Smith says team need to tighten up if they are going to stand a chance of winning title.
Having rediscovered their attacking magic, next on the agenda for the Chiefs is tightening up a defensive line which assistant coach Wayne Smith says was breached too often and too easily by the Sharks.
In what was a thrilling match at Waikato Stadium on Saturday, won 37-29 by the Chiefs, Smith's men scored four tries - three in the first 20 minutes - but the Sharks scored four of their own.
Smith said he could see parallels to last year, when the Chiefs started to get away from their defence-first mentality only to stumble against the Reds in Brisbane where they also leaked four tries.
This bonus point victory snapped a two-match losing streak but in the end it was a little too close for comfort.
"We've got highly talented players with real optimism," said Smith.
"Sometimes it's our nemesis, because if you play like that on attack it can loosen up your whole game. Sometimes it carries over to defence once the game loosens up.
"It was exactly the same issue last year. We went from being a tight, structured, hugely defensive, physical, team to giving away four tries to the Reds and being a bit loose.
"We need to really refocus and understand if we're going to win this title we're going to win it on the back of defence and that understanding is critical for us."
Having started slowly in their defeats to the Reds and Waratahs - the Chiefs failed to score a first-half point in Sydney - the home side appeared to put the game out of the Sharks' reach in the first quarter, only to ease up.
"It can become your worst enemy. It was a bit like touch rugby, some of our tries, and you can subconsciously slacken off a wee bit. We just loosened up.
"It started with a couple of really poor penalties which were totally avoidable and they kicked into the corner and got tries from drives. All of a sudden they are back in the match.
"We started how we wanted to start but lost a bit of composure once they got back in the game and turned it into a bit of an arm wrestle in the end."
Apart from the five competition points, one positive for Smith was the performance of centre Tim Nanai-Williams - and his honesty afterwards.
"What people don't see often is his work in the dark places and the contesting of rucks.
"He's not quite as prevalent as Rene Ranger in that area, but he's close to it and they're probably the two best in the country.
"He did fall off some tackles which I thought blighted his performance ... a measure of him was that he was pretty down in the changing room after having a man of the match performance. All he could remember were the tackles he fell off."
The Chiefs' next opponents are the Rebels in Melbourne on Friday. Midfielder Richard Kahui was a late withdrawal from the Sharks match because of more hamstring trouble. He will be assessed today.