I just thought of this over lunch.
Here's my proposal to fix the NBA draft: have a single-elimination tournament for all of the non-playoff teams. The 13th and 14th best teams get a bye in the first round. Then, seed the "worst of the worst" against the "best of the worst" (i.e., #14 gets a bye and plays the winner of the #11 v. #12 game) appropriately in a single-elimination bracket. The tournament could be held over a week at one venue (like Madison Square Garden) and the players would receive extra compensation on a per-game basis.
The winner of the tournament gets the #1 pick and the runner-up gets the #2 pick. Tie-breakers would be by record, meaning that of the two the semi-final losers, the one with the worse record would get the #3 pick. You just have to apply this tie-breaker to the losers in each round. This format would produce a draft order all the way from 1 through 14. Further, this tie-breaker method rewards the team with the inferior that goes farther in the tournament.
We're talking about 13 games, so there could be 2 games a day for six days and the final on the seventh day of the week-long tournament. Once again, this format would rewarding a team for not tanking by giving #13 and #14 the first day off. (Here's a link: http://www.printyourbrackets.com/pdfbrackets/14teamsingle.pdf)
This would eliminate tanking becuase a team would want to position itself for a good seed in the Draft Tournament. It would also keep fans interested in non-playoff teams and boost revenue for regular season games. The Draft Tournament itself could be a money-maker, and it would provide some of the single-elimination drama of the NCAA tournament (with office pools and everything). The players would get paid for each additional game, thus providing the incentive of additional money as well as the opportunity to improve the team. The "lottery process" would no longer happen outside the view of the public in David Stern's office. It would give the worst teams something to play for at the end of the season. It also has sort of a "Hunger Games"/ "Running Man"/ "Thunderdome" feel to it.
This is the way to fix the NBA draft.
For those of you concerned about whether this would encourage the #8 seed to tank to get into the tournament, I say, "So what?" That's a mediocre team that could use an Anthony Davis or LeBron James or Kevin Durant to shoot to the top, and that would be great for competition in the NBA.