The three-foot circle originates with Taiichi Ohno, the founder of the Toyota Production System. If an engineer had an idea for improving the production line, Ohno would take the engineer to the production floor. He would then draw a circle a few feet in diameter and make the engineer stand there and watch the process for a few hours. After that, if the engineer still thought the idea was a good one, then they would begin planning to implement it.
We also like this idea as a review technique. Standing and observing is an effective way of seeing if the changes brought about the desired effects, or if more work needs to be done. The observer does not have to be an engineer; it could be the person who originally recommended the changes or another interested member of the company.