On Tuesday, a Borussia Dortmund XI featuring first-teamers Gonzalo Castro, Marcel Schmelzer and Nuri Sahin lost 1-0 to local fifth division side Westfalia Herne in a 45-minute exhibition game.

After crashing out of the Champions League without a win, being knocked out of the Europa League by Red Bull Salzburg and scraping into fourth place on goal difference, 29 points behind champions Bayern Munich, it was just the latest setback in another underwhelming season for the Black and Yellows.

"Let's not be under any illusions; a lot has to change," said the club's chief executive, Hans-Joachim Watzke, echoing sporting director Michael Zorc's comments following the 3-1 defeat to Hoffenheim on the final day of the season. "We've already started but there's more to come," he said.

Changes

In an extensive interview with leading BVB fanzine Schwatzgelb.de, Watzke admitted that he personally feels a great deal of responsibility and announced a "return to basics" as he plans wide-ranging changes in the close season.

Watzke's number one priority is a new head coach and reports suggest that former Borussia Mönchengladbach coach Lucien Favre is expected to be appointed in the coming weeks.

But the list of issues at the Westfalenstadion is long and complex, with Watzke highlighting the loss of key players, poor coaching appoinments, a lack of mental strength and unsuccessful transfers among the problems plaguing the club.

"We've lost five world class players in the last two years," said Watzke, naming Mats Hummels, Henrikh Mkhitaryan, Ilkay Gündogan, Ousmane Dembele and Pierre-Emerick Aubameyang. "We could never replace them like for like."

"We've also placed too much emphasis on the footballing quality of the squad and too little on other things. When in doubt, we've always tried to sign technically strong players but perhaps not those with the best mentality or leadership skills."

Fresh expertise

To kick-start the rebuild, Dortmund have already recruited former players Sebastian Kehl (as head of the club's professional division) and Matthias Sammer (as an external advisor).

"Matthias Sammer has proven his quality time and time again," said Watzke of the former Bayern Munich sporting director. "When he started at Bayern in 2012, we were on top. Then Bayern won the Champions League in 2013. Maybe it's just coincidence that he always happened to be where the success was …"

While Sammer's expertise will be restricted to the footballing side of things, Watzke says the appointment of Kehl is intended, among other things, to help restore a sense of identity to the team, which many fans believe is severely lacking.

- Analysis: Borussia Dortmund need to rebuild after scraping back into the Champions League

Finding a balance

In an age of rampant globalization and digitalization, Dortmund also have to find a balance between "Beijing and Borsigplatz," as Watzke once put it – between internationalization and the club's local roots.

"In Dortmund itself, we are often criticized for being too commercial but outside Dortmund people say we're too romantic," he said. "We're criticized when a partner launches a BVB insurance policy but we have to earn money somewhere in order to pay for our 28,600 standing tickets."

Watzke has been an out-spoken advocate of German football's 50+1 rule which prevents outside investors from taking majority control of football clubs. Critics believe this adversely affects the competitiveness of Bundesliga at home and of German clubs abroad, but Watzke insists that the technical superiority of Spanish sides, not the financial might of English clubs, is the model to follow.

- Read more: Bundesliga clubs vote to retain 50+1 rule and VAR

"The tactical performances of Spanish sides are very good, and not just at the top clubs. They're doing top class work," he said. "As for the business model in England, which has seen working class fans forced out of stadia, it may be financially lucrative but that really isn't my thing."

Pointing out that the club's annual turnover has increased more than five-fold in the last 13 years, Watzke is convinced that Dortmund are getting the balance right, adding that he would like to see €15-20m invested in better training infrastructure at the club's Brackel training center.

"There's a lot to do and of course I feel a strong sense of responsibility," he said.

Hans-Joachim Watzke was speaking to Borussia Dortmund fanzine Schwatzgelb.de