Oh, my, I thought that's what we had been doing. Several times.

Rules:
Start with a word. It contains a bunch of letters.
(Some letters might be there more than once. Consider each repetition to be one letter. STREETS has E,E,R,S,S,T,T = seven letters.)
You may a)add one letter, or b)drop one letter, or c)change one letter to another. Only one of those three choices
Then you may, if you like, rearrange all the letters of the new bunch into another word.

The next person starts with that word and applies the rules again.

And so it goes.