We need to start working below threshold and set our dogs up for success.
Pick a time of day that is the least busy but light enough outside to see well. Get some very tasty treats that the dog doesn’t get often (dried wheat biscuits won’t do – use something like boiled chicken..if your vet approves). Sit several feet back from the window. Work with someone whom your dog already knows and likes (maybe a family member). Have that person calmly walk by the window. As soon as the person is in view, give the dog a treat. Do this a few times until you can tell that the dog is looking forward to the person walking by.
Try this with different people that the dog knows. The move on to a well-coached stranger. Start with the stranger walking calmly by the window as you give treats. Stop treats when the stranger is out of site. Once the dog is happy about the stranger, you can raise the criteria. Have the stranger walk by briskly. Later have the stranger run by. Later have the stranger talk and walk. Then try more well coached strangers. Try to get people who look different – older/younger; taller/shorter, different races, etc..
Remember that while you are training your dog to feel better about what’s outside, you must still continue to keep him/her away from the window when you are not training. If your dog has a reaction at the window, you might set back your progress.
Eventually you won’t need controlled setups anymore, but you should still be ready with treats when strangers walk by or other things are happening outside.
Straight counter conditioning and desensitization is just one way to help a dog feel better about what is happening outside.