Speaking at the club's best and fairest Doig Medal presentation on Saturday night, Lyon was frank in his message to the playing group.
"There is no such thing as in between. You are either in or you are out,'' he said.
"I'm really confident everyone understands that. There will be one or two that probably don't, but we need the majority to continue to understand.
"It's really important to acknowledge what great teams do.
"We certainly had an excellent season, but we haven't achieved excellence yet.''
Fyfe takes out Doig Medal
Lyon, his coaching staff, and the playing group watched the last few minutes of the Grand Final just before they headed on their off-season break.
Captain Matthew Pavlich said it was an important step in progressing as a team and as a club.
"As a group we came together and watched the last three or four minutes of the game and went through a process with Ross and the team about dealing with it and accepting it and talking about adversity and loss and how we all deal with it differently.
"We needed to face it and not shut it out. We need to accept it and at some point move on and I think that's what adversity and great loss is about.
Lyon, his coaching staff, and the playing group watched the last few minutes of the Grand Final just before they headed on their off-season break.
Captain Matthew Pavlich said it was an important step in progressing as a team and as a club.
"As a group we came together and watched the last three or four minutes of the game and went through a process with Ross and the team about dealing with it and accepting it and talking about adversity and loss and how we all deal with it differently.
"We needed to face it and not shut it out. We need to accept it and at some point move on and I think that's what adversity and great loss is about.
"We all experience it in our life and while football isn't life or death, to all the players that last game in September is the most important thing in our career and our football life.
"To get that far and not actually achieve it - it hurts, it burns inside of you.
"I'm sure if we learn from those experiences and learn from the week and learn from the two hours out there we will be better for it."
Fremantle president Steve Harris echoed the thoughts of his captain and coach.
"We are not satisfied to have played in the Grand Final.
"The optimism and success from 2013 does not carry forward. It does not predict future success.
"Make no mistake, we want to win the Grand Final and that burns in my heart stronger than ever before.
"I want it to burn in the heart of every single person in the club and every person who supports this club."
