Maurizio Sarri has admitted his Chelsea players are still struggling to implement his ideas as they approach the mid-point of his first season and the team is prone to panic at the first setback.

Chelsea have lost three of their last six league matches and remain in the top four only on goal difference going into the Boxing Day game at Watford. Sarri had been alarmed by the “mental confusion” which gripped his team once Leicester led at Stamford Bridge on Saturday, a criticism echoed from recent defeats at Tottenham and Wolves, and has spoken individually to the core of his team in an attempt to ascertain what keeps going wrong.

“The reaction after [Leicester’s] goal was in the wrong direction,” said Sarri, who may have Álvaro Morata fit again after a slight knee injury. “We had only to continue the way we had been playing. We were in full control of the match, were dangerous without conceding anything to the opponent, so we had only to continue. I like us to play one-touch. But if you saw the second half, you saw something different. The team were shocked.

“We will prepare for Watford and look at the individual mistakes we made. We have to do everything we can to avoid the same problem happening in the future. But it’s not easy. I had an idea about what happened but I wanted to speak to the players – four or five of them – for confirmation.”

Chelsea are preparing to tweak their squad in next month’s transfer window and are expected to hold further talks with Juventus and Milan over Gonzalo Higuaín. The Argentina forward is on loan at San Siro but that arrangement may be cancelled to permit Higuaín, who played under Sarri at Napoli, to move to Stamford Bridge in a similar arrangement. Milan would be interested in Morata on a six-month loan.

There is also Chelsea interest in Lyon’s Nabil Fekir while Gary Cahill, Victor Moses, Danny Drinkwater and Michy Batshuayi, whose loan spell at Valencia has been unsuccessful and who has been offered to Crystal Palace, are expected to depart.