Chu Hsi explains: chung means the full development of one's (originally good) mind and shu means the extension of that mind to others. Chung can be equated with Confucius' saying "Establish one's own character," and shu with "Also establish the character of others." (Analects 6:28)
The mean in practice: "Confucius is affable but dignified, austere but not harsh, polite but completely at ease." (Analects 7:37)