Watson was one of the four players to be suspended from the squad ahead of the third Test against India at Mohali for failing to submit performance reviews nine days ago, fuelling rumours of a possible rift between the all-rounder and Clarke.
Former Australian captains Waugh, Mark Taylor and Allan Border wanted the Test skipper to draw intensively on the advice of his deputy in assembling the 2011 Argus review of national team performance.
"They will have to work and fix it up. To Michael and Mickey's credit they have said this is the way we want to do things, if you want to play for Australia you have to fall in line," said Waugh who won 41 of 57 matches as skipper during his 168-Test career.
"At the same time they have to be flexible, got to realise a cricket team is made up of different characters. There will always be clashes of personality, it is just how you manage it and get all the people going in the same direction. The skill they have to have is to work together."
"It is not easy to build a culture. When I first got into the side in 1985 we were in a rebuilding phase and whenever that is the case you lose a lot of experience and know how which you almost have to relearn. I guess that is what the captain and senior players' role is.