Mauricio Pochettino said Chelsea's lack of experience was exposed in a 4-1 humbling by Liverpool that showed how far the Blues have to go to compete again at the top of the Premier League.
Defeat at Anfield on Wednesday left Chelsea 20 points adrift of the Premier League leaders, down in 10th in the table, despite spending over £1 billion ($1.3 billion) on new players since Todd Boehly's consortium took charge of the club in 2022.
Much of that investment has been ploughed into young players and Pochettino believes it will take time for them to deliver on their potential.
"We need to improve as a team. During the game I think we showed a lack of experience as a team," said the Argentine on Friday.
"It wasn't a reality check. But it was the difference between a team who is solid and consistently play together in the last four or five years and a team who want to reach that same level."
Pochettino faces the daunting task of raising his players to try and stop Liverpool when the sides meet again in the League Cup final on February 25.
Chelsea appeared to get one up on the Reds last summer when they won the race to sign Moises Caicedo from Brighton for a British transfer record £115 million.
However, the Ecuador international has failed to live up to that price tag and was substituted midway through the second half at Anfield in midweek.
Caicedo's signing overtook Enzo Fernandez's record as the most expensive Premier League player of all-time after the Argentine's move from Benfica to Stamford Bridge 12 months ago.
Pochettino, though, said it was not just on his near £200 million-plus midfield pair to turn Chelsea's season around.
"I think collectively we all need to improve," added the former Tottenham boss.
"It's not just him (Caicedo) or it's not just him and Enzo. I think we all need to improve as a team."
One positive from a poor night for Chelsea was Christopher Nkunku's impact as a second half substitute.
The Frenchman's first season in England has been decimated by injury, but he has now scored two Premier League goals in less than 180 minutes on the pitch and could start against Wolves on Sunday.
"I think he's started to show that he's an option. He had one chance and was able to score a great goal and able to show his quality," said Pochettino.
"We need to take care of his situation and to build his confidence and fitness. We are happy in the way he's helping the team but we need to be careful."
