The perfecting of one's self is the fundamental base of all progress and all moral development.
Context
Confucius establishes the proper sequence for creating a better world. We often want to change external circumstances—fix society, improve our workplace, help others—without first addressing the source from which all our actions flow: ourselves.
"The perfecting of one's self" is the "fundamental base." It is the prerequisite. As we cultivate our own character, wisdom, discipline, and compassion, the quality of our actions in the world naturally elevates. You cannot give what you do not have. Lasting external progress and true moral development are simply the outward manifestations of internal refinement.
This quote is a call to personal responsibility. It reminds us that the most effective way to contribute to the world is to commit to our own continuous self-improvement.