City's hopes of winning a third-successive Premier League title already seem in ruins after falling 14 points behind leaders Liverpool.
Saturday's derby loss to Manchester United was already their fourth defeat of their league campaign, a rude awakening for a side that clocked up 198 points during their back-to-back title successes of 2018 and 2019.
Midfielder Gundogan said: "I think it's normal we are going through this period but the only way out is to stick together and try to come back to what we've done in the past.
"Every single player has to take responsibility to reach his best level again. The sooner we can do that the sooner we'll be successful again. It's a challenge and we have to accept it.
"In general, in life, if you are successful and have won so many things, sometimes you lose focus during that period.
"But the more defeats you have the more you recognise that's not really the way you want to end up and you want to improve again and get to the level you were.
"It's now the challenge to bounce back as quickly as possible."
Gundogan was speaking at a press conference in Croatia ahead of Wednesday's final Champions League Group C game against Dinamo Zagreb.
The pressure is off City at the Maksimir Stadium having already secured their place in the last 16 and top spot in the group.
The challenge will come for City when the knockout stages begin in trying to transpose their domestic dominance of recent years onto the European stage.
"Winning domestic titles doesn't guarantee winning the Champions League," said Gundogan. "The Champions League is a totally different completion compared to the Premier League. It's so tough to get through the group stages and the knockout stages are getting tougher and tougher.
"It's something we target but also something difficult to achieve. We'll try our best and see how far we come this season."
City will need to change both their central defenders from the derby defeat with John Stones ruled out with a hamstring injury and Fernandinho suspended.
Eric Garcia, 18, is poised to start alongside Nicolas Otamendi and 19-year-old Phil Foden will also get an opportunity with David Silva another injury absentee.
Sergio Aguero is still out with a groin problem.