"We've got one team in Real playing out if their skin, great football, great results, and one team in Liverpool lacking confidence," said Kennedy.
"It starts at the back. It's about not giving the ball away and preventing goals. It's unfair to blame individuals - everybody defends and everybody attacks.
"If we don't allow Real Madrid to play we could get something from the game. I'd be happy with 0-0, but one lapse of concentration and Real will take advantage of it.
"We need to make things happen. If we can get a point it puts pressure on the other two clubs in the group. Experience counts for a lot but, with the exception of Stevie, we haven't got that much Champions League experience, and that includes the manager.
"Liverpool had good intentions in the first game, played well for 30 minutes. But great teams create great chances and Ronaldo's goal was fantastic, his finish was sublime.
"Real were very good on the day, they could have easily got a fourth goal, but when you face a team in top, top form like that they are difficult to break down. Real Madrid look like they can beat anyone in the world at the moment.
"We're looking for goalscorers. We've got Rickie Lambert and Mario Balotelli. They could be great together but we've not seen much at the moment.
"I'd like to see Liverpool come out in a positive frame of mind tonight. Many times over the years we've had to roll our sleeves up and give that little bit extra. The mindset was always not to get beat, stop the opponent's great players and hopefully steal something from the game."