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Chris Gagne, an Agile Coach, explains the importance of a working agreement in improving team productivity and happiness. This agreement consists of documented ground rules created by the team. To create a working agreement, brainstorm potential team failures, prioritize the most significant risks, and establish specific rules to prevent them. It is essential to address issues like distractions during meetings and tardiness to stand-ups. The working agreement helps teams identify and address obstacles to their success.