Rewarding your dog for doing 'nothing' is one of the most overlooked behaviors by trainers. Timing is everything.
The idea is, when you see your dog doing absolutely nothing, that is the moment you want to reinforce him with attention and treats. For example: Your dog is standing calmly at your side on a loose leash, and an excitable dog comes out of the blue from around a corner. As your dog sees the other dog, you pop a treat in your dog’s mouth while he is standing there doing absolutely nothing! By doing this you will reinforce your dog for doing nothing in this situation, making it more likely he will do nothing when in a similar situation in the future.
For more information about rewarding your dog for doing 'nothing':