First you get a length of rope to make a lei from the boxes here:



Then the villager will lay the rope out across the flat rock near the shoreline.



You'll need to make sure you've figured out how to make cloth before doing this one.
If you have, then you'll need to put an adult villager on the piece of laid out rope (lei in the making) once or twice until the rope is repaired. They'll use a bolt of cloth or two to repair it.
Once it is repaired, you need to watch for hummingbirds:


Follow the hummingbird to a flower quickly with an adult villager and grab the flower it is floating above once it says "the flower is in full bloom"

The villager will take the flower back to the lei and attach it.
Do this 6 times until you have 6 flowers on the lei and the villager will take the lei to the tree:

The first lei on the tree:


You'll do this 3 times each, ending up with 3 leis across the tree, helping the tree to heal