The Spanish champions have been struggling for form in recent weeks, and the Netherlands icon feels they would do well to adopt the approach to player recruitment that the Blaugrana have.
"His negative behaviour will always have its consequences. He thinks that his way of coaching is right and he justifies it by past results, but I believe it is wrong," Cruyff told Rac1.
"I am not surprised by what is happening at Madrid. This will always happen when your philosophy is to sign and gamble on big signings.
"Homegrown players have more than just a contract with the club. They take the club to their heart. Transfers can bring in good players, but never for too long. Clubs need their youth system."
The Barca legend also believes that the Catalans will be unaffected by the loss of Tito Vilanova, who underwent surgery to remove a tumour on Thursday.
"The news was a surprise. My first thoughts go to his wife and children. Those are the ones who suffer the most. You have to be with the family," he continued.
"I think he will return in two or three months. You have to think positively in times likes these.
"The team will not be affected. They are united more now and know what they have to do. They are footballers with great experience and they will step up.
"[Assistant coach Jordi] Roura will do fine. He knows the club and we have had him for several years now. Why can we not go well with him? he will take control of one game and then it will be rest.
"From February is when things become more serious. The team has to overcome this difficult period with tranquility."