Climate observations are needed to address a large range of important societal issues including sea level rise, droughts, floods, extreme heat events, food security, and fresh water availability in the coming decades. Past, targeted investments in specific climate questions have resulted in tremendous improvements in issues important to human health, security, and infrastructure. However, the current climate observing system was not planned in a comprehensive, focused manner required to adequately address the full range of climate needs. A potential approach to planning the observing system of the future is presented in this paper. First, this paper proposes that priority be given to the most critical needs as identified within the World Climate Research Program as Grand Challenges. These currently include seven important topics: Melting Ice and Global Consequences; Clouds, Circulation and Climate Sensitivity; Carbon Feedbacks in the Climate System; Understanding and Predicting Weather and Climate Extremes; Water for the Food Baskets of the World; Regional Sea-Level Change and Coastal Impacts; and Near-term Climate Prediction. For each Grand Challenge, observations are needed for long-term monitoring, process studies and forecasting capabilities. Second, objective evaluations of proposed observing systems, including satellites, ground-based and in situ observations as well as potentially new, unidentified observational approaches, can quantify the ability to address these climate priorities. And third, investments in effective climate observations will be economically important as they will offer a magnified return on investment that justifies a far greater development of observations to serve society's needs.