Here's my idea.
- Eliminate the lottery
- All non-playoff teams are placed in a queue
- The first year will be based on the current lottery system (you need some initial condition like this)
- Thereafter, teams either a) move up in the queue or b) make the playoffs
- In the case of a team not making the playoffs they will move up the number of slots equal to the number of teams ahead of them exiting the queue
- When a team reaches the #1 spot, they go to the back of the queue the following season (or hopefully, make the darn playoffs finally)
This should reduce any incentive to tank, because of the time (possibly many years) it would take to reach the number one slot. A really bad team, say Charlotte, will roll through the top 3-4 spots and either — excuse the expression — have to $hit or get off the pot. If they can't figure out how to build a winning core with several years of consecutive top picks, so be it. Most teams will get somewhere close to the top and probably get out of the queue (make the playoffs) within a few seasons.
I think this is a fairly simple, rational plan. Let me know what problems or unintended consequences you see.