The original, profound observation was that the then-standard model for understanding

heat and radiation, which was producing totally wrong results, can be completely fixed if
one but assumes that energy must come in chunks called "quanta".

Before Planck's observation it was assumed that energy can take on any value. It can be
7 joules, or 7.01 joules, or 7+10−807+10−80 joules. (That last number is 7.00000....0001
with 79 zeros.) In other words, energy was assumed to behave continuously, like points
on a line. Any real number represents a certain feasible amount of energy measured in,
say, joules.
At the time physics was deemed to be almost done. Everything worked, the models were
perfect, Maxwell's electromagnetic theory and Newton's mechanics were beautiful and
correct. There were two nagging experimental results that defied explanation: the
photoelectric effect, where light shining on a material caused electrons to be ripped off
and go free, and the model of "black body radiation", which sought to explain how a
heated body radiates energy.

Those two "nagging" issues turned out to require a complete revolution in our
understanding of the world, eventually bringing forth quantum mechanics.

The model of black body radiation assumed that the internal mechanism of heat
manifests itself in the jittering of molecules or atoms. A mathematical model was set up
to predict how much energy gets produced by such a setup, but the results were totally
unreasonable. The prediction was that more energy is produced at higher frequencies,
meaning that a heated body would radiate more blue than red and more visible light
than radio waves and more X-Rays than visible light. This was in sharp contrast to what
we actually observe.

Planck realized that if we change just one small thing about the model, namely if we
assume that energy comes in packets - you can have one packet, or two, or a million, but
never seven and a half - then the model can be made to produce exactly the observed
frequency distribution of black body radiation. That minimum packet has an amount of
energy called Planck's constant, and this is how it came to be.