Okay so there is a LOT factoring into both the German and Soviet positions at the dawn of the largest land invasion in history, so lets take it from the top by addressing the Soviets situation.

The Red Army in June of 1941 was in a period of a major transition and modernization which was the primary reason for the army being caught flat-footed once Operation Barbarossa commenced. With old equipment being phased out and production of new equipment not reaching the quantities necessary to outfit the entire Red Army at the outbreak of war. The Red Army's chain of command was also in the process of promoting new and inexperienced officers to fill in the holes left by Stalin's purge of the army throughout the late 1930's. With both factors of new equipment shortages and holes in the overall leadership, the Soviet Union was in little condition to fight off a sudden invasion that kept the element of surprise, which can be attributed to Stalin's refusal to accept that in invasion of the Soviet Union was imminent in the weeks prior.

When it comes to equipment, the Soviet need for new infantry equipment, armor, and artillery was laid bare by the Red Army's performance in the Winter War against Finland from November of '39 to March of 1940. It became clear that the old Soviet fleet of T-26 and BT tanks were insufficient and needed to be replaced with a fleet of improved and modernized armor. The KV-1, a Soviet heavy tank that fought in the Winter War, outperformed all other Soviet tank models and was slated for further mass production along with the T-34 which would start production in 1940. By June, 1941, only around 1,000 T-34's and 500 KV-1's were on the field, with the remaining 20,000+ tanks (only around 13,000 of which being combat ready) being the outdated T-26 and BT's, which were wholly inadequate against the German Panzer III's and IV's that made up the bulk of the German armored forces.

Next is the Red Army's leadership deficiencies coupled with the quick buildup of the Red Army's numbers in the leadup to Barbarossa. Stalin's Great Purge of the late 1930's saw the execution of an alarming number of Red Army officers, including most of the Army's Field Marshals. 3 of the Red Army's 5 field marshals were purged, and sources varying on the number of lesser officers purged, ranging from 7-25% of the Red Army's entire officer corps being purged. Couple this was the military buildup and transition the Red Army was going through, increasing from 2.7 million soldiers to 5.5 million, there simply weren't enough trained officers to effectively lead what was over 300 Red Army divisions in 1941, up from 132 divisions in 1939.

Next is Germany's element of surprise when invading the Soviet Union followed by complete failures of communication between Soviet command and Control and the forces on the frontline. Stalin received numerous reports from British intelligence that German divisions were amassing on the German/Soviet border and intelligence suggested that the Germans were preparing for an invasion, but Stalin dismissed these reports. Why he dismissed these reports varies on the source, with the most common one I read was that Stalin reasoned that Hitler would never voluntarily start a 2-front war, especially with a 2-front war being the reason for Germany's defeat in the First World War, and didn't expect an imminent invasion until Britain was brought to peace. When the invasion did start, orders from Stalin became confused or misinterpreted due to the destruction of operational command due to German combined ground and air attacks. Orders became confused, vague, or just plain didn't reach the divisions on the ground in time, or at all.

During the first phases of Operation Barbarossa, orders to the front were rushed and panicked due to the speed of the German advance. Desperate orders for defense or counterattacks were hastily organized and basically were human wave attacks as far as the Germans were concerned.

It would take months and extensive preparations for the Red Army to get back to a sufficient level of command and communication to stop the advance of the Wehrmacht. With the defense of Moscow being well organized and reinforced with fresh divisions from Siberia, enabling the Soviets to counterattack and relieve the city from imminent danger as well as stabilize the frontline. While the frontline was stabilized in January-February 1942, the Red Army now had breathing room to fill the holes in their command structure, kick production of new armor and weapons into high-gear, receive crucial lend-lease aid from the Allied powers to fill holes in their infrastructure and equipment, and rebuild an effective communications network to repel the next major German assault towards Stalingrad and the Caucuses that summer.

For further reading, definitely check out Stumbling Colossus and Colossus Reborn by David Glantz.