The idea of Observational Method was first discussed by Peck in the Rankine Lecture in 1969. The Observational Method is commonly adopted in geotechnical works in construction phase, though it is also feasible in design stage.
In essence, in the conforming design by engineers during planning stage, the design is usually based on over-conservative approach or most unfavourable conditions owing to a lack of precise and actual site information. During subsequent construction, with precise site information and condition available the Observational Method is adopted in which the original design is revised based on most probable conditions with instrumentation monitoring. If the monitoring results show that performance of the revised design approaches the limit of acceptable level of risk, then it shall be reverted to planned modification which is based on most unfavourable conditions and hence the level of risk is lowered back to the original design. Otherwise, the revised design shall continue and this results in cost reduction without comprising safety of works.
However, care should be taken in implementing Observational Method when rapid deterioration of the site may occur so that there is insufficient time for carrying out the planned modification. For instance, rapid deterioration can result from development of high pore water pressure in heavy rainfall or burst watermain.
This question is taken from book named – A Self Learning Manual – Mastering Different Fields of Civil Engineering Works (VC-Q-A-Method) by Vincent T. H. CHU.