Observe head of department pocketing father's jotter (7)
I believe the answer is:
notepad
'jotter' is the definition.
(I've seen this before)
'observe head of department pocketing father's' is the wordplay.
'observe' becomes 'note' (synonyms).
'head of' says to take the initial letters.
'pocketing' indicates putting letters inside (pocket can mean to steal or take possession of).
'father' becomes 'pa' (pa can mean dad or father).
The initial letter of 'department' is 'd'.
'note'+'d'='noted'
'noted' placed around 'pa' is 'NOTEPAD'.
(Other definitions for notepad that I've seen before include "Item to write on" , "type of computer" , "Place for recording" , "Pocket-sized computer" , "Jotter; pocket computer" .)