The Warriors' owner also believes the organisation has suffered from an underlying fragility.
Watson, in New Zealand for a brief visit to coincide with the club's end of season function and a board meeting, pulled no punches with a frank assessment yesterday.
"There is fragility there and it manifests itself under pressure," said Watson. "Think about golf. You can be a good golfer, with a five or six handicap and suddenly you are at a pro-am playing with Michael Campbell or Tiger Woods. You fall apart because you are under pressure - there are people watching you, there is expectation.
"We have that in our organisation and it comes out at times when we are expected to win," added Watson. "We only had to win a couple of home games [against the Tigers and Eels] to make the eight basically and we couldn't do it. It looked terrible."
Watson referenced tangible improvements in many areas this season, on and off the field, but said questions still remained when the going got tough, evidenced by the team's fluctuating fortunes in 2016.
"It is something that is embedded in our culture psychologically - and it is not a one person fix," said Watson. "It's a group thing and we haven't nailed it. But we have to get rid of it. We have to have consistent performance."
There were hints of a turnaround this season, especially during their nine game run in the middle of the season when the Warriors recorded six wins and three golden point losses.
There was a harder edge to their play, and an apparent ability, for a few weeks at least, to produce a similar level of performance. But it didn't last and that, more than anything, prompted the need for change in the coaching structure.
According to Watson, those conversations had started at board level earlier this year, as the team got the wobbles in the opening third of the season when they won three of their opening eight games and suffered embarrassing losses to the Tigers, Sea Eagles and Storm.
"During the year we looked at a few scenarios," explained Watson. "We could be top four or six, make the eight or miss the eight. One of those scenarios was that we may need to change the coach. So throughout the season, you are looking at who's available, who's off contract, who might be the best fit culturally for where we are going. We created a list and [new coach Stephen] Kearney was at the top of that list."
Watson admitted there had been talks with Kearney - and some other contenders - during the year.
"We have been in discussions with him and other people, throughout the season, very, very confidentially," he said.
Watson said the decision evolved quickly as the Warriors staggered and stumbled in the final third of the season.
"Even if we had limped into the eight, it would have been the same decision," said Watson. "[For Andrew] it wasn't like if you don't make the eight you haven't got a job. It was 'what is the best thing for this organisation?' You could see several weeks out, if we made it, we were just going to make it. It wasn't good enough. We simply capitulated too many times this season."
- By Michael Burgess of The New Zealand Herald
