The team went down 26-22 to the Lions at Carisbrook on Saturday night, dropping it to eighth on the table, in what is becoming a tightly contested race for the sixth and final spot in the playoffs.
It was the first win in New Zealand for the Lions, and it beat a Highlanders side which never got out of first gear.
Joseph said the side plain and simply did not play well.
He was refused to blame young first five-eighth Lima Sopoaga, who missed touch with three minutes left, handing the ball back to the Lions to score the match-winning try.
"It's a bit rough, blaming it all on a missed touch-finder. As a team, if you put yourself in that position, then maybe you're not worthy of winning the game, anyway. There were lots of those things - not straight in lineouts, giving the ball away. They all equate to same thing - a loss," Joseph said.
"There were a lot of mistakes, a lot of unforced errors. I don't know why we had those errors. You have 10 days off, which actually equates to two weeks off. We had a bit of momentum going into the bye but also we were tired.
"In saying that, this was a pretty spirited Lions team. They played bloody well, we did not play as well as we should have and therefore lost the game."
" You look at the simple errors, not straight on the line, unforced errors that let them off the hook. There were a couple of lineouts right on the attacking zone and they kicked it out to relieve the pressure. Getting that stuff right is pretty much up to the players."
He said the side now had plenty of motivation for its final three games.
The side takes on the Force on Friday night at Carisbrook and then faces the Waratahs in Sydney and the Blues in Auckland. It probably needs to win them all, though the other three sides do have to play each other.
It sits just behind the Bulls, Waratahs and Sharks on the table, four points separating the four sides.
"We've got everything to play for. We have snuck into a few towns and knocked a few teams over. This team snuck in tonight and taught us a lesson."
The match was punctured by penalties from referee Jonathon White, but he never issued one yellow card and did not give the Lions a warning until well after the hour mark.
Joseph, though, had no problem with the officiating.
"There were times when there were penalties in front of the post or there or thereabouts, where generally, at this level of rugby, you tend to get in favour of a yellow card.
"We never got that tonight but I did think the Lions played well and were physical at the breakdown. That was a strong point in our game and they certainly met that, and it was at least even."
The side now needed to react quickly to the loss to be ready to face the Force.
"It is a great learning curve for them [players]. We've got to get back on the horse on Monday."
Loose forward Adam Thomson did not take the field for the Highlanders as his cracked ribs were still troubling him. He should be back for Friday night.
