You don't actually have to do anything to get Next Steps and Next Observations - they are generated automatically by Tapestry. This is just a quick guide to show you where to find them and what they actually are.
When looking at a child's profile card on the (1) Children tab, you can find the links for 'Next Steps' and 'Next Obs' by clicking on a (2) child's name. You will then find (3) 'Next Steps' and 'Next Obs' in the drop down list.
Clicking on 'Next Steps' will take you to the page shown below.
This will show you where you have made assessments for a child and make suggestions at opportunities you might consider providing to enable you to progress the child from the current point of assessment to the next age band.
Clicking on 'Next Obs' will take you to a similar looking page (below) but will show you where you haven't recorded any assessments for a child and offer suggestions for what to look for, to help you make more assessments.
In order to make these visible to parents you will need to go to your control panel > settings > relatives, then tick the box that says "Display next obs and next steps to relatives".