The La Liga side lost 2-0 to the Italian outfit in the first leg of their last-16 tie in the San Siro on Wednesday evening.
Barcelona have won the Champions League three times in the past seven seasons, but Xavi says that it would not be a failure if Blaugrana exit the competition at the last-16 stage.
"I don't like the word failure at all," he told AS. "It wouldn't be a failure; if you try you are never a failure. It would be disappointing, yes, but failure is not the right word.
"A 2-0 defeat is one of the worst results you can return home with, but we will give it a try. Yesterday we really struggled. We'll have to open up the pitch and create space and take shots from outside the area and be careful of the counter- attack.
"Milan played the perfect match. We weren't at the races and they worked very well. This is what European football is like. We're going to try and turn it around at home whilst knowing it'll be very difficult."
The second leg will take place at the Camp Nou on March 12.