a direct effect on employee performance. Strategic innovation is having no direct impact on employee performance. Job satisfaction has a direct impact on employee performance. But indirectly the strategic flexibility and strategic innovation affect employee performance through job satisfaction. This implies that job satisfaction can bridge the influence of strategic flexibility and strategic innovation on employee performance.