Heritability is as how strongly inherited genes influence the final way a dog appears and behaves...and, conversely, how strongly nutrition and other environmental factors influence those traits.
Malcolm B Willis in his book "Genetics for Dog Breeders" suggests the following guide for defining the heritability of certain traits and the percentage that is influenced by genetics/outside factors:
Fertility 10 - 15% heritability
Litter size 10 - 20% heritability
Body length 40% heritability
Chest Depth 50% heritability
Hock Height 50% heritability
Wither Height 40-60% heritability
Nervousness 50% heritability
Temperament 30-50% heritability
For breeders, the best method for selection is setting minimum standards for each trait that is considered important...for example: bite, size, focus, and temperament.
You want avoid setting your standards too high during the selection process, otherwise some very good genes may be excluded from the breeding pool over something as minor as coat color. Just because a dog has very little to criticize does not mean that dog is better than the one who excels in other areas. The best choice may be the dog who is above average in the traits which the breed needs to improve...even if that same dog has some minor flaws in other areas. Always avoid breeding two dogs that share the same weaknesses.