Step 1: Brainstorm words, concepts, phrases together based on a context-rich picture. Students label their individual copies of the picture as you label yours (on larger paper, smartboard, etc.)
As you can see in this example, this student also went through and boxed all the digraphs and blends she found because we've been working on these patterns in word study. Students also added words in pencil to their lists during their independent writing when there was a new concept. We will be working on "naming" categories with the next go-round. That proved to be the toughest part even though they could explain their connections.