The visitors are in dire trouble in their one-day international series against India after a 50-run loss in Kolkata overnight put them 2-0 down.
Smith said batting collapses had become a worrying trend in all forms of Australian cricket after losing their last eight wickets for 112 in game two.
“We’ve had a lot of collapses and we need to stop,” Smith said.
“It’s a hard one to put my finger on but whatever it is, it needs to change.
“We need to make better decisions when we’re under pressure and start playing the game properly.
“It’s not good enough.”
Australia have lost their last 10 ODIs away from home. They need to break that streak in Indore on Sunday to keep the series alive.
Smith played well for 59 at Eden Gardens until he was caught in the deep off the bowling of Hardik Pandya.
Marcus Stoinis worked hard for an unbeaten 62, but Australia lost too many wickets due to poor shot selection as the Indian bowlers kept the pressure on.
“It’s easy just to sit here and say it needs to stop but when you get out in the middle you need to change what you’re doing because it’s not working,” Smith said.
“Watching the ball closer or maybe the guys are trying to watch it too closely and forgetting about just playing the game.”
Smith lamented his side’s inability to build partnerships, with his 76-run stand with Travis Head their best effort in the first two matches.
That partnership ended Head hit a seemingly harmless full toss straight to mid-wicket on 39.
Makeshift opener Hilton Cartwright’s position is under pressure after being bowled for one in his first two ODIs.
Aaron Finch is on the road to recovery from a calf injury and could come into contention for the must-win clash in Indore.
Part-time wicketkeeper Peter Handscomb could also be an option after Matthew Wade made 11 runs across the first two matches.
We value local independent journalism. We hope you do too.
InDaily provides valuable, local independent journalism in South Australia. As a news organisation it offers an alternative to The Advertiser, a different voice and a closer look at what is happening in our city and state for free. Any contribution to help fund our work is appreciated. Please click below to become an InDaily supporter.