Gary O'Neil was eventually relieved of his duties and a raft of changes - including appointing Vitor Pereira and making additions in January - saw Wolves survive comfortably.
Although Wolves are prepared to improve the team this summer, Shi believes the issues last season were more to do with chaos behind the scenes rather than the quality of the players.
"We did a lot of review about last season and actually we have a good team," Shi said via the Business of Sport podcast.
"Even when Gary was the coach, we had an OK team and not so bad to drop into the bottom three for so long.
"At that time, I felt the team lost the leadership. We didn't have the clear communication in the dressing room and we lost a little bit of discipline.
"When you don't have the leaders, eventually the team loses motivation and discipline.
"After Vitor came, the first thing we worked on was rebuilding the team. We had a new captain, a new coaching team and we spoke with all the players to understand what they want and if some players weren't happy, maybe they had to go.
"January was almost perfect for us. We let some players go, signed some new players and built a new team.
"The squad was good enough but we did something wrong off the pitch.
"With Gary, maybe we cut ties too late, the team had lost form and the mentality.
"Normally we cut ties too late and we should do it earlier.
"When you work with a coach you start to build an emotional attachment to him, you talk to him every morning and every night and when you decide to do something with him you feel emotionally weak in your heart and you should do something more decisively."
Wolves are now working on finding the right balance within the squad, which involves moving on some fringe players as well as bringing additions in.
Pereira has a big role in which players come in and Shi says the 'chemistry' with the head coach is essential.
"Normally the manager will tell us the positions he wants to sign, the profile, and maybe he will give us two or three names that he knows well," he added.
"But we will check all the names and finally propose all the names for every position to the head coach. He will then say yes or no.
"Both parties have veto rights and only if both say yes is when we will go forward. It's a mutual conversation.
"If we have the chemistry, he knows me and I know him, and we know if a player can't go through.
"We try to respect the coach's view and try to help him, but he also understands the philosophy of the club, the financials and the balance in the group.
"Veto is maybe too strong a word, it's about a common understanding, but not every coach does this.
"Some coaches don't even try to have the chemistry with me and it's tough. If we can't have that, the coach can't stay longer.
"We once had a coach who said 'you have to sign someone or I have to leave', eventually we compromised and signed that player but eventually he left.
"If any coach wants to work at a club for more than two or three years, it's necessary that the owner, manager and leadership team have a chemistry and common understanding about what the club wants to do, the identity, the limitations and also the ambition. It's so important."