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Chris Gagne, an Agile Coach, discusses the importance of a working agreement in improving team productivity and happiness. The working agreement is a set of ground rules created by the team to address issues that slow them down, such as distractions during meetings or tardiness. To create a working agreement, teams should brainstorm potential failure points, prioritize the top risks, and establish specific rules to prevent them from happening. This approach helps teams proactively address challenges and work more effectively together.