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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 and followed by the team. To create an effective working agreement, teams should identify potential pitfalls, prioritize risks, and establish specific rules to prevent them. Examples include limiting distractions during meetings and enforcing punctuality for stand-ups. By addressing potential failure points, teams can enhance collaboration and efficiency.