Structured observational research involves monitoring of healthcare domains by experts to collect data on errors, adverse events, near misses, team performance, and organisational culture. This paper describes some of the results of structured observational studies carried out in health care. It evaluates the strengths, weaknesses, and future challenges facing observational researchers by drawing lessons from the human factors and neonatal arterial switch operation (ASO) study in which two human factors specialists observed paediatric cardiac surgical procedures in 16 UK centres. Lessons learned from the ASO study are germane to other research teams embarking on studies that involve observational data collection. Future research needs robust observer training, clear measurable criteria to assess each researcher's domain knowledge, and observational competence. Measures of inter-rater reliability are needed where two or more observers participate in data collection. While it is important to understand the factors that lead to error and excellence among healthcare teams, it is also necessary to understand the characteristics of a good observer and the key types of error that can occur during structured observational studies like the human factors and ASO project.